Japan eyes political shakeup after Ozawa forms new party
TOKYO (Reuters) - Japanese political veteran Ichiro Ozawa and dozens of other lawmakers who quit the ruling party over a tax hike plan launched a new party on Wednesday in a bid to challenge the government, possibly heralding an era of political shakeup.
The exit of the 70-year old Ozawa, whose clout is waning after four decades of political wheeling and dealing, will make it easier for Prime Minister Yoshihiko Noda to control his Democratic Party of Japan (DPJ) and forge coherent policies.
But Noda, who depends on support from opposition parties to pass laws in a split parliament, becomes more vulnerable to an early election if further defections shrink his party's already slim majority.
The next lower house election must be held by September 2013 and the possible proliferation of smaller parties will also make coalition politics a necessity.
"Ozawa's departure is a plus for Noda in terms of his policy management because it removes sources of friction and makes it easy to cooperate with main opposition parties," said Atsuo Ito, an independent political analyst who has worked for both the Democrats and rival Liberal Democratic Party (LDP).
"But in terms of numbers, Noda's government is weakening."
Opinion polls suggest no single party will win a majority in the next election, underlining voters' disgust at the inability of mainstream parties to tackle persistent problems such social and economic effects of a shrinking, ageing population.
"If an election is called, it may spur a political realignment. Neither the Democrats nor the main opposition could win a majority. It would be a matter of who is allying with whom," said a lawmaker close to Noda.
BARELY KEEPING MAJORITY
The defection of Ozawa and his followers cuts the DPJ's seats in the lower house to 250, allowing the party to keep its majority by just 11 seats.
Ozawa reiterated opposition to Noda's plan to double the sales tax to 10 percent by October 2015 -- seen as the first step to fix bulging public debt -- while vowing to tackle deflation, post-quake reconstruction and administrative reform.
Seeking to capitalize on public distrust of nuclear power, Ozawa said his party aims to wean Japan from its dependence on nuclear power, which accounted for about 30 percent of Japan's power needs before last year's Fukushima disaster.
"About 10 percent of the world's nuclear power stations are located in this small land of ours," Ozawa told the inauguration ceremony of his new party, named 'People's Livelihoods First'.
"We regard nuclear power as transitional energy, and will strive to develop new energy sