Kan sets two (maybe three) conditions for his resignation

Prime Minister Naoto Kan set two conditions for his resignation to break the political deadlock and help disaster victims, but he is also pushing a third requirement that would likely prolong the impasse.

At a June 19 meeting at the prime minister's office in Tokyo, Kan told leaders of the government and the ruling Democratic Party of Japan that he would bow out after the Diet passes the second supplementary budget and a bill to issue deficit-covering government bonds.

They agreed that a lengthy extension of the current Diet session and cooperation from the opposition Liberal Democratic Party and New Komeito would be needed to implement those measures.

Although policy research council chiefs of DPJ and the two opposition parties are discussing the bond issue, the LDP and New Komeito have refused to deliberate the issue in the Diet unless Kan makes clear when he will resign.

The two opposition parties want the DPJ to scrap programs pledged in its manifesto, including child allowances. But they have expressed a willingness to discuss a possible compromise if they know when Kan will leave office.

However, Kan in the June 19 meeting also said the passage of the so-called feed-in tariff bill to promote renewable energy should be a third condition for his resignation, sources at the meeting said.

The bill, which has been gathering dust since the Cabinet approved it more than three months ago, would require utilities to buy electricity generated by green energy sources at fixed prices.

But businesses and lawmakers close to the electric power industry vehemently oppose the bill. DPJ executives rejected that condition in their meeting with Kan, saying it would heighten opposition to any government plan.

Kan and the executives did not reach an agreement on this point. They are still making final adjustments on when he should resign.

Just before the Lower House voted down a no-confidence motion against Kan's Cabinet on June 2, the prime minister said he would step down after achieving certain results in the recovery efforts.

With Japan facing an unprecedented nuclear crisis and thousands of victims of the March 11 earthquake and tsunami still in need of support, the focus of the political world has recently been on when Kan will resign.

The ongoing deadlock has prompted even Kan's supposed allies to urge him to step down at an early date. The meeting June 19 was the first time Kan and his executives talked in concrete terms about his future.

One of the executives told Kan at the meeting, "We cannot obtain cooperation from the LDP and New Komeito unless you say you will step down after the Diet passes the second supplementary budget and the deficit-covering bond bill."

On the urging of the executives and DPJ Secretary-General Katsuya Okada, Kan accepted the conditions, according to several participants in the meeting.

Kan also did not refer to the compilation of a third supplementary budget containing projects for full-scale recovery efforts, which would have prolonged his reign as prime minister.

The second supplementary budget is regarded as a complement to the first supplementary budget on immediate measures for the disaster-stricken areas. The Kan administration plans to submit the second supplementary budget to the Diet in early July and have it passed by the end of the month.

The impasse over Kan's future has also affected other areas of the government.

Top officials of government ministries and agencies have seldom visited the prime minister's office since he expressed his intention to resign.

"They apparently think that it is meaningless to report to a prime minister who will quit," an aide to Kan said.

One key issue affected is trade, particularly Japan's participation in talks on the Trans-Pacific Partnership (TPP) agreement.

"Discussions on the issue have not progressed at all," said an official of the Ministry of Economy, Trade and Industry.

In addition, some DPJ lawmakers say reforms of the tax and social security systems, including an increase in the consumption tax, should not be decided by a lame-duck prime minister.

Diplomatic negotiations have also been influenced by the bickering in Japan's political sphere.

An official involved in South Korean foreign affairs asked, "When can our president visit Japan?"

South Korean President Lee Myung-bak is scheduled to visit Japan in the second half of this year. But officials of the two countries cannot decide on the date of the trip.

Japan and China were also developing an more amicable atmosphere to resume regular visits between their leaders. But the two countries now cannot determine when to resume such visits.

In a meeting held in Kyoto on June 18, former Foreign Minister Seiji Maehara said if Kan remains at the helm, a political vacuum will develop.

"Can the government advance discussions on the TPP and economic partnership agreements with the European Union and Australia in a situation in which prime minister plans to resign?" Maehara asked. "There is no time for Japan to be inward-looking."