Prime Minister Junichiro Koizumi's administration, which has just completed a skeleton draft bill to privatize postal services, is trying hard to iron out the remaining differences with the Liberal Democratic Party -- a crucial process that will largely determine the nature and direction of postal privatization. The draft, to be sure, incorporates some of the party's demands, but resistance from the old guard remains strong.

This is a critical time for Mr. Koizumi, who calls postal privatization the "mainstay" of his reform agenda. If he makes further compromises, his vision for public-sector reform will lose more of its luster. He should stand by his declared principles of privatization and, on that basis, reach a final agreement with the LDP. That accomplished, he should proceed to tackle other key issues on the agenda, such as pension reform.

Time is running out for Mr. Koizumi. The skeleton draft, prepared under his strong initiative, must be fleshed out as soon as possible so that privatization legislation can pass the Diet during the current regular session, which is scheduled to end in June. Further delays would call his leadership into question and possibly destabilize the political situation.