[Title] Press Conference by Prime Minister Shinzo Abe Following His Attendance at the G8 Summit Meeting in Loch Erne

1. Opening Statement

PRIME MINISTER SHINZO ABE: This was my first time to attend a G8 Summit in six years. Summits are opportunities for the leaders of various countries to have frank and spirited exchanges of ideas. I attended this Loch Erne Summit with two particular aims in mind.

First, I wanted to obtain the understanding and support of the other G8 leaders regarding my economic policies. In light of this, the first goal was to elicit the understanding and approval of the other nations participating in the summit concerning my three "arrows" of economic revival, in particular with regard to the Growth Strategy that I recently formulated. My second aim was in the area of Japan's foreign policy. I sought to state Japan's clear stance based on our national interests with regard to the North Korea nuclear and abduction issues. Having attained both of these goals, I believe that I was able to achieve significant results over the course of the two-day summit.

First, Prime Minister Cameron, who chaired the summit, designated me to explain Japan's economic policies directly during the session on the global economy, which was the most significant topic taken up throughout this meeting. The G8 leaders responded to this with both strong expectations and high acclaim. I believe that this was the first time in recent years that Japan's economic policies received this degree of attention at the summit. The development of Japan's economy will foster the development of the global economy. In this way, Japan and the world will create a win-win relationship. The leaders of the other G8 countries expressed their high expectations with regard to this point.

Next, in the area of foreign policy, I led the discussions on North Korea. I stressed emphatically that a nuclear-armed North Korea cannot be tolerated and that North Korea must fully abide by all relevant UN Security Council resolutions. I furthermore underlined the necessity of resolving the abduction issue. The other G8 leaders expressed their vigorous support on this matter, and the abduction issue is also reflected in the G8 Communiqué. Moreover, the leaders held in-depth discussions on such global issues as the tense state of affairs in Syria and counter-terrorism. I provided a thorough explanation of Japan's views on these matters and described Japan's efforts.

Finally, during both the G8 Summit itself and the bilateral summits held on the sidelines, the other leaders showed such a strong level of interest in my economic policy of three "arrows" that I myself was surprised. I was struck by how intense each country's expectations were for Japan's revival. This was a summit at which I felt strongly that Japan is now trying to come out again on center stage in the world. This is all the more reason why I felt very keenly a responsibility to wrest Japan from deflation, restore a strong economy, and contribute to the growth of the global economy at all costs by bringing these three arrows to a successful outcome in the future. I will end my opening statement here.

2. Questions and Answers

REPORTER (HARA, NHK): Mr. Prime Minister, you stated that the countries of the G8 showed very keen interest in Abenomics. Do you believe that you succeeded in gaining the understanding of the G8 countries? Also, opposition parties have also been expressing their concerns regarding Abenomics, given recent movements in the foreign exchange market and in share prices. In light of the instability found in the movements of share prices and foreign exchange, how do you intend to bring a sense of reassurance to the Japanese people going forward? Furthermore, regarding the Growth Strategy and "Basic Policies 2013," it has been pointed out that there are no concrete measures for cutting back expenditures. I would like you to explain in concrete terms how you intend to reduce expenditures going forward, including a review of spending on social security.

PRIME MINISTER ABE: First of all, in the summit session on the global economy as well as in the bilateral meetings I held, I was asked to provide an explanation of the economic, fiscal, and monetary policies that Japan is now advancing. This made me feel very keenly the intensity of the expectations towards the Japanese economy as well as towards our economic policies and Japan's growth. My explanation garnered not only strong expectations towards my economic policies but also high acclaim for them. Within the discussions, there were even statements welcoming Japan's efforts to promote economic growth. There were also comments that Japan's economic growth is evident compared to its situation a year ago.

As I just stated, there was a great deal of interest shown during both the summit and the bilateral meetings, leaving me with the distinct impression that expectations towards Japan's economic growth are quite strong indeed. I have renewed my determination to extract Japan from deflation and revive the economy at all costs, on the basis of a win-win relationship between Japan and the world.

