Analysis: Broad Japan coalition possible post-disaster

By Linda Sieg

(Reuters) – Japan’s two biggest parties look as though they might put aside bitter rivalry and join hands to recover from the devastation left by last month’s massive earthquake and tsunami, which triggered a nuclear crisis that is still far from under control.

But partisan bickering could still stand in the way of a “grand coalition” and therefore delay agreement on funding for Japan’s biggest reconstruction project since World War Two.

Public opinion appears strongly in favor of a political truce to get through the crisis.

Two-thirds of voters surveyed over the weekend by the mass circulation Yomiuri newspaper said they favored a coalition between Prime Minister Naoto Kan’s Democratic Party of Japan (DPJ) and its rival conservative Liberal Democratic Party (LDP), ousted in 2009 when the DPJ swept to power.

There is still plenty of mistrust to overcome. Just before the quake and tsunami struck on March 11, the LDP was leading a charge to force an early election by blocking key budget bills in parliament, a problem yet to be resolved.

But in a sign that views might be softening, LDP leader Sadakazu Tanigaki was quoted by Kyodo news agency on Monday as saying he would decide as early this week on the matter.

Last month, he rejected overtures to join Kan’s government.

“I am still undecided. I will decide after looking at all the aspects,” he was quoted as saying.

One temptation for the LDP would be the chance to have an influential role in the huge public works projects for the country’s ravaged northeast, where the quake and tsunami left more than 28,000 dead or missing and forced over 160,000 from their homes.

“It is an unprecedented catastrophe and what the people want now is speedy politics,” Kenji Kosaka, an LDP heavyweight in parliament’s upper house, was quoted as saying at the weekend.

Despite a huge majority in parliament’s lower house, the ruling Democrats need opposition support to enact laws in the upper chamber, including legislation to issue deficit financing bonds to help pay not only for a $1 trillion yen budget for the year from April 1 but also for reconstruction of the country’s quake and tsunami-devastated northeast.

Economists say the government could spend as much as $250 billion in emergency budgets.

That makes joining the government increasingly attractive for the LDP, which ruled the country for more than 50 years almost non-stop until being ousted in 2009.

“Some old-timers are tempted by returning to power and getting a share of the cake. They want their name attached to public work projects,” said Koichi Nakano, a political science professor at Sophia University in Tokyo.

NATIONAL UNITY?

The DPJ is still signaling interest in a partnership. DPJ Secretary General Katsuya Okada asked for the LDP’s backing for a law to increase the number of cabinet ministers, a step that would make it easier to accommodate the opposition.

“Since there was the huge disaster … and the nuclear accident, we must respond with national unity, and it is entirely possible that we would have a party with experience join in,” Okada told a news conference.

“But these are discussions involving another party and unless the other party thinks it is desirable, this will not move forward, so personally I think it will take a bit of time.”

Analysts said moves toward a coalition could gather momentum after nationwide local elections set for April 10 and April 24 in which the Democrats are expected to fair badly.

Some forecast that the LDP would insist that Kan step down first while others expect that the opposition party could agree to join the government without a change at the top for now.

“At the start, Kan would stay on because it is a crisis, but after a while they would try to ditch him. Many in the DPJ don’t want to stick with Kan, but now is not the time to change leaders,” said political analyst Atsuo Ito.

Support for Kan’s government rose to 31 percent in the Yomiuri poll from 24 percent in a March survey, but 69 percent believe the premier is not exercising leadership.

Also in question is whether the two fractious parties would be able to agree on policies including how to fund the reconstruction costs.

The LDP is insisting the Democratic-led government abandon costly campaign promises, although even that would not be enough to pay the reconstruction bill, making some combination of tax increases and bond issuance likely.

“I’m skeptical of a grand coalition being realized in days or even months,” said Sophia University’s Nakano. “It’s possible, but I don’t think it’s the most likely scenario. You can start talking but how to get to a deal is quite difficult because neither the LDP nor the DPJ is united on any matter.”

(Additional reporting by Yoko Nishikawa; Editing by Jonathan Thatcher)

Analysis: Broad Japan coalition possible post-disaster