Yoshihiko Noda, former Finance Minister of Japan, was named Prime Minister today. Noda, 54, has as mission to end the nuclear crisis and improve the economic situation of the country after March 11th catastrophe.
Noda replaces Kan Naoto, who kept his promise to resign, which he did more than three months after directing the recovery of the devastated areas in the northeast.
The new Prime Minister inherits a country with the greatest burden in the industrialized world debt, which is more than the double of the GDP, a persistent deflation and the strength of its currency, which hurts exporters. To counter this, Noda favors a tough fiscal discipline that covers the costly reconstruction of the northeast.
Noda said the government “must respond according to the basic lines of the Reconstruction Act,” which seems to indicate that the initial plan to keep the costs of the March 11 is going to be through higher taxes. It is also expected that Prime Minister also applies a progressive increase in VAT, currently at 5 percent to 10 percent to cover rising costs of the Nippon population.