As for share prices and foreign exchange levels, I consider it inappropriate to make any comments as Prime Minister. What I should say is that the real economy is steadily improving. In contrast to our GDP growth rate of minus 3.6 percent from July to September in 2012, January to March this year yielded a growth rate of positive 4.1 percent. In this way the policies we have been promoting have changed this from a minus to a plus-from a negative to a positive. A look at the figures for April indicates improvements in the figures for both consumption and production. In addition, [in April] the ratio of job offers to job seekers was 0.89, a level not seen since before the Lehman Shock. I believe we can say that we have returned to the situation before the Lehman Shock. Thus the growth rate, production, consumption, and employment are all improving.

I believe that in this summit meeting, I garnered these strong expectations and high evaluations on the assumption that these aspects of the real economy are improving. The key will be for us to execute steadily, confidently, and without wavering these policies we are now promoting. Also, in light of the fact that things are now changing for the better, I would like to explain things to the Japanese public in a careful manner.

With regard to your question concerning future reforms to social security expenses, as we advance our policies going forward, it will be necessary to reconcile revitalization of the economy with putting public finances on a sound footing.

I believe that we succeeded in setting a course forward in the "Basic Policies 2013" approved by the Cabinet last week. For the national and local governments' primary balance, by fiscal 2015 we will slash the deficit ratio to GDP in half compared to the figures for fiscal 2010, and we will achieve a surplus by fiscal 2020. It clearly indicates the goal of putting government finances on a sound footing after that time by reducing in a stable manner the ratio of government debt to GDP.

As for concrete efforts to attain the goal of restoring a sound basis for government finances, before the end of the summer, we will formulate and properly disseminate a Medium-term Fiscal Consolidation Plan.

In the area of expenditures, we must thoroughly stamp out waste. There will be no "sanctuary" areas even within social security. However, we will not simply introduce restraints on spending all at once. For necessary expenditures, we will properly maintain quality. But since wasteful areas do exist, we will place greater emphasis on streamlining services, including through enhancing the use of information and communication technologies within medical services.

We have also conducted a review of the standards for receiving livelihood assistance, an area which until now has not been subject to scrutiny, and we have submitted within the current Diet session a bill which would strengthen measures to counter the fraudulent collection of benefits. I intend for us to undertake prudently in the future those efforts that lead to employment as well as those that facilitate the adjustment of benefits provided in an appropriate manner. I will devote my utmost efforts to carry out my three "arrows," with a view to fostering a virtuous circle of economic revival and increasingly solid public finances.

REPORTER (SMITH, FINANCIAL TIMES): The policy of Abenomics has touched off a weakening of the Japanese yen, and neighboring countries have expressed genuine concern that this will trigger a currency war. During the G8 Summit, did Germany or other countries not express their concerns regarding such foreign exchange rate matters? Is it possible to justify such a weakening of the yen? Also, was there no call for responsible fiscal policy as indispensable? When will such a credible fiscal policy come to be realized? Will it be implemented before [the decision is taken in] October regarding [whether or not to implement] the raising of the consumption tax rate?

PRIME MINISTER ABE: My three "arrows" are nothing more than policies designed to wrest Japan out of deflation and revitalize the economy. They are policies for attaining domestic goals. They do not target the foreign exchange rate. This point is one that Japan has explained clearly at the G7, G20, and other such meetings until now. I believe that we have succeeded in gaining the understanding of other nations on this point.

Through such efforts, the Japanese economy will once again restore its vigor. It is my firm belief that this will without a doubt generate positive impacts for the global economy, thus becoming a win-win situation.

As for restoring the sound footing of Japan's public finances, fiscal reconstruction will be impossible unless we succeed in pulling out of deflation. Casting off deflation and causing the economy to grow robustly will boost tax revenues, and next year we will adjust the consumption tax rate to be consistent with rising social security costs. Raising the consumption tax rate is unavoidable in order to secure government revenue. Of course, insofar as the economy is not a static object, I intend to take a comprehensive decision, giving consideration to the figures for April, May, and June in terms of any major changes or whether or not we managed to pull out of deflation. We will at the same time take further surefooted steps towards fundamentally strengthening the basis of our public finances.

