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Japan ready to cooperate in crisis summit

U.S. and European leaders on Saturday proposed a series of world summits on the global financial crisis, with President George W. Bush to host the first gathering after the Nov. 4 presidential election.

"The prime minister acknowledges that the situation in the world is serious. Japan, as Group of Eight chair, needs to take leadership," Nakagawa told a public broadcaster NHK.

"If a summit were to be held, it should come up with a strong action plan or a decision that follows up on the Group of Seven and Group of 20 meetings. I think the prime minister is making preparations based on this understanding," he said.

A credit crisis that swept around the globe has pummelled markets, leaving the United States and its European allies scrambling for ways to cushion the blow to financial systems.

Bush, French President Nicolas Sarkozy and European Commission President Jose Manuel Barroso at a meeting at the Camp David presidential retreat agreed to "reach out" to other world leaders next week about a series of summits on challenges facing the global economy.

Bush said he had discussed the summit with Japanese Prime Minister Taro Aso and that both developed and developing nations would be represented at the meeting.

Japan has repeatedly said that any crisis summit should be held on condition that measures concrete enough to stem the crisis can be agreed upon.

Nakagawa told a separate television programme that Japan would not rule out issuing deficit-covering bonds to finance a series of government measures to cushion the damage from the financial crisis.

The government plans to map out a second budget package, which would follow one already compiled to help ease the pain from high oil prices, in the week starting Oct. 27 as the nation's economy teeters on the brink of recession.

Issuing deficit-covering bonds would signal a retreat of Tokyo's goal of getting the primary balance -- the budget balance excluding debt servicing and issuance -- into the black in the 2011/2012 fiscal year to rein in Japan's huge public debt, which is running at roughly 1-¢times gross domestic product.

Japan defines a recession as a downturn in the economic cycle, instead of the more widely used definition of two straight quarters of economic contraction.