Japan must implement a "substantial fiscal stimulus" to boost domestic demand and achieve sustainable economic growth, Gerard Depayre, deputy director general for external relations of the European Commission, said Tuesday.
The commission is an executive arm of the European Union. "Japan is currently relying entirely on net exports to sustain the growth of its economy," he said. "As one of the world's largest economies, this is not a sustainable situation economically or politically."
Speaking at a news conference following talks here on deregulation Monday with Japanese officials, Depayre said it is vital that Japan stimulate its economy by implementing a "substantial fiscal stimulus" and adopting an "ambitious regulatory reform program."
He would not elaborate on what kinds of fiscal measures should be implemented or their scale, but he said, "What has been done so far has not produced results."
"We can note that the present situation is unsatisfactory," he said. "Particularly if it leads to a situation where the growth will be generated from exports and, therefore, there will be consequently a transfer of the burden of adjustment."