Japan PM, Opposition Leader Clash On Economy

No lower house election need be held until September 2009, but many Japanese are longing for a change.

Struggling Japanese Prime Minister Taro Aso clashed in parliament on Friday with his opposition rival on when to have an election, as the economy suffers from recession and doubts simmer over how long he will last.

The two leaders held their first formal debate on Friday as new industrial output figures pointed to a longer and deeper recession in Japan amid a global financial crisis that has hit Japan's big car makers and other manufacturers.

No lower house election need be held until September 2009, but many Japanese are longing for a change.

A Reuters survey of individual investors showed more than 60 percent wanted the main opposition Democratic Party to win the next general election.

"You had said there was no time for an election because we needed to work on economic steps quickly," Democratic Party leader Ichiro Ozawa said in a one-on-one parliamentary debate with Aso, as his fellow lawmakers shouted encouragement.

"But since you are now submitting an extra budget next year, you should immediately call for an election and leave it to the people to decide ... We have enough time in December to have an election."

Ozawa wants an election in hopes of ousting Aso's ruling conservative Liberal Democratic Party, which has reigned for much of the past five decades, but the economic woes and sagging popularity mean the gaffe-prone Aso is likely to avoid a vote.

An LDP defeat would spell a raft of policy unknowns as the opposition Democrats, a hodgepodge of ex-LDP members, socialists and younger conservatives, take their first shot at governing.

NO TIME FOR VACUUM

Aso said Japan, the world's second-largest economy, could not afford an election in the midst of the financial crisis.

"The world is at a stage where a harsh storm seen only once in 100 years is raging. As everyone in the world is making desperate efforts to tackle the situation, there is no time for political vacuum," he said.

But former financial services minister Yoshimi Watanabe, one of a new group of LDP lawmakers critical of Aso's stance, echoed Ozawa's call for an early poll.

"Mr Aso was chosen as prime minister in hopes that he would hold an election. We should go back to the original idea. In other words, we should have a general election," Watanabe told Reuters in an interview. "After that ... we should form a crisis management cabinet."

Aso has said that the extra budget to fund a promised 5 trillion yen ($52.5 billion) stimulus package will not be submitted to parliament until early next year.

Ozawa repeatedly criticised the delay, saying the prime minister has betrayed the public by not keeping a promise to put the economy before domestic politics.

Aso, an outspoken nationalist known for his love of manga comics, has seen his popularity slide since he took office in September as he struggles with a divided parliament where the opposition controls the upper house and can delay laws.

A string of verbal gaffes and dissatisfaction with the extra budget delay has stoked criticism inside his party.

If Aso were to resign, he would become the third Japanese prime minister to quit in less than two years, another casualty of a fractured political system that is stymieing policy decisions.

"Aso's public support is rapidly dwindling and that means his own party won't listen to him," said independent political commentator Minoru Morita said. "He can't call a snap election and is losing clout. His resignation is just a matter of time."

Others, though, think a lack of viable alternatives inside the LDP could help Aso keep his job until the general election.

Pundits say the LDP-led ruling bloc is in danger of losing the poll, ending a stretch of nearly uninterrupted power since the pro-business party was created in 1955.

Still, Ozawa, a former LDP heavyweight with an image as an old-fashioned politician with an autocratic management style, rates even lower than Aso among voters.