Gov't may need to spend more to support smaller firms: Nikai

TOKYO, Sept. 25 Kyodo - The government may need to spend more to enhance its new credit guarantee and lending programs to smaller firms in the wake of a serious financial crisis in
the United States, industry minister Toshihiro Nikai said Thursday.
Nikai, who was reappointed Wednesday as economy, trade and industry minister,
was referring to the government's envisioned emergency economic package worth
about 11.7 trillion yen, of which about 9 trillion yen would back loans to
small and midsize companies.
''We have to be careful about the impact of the crisis,'' Nikai said at a news
conference. ''It is necessary to see whether 9 trillion yen is enough.''
Nikai stressed that the 9-trillion-yen guarantee program was designed prior to
an ''unprecedented'' financial crisis in the United States, triggered by Lehman
Brothers Holdings Inc. filing for bankruptcy earlier this month.
He said the government may need to increase the amount as it is possible that
smaller firms will find it even more difficult to manage their cash flows
before the end of this year.
Given Japan's close economic ties with the United States, Nikai said the
domestic economy would not be immune from the crisis.
But he added that fiscal discipline is also important for the country.
New Prime Minister Taro Aso is seen as less committed to fiscal discipline,
putting a strong emphasis on revitalizing the regional economy with bigger
spending if necessary.
In order to implement the economic package, unveiled in late August, the
government still needs to enact a 1.81-trillion-yen supplementary budget for
the current fiscal year.
Aso's governing Liberal Democratic Party has been calling on opposition
parties, which control the House of Councillors, to approve the extra budget.
==Kyodo