Of course, I also intend to eradicate waste, including in social security expenditures as I stated earlier. By doing so, I am firmly convinced that we will be able to attain the dual goals of putting public finances on a sound footing and revitalizing the economy.

No concerns were raised at the G8 Summit regarding these policies that I am pursuing. I would like to state that clearly. There were comments from some leaders during the discussions regarding monetary easing issues as a general matter. However, I did not interpret anything as being an expression of particular concern regarding Japan's monetary policy.

REPORTER (NAKATA, MAINICHI): Mr. Prime Minister, I would like to ask about your policy on nuclear power. The new safety standards established by the Nuclear Regulation Authority will enter into force in early July and inspections based on applications by the electrical power companies will be launched. At the same time, there remains deeply rooted dissatisfaction on the restarting of nuclear power plants. The restart of nuclear power plants that are recognized as conforming to the new safety standards is also included in the government's Growth Strategy. Mr. Prime Minister, I would like to ask if you consider it appropriate to restart the plants as soon as possible once the conditions [set out in these standards] are fulfilled. I would also like to ask what future directions regarding the export of Japan's nuclear power generation technologies you conveyed to the other leaders at the summit meeting you held with four Eastern European countries in Warsaw [the other day].

PRIME MINISTER ABE: First of all, safety takes the utmost priority when restarting nuclear power plants. The safety of the nuclear power plants will be determined through the expert decision of the Nuclear Regulation Authority. When the Authority finds that a plant is in conformity with the new safety standards, we will move forward on restarting operations, respecting their expert judgment. At that time, we will make the greatest possible efforts to gain the understanding and cooperation of relevant persons within the local government in the area where the nuclear plant is situated and others.

As for what I said to the leaders of the four Eastern European countries, I conveyed my view that it is Japan's responsibility to share with the international community the experiences and lessons learned through the nuclear accident in Fukushima and also to contribute to the enhancement of nuclear safety around the world. The leaders of these four countries expressed their great interest in Japan's advanced technologies not only in the area of nuclear power, but also in the energy field in general. In order to meet those expectations, I intend for Japan to engage in comprehensive cooperation with the countries of Eastern Europe in the field of energy, including energy conservation and renewable energies in addition to nuclear power.

REPORTER (McADAM, BELFAST TELEGRAPH): I would like to hear your impressions upon visiting Northern Ireland for this summit. I also wish to inquire about any impacts that Abenomics will have on relations between Northern Ireland and Japan, particularly impacts in the areas of investment and tourism.

PRIME MINISTER ABE: Although this has been my first time to visit Northern Ireland, I have been very deeply impressed by the extremely warm hospitality accorded to me by the Northern Irish people. I wish I had had the opportunity to visit here sooner. I would also like to offer my sincere congratulations on your seizing the opportunity for new growth as a result of progress in the peace process.

I have been very strongly impressed by Enniskillen and Belfast, by Northern Ireland's natural beauty, and by the hospitality and sense of commitment shown by the Northern Irish people. I also felt that Northern Ireland shares many points in common with Japan and the Japanese people.

I had the opportunity to exchange views with people related to Japanese companies that have expanded into Northern Ireland. Japanese companies have created employment for 2,700 people here and are making use of Japan's advanced technologies to contribute on a daily basis to opening the way to Northern Ireland's future. Japanese companies around the UK have generated employment for roughly 140,000 people, and they are actively engaged in win-win cooperation in the automotive industry and in research and development.

My administration places the highest priority on revitalizing the Japanese economy. By reliably fostering economic growth once more, Japan will be able to contribute greatly to not only the global economy but also the economy and the growth of Northern Ireland. I would like to strengthen Japan-Northern Ireland and Japan-UK relations in an ongoing manner through our advanced technologies and through our cooperation with the local people.

While Japan also has high expectations for inflows of investment from the UK, I also look forward to attracting new and greater investment from Northern Ireland in the near future through the visit of Minister Robinson and Minister McGuiness to Japan.