Japan’s effort to fight deflation and spur growth will be a topic at next week’s Group of Eight summit as leaders debate divergent policies in the world’s biggest economies, a German government official said.
German Chancellor Angela Merkel and Japanese Prime Minister Shinzo Abe plan to meet privately on June 17 during the conference at Lough Erne in Northern Ireland, according to the official, who briefed reporters in Berlin on condition of anonymity today because G-8 preparatory talks are private.
Economic-policy aides to the heads of the eight leading economies are debating the differing approaches in monetary policy among the G-8 nations and it’s too early to tell to what extent the leaders will discuss the matter during the June 17-18 meeting in the U.K., the official said.
Merkel is leading euro-area calls for debt reduction and has expressed concern about monetary easing in Japan, where Abe’s economic program, dubbed Abenomics, includes $102 billion in stimulus spending in a bid to end two decades of stagnation. The Bank of Japan said April 4 it will purchase 7.5 trillion yen ($80 billion) of bonds a month to double the country’s monetary base by the end of 2014.
Japan’s approach under Abe, who took office in December, differs from what’s traditional in Germany, the official said. Germany will have to make it clear that the European Central Bank is committed to monetary stability and is independent, he said.
The G-8 comprises Canada, France, Germany, Italy, Japan Russia, the U.K. and the U.S.