Fitschen Says `Cheap Money' Won't Solve Japan's ProblemsNicholas Comfort
Japan’s fiscal stimulus won’t help the country generate sustained economic growth, said Juergen Fitschen, Deutsche Bank AG’s co-chief executive officer.
“Japan is the country that causes me the most concern in Asia at the moment,” Fitschen said in a speech in Berlin today. “The call for ever more cheap money, even if it is tempting, certainly isn’t the solution Japan needs.”
Shinzo Abe, Japan’s prime minister, plans 10.3 trillion yen ($120 billion) in fiscal stimulus to boost employment and stoke growth. That’s a return to a strategy that failed to end the country’s stagnation over the last two decades even as the nation’s debt burden almost tripled and extra stimulus spending totaled 80 trillion yen, according to BNP Paribas.
Japan would also suffer if South Korea became more competitive by gaining access to “cheap” labor as North Korea signals it will open its economy to cooperation, said Fitschen, who spent about three years working in Tokyo for Deutsche Bank.
European countries should also seek to work with Myanmar as that nation also opens its economy, he said in an address to Deutsche Bank clients, employees and German lawmakers including Foreign Minister Guido Westerwelle at the lender’s offices.
Fitschen, who leads Europe’s largest bank by assets with co-CEO Anshu Jain, said he can’t yet make an accurate prediction for developments on markets and in the wider economy this year.
“It may be that the worst is behind us, but it is too early to say that we can expect a hint of normality this year,” he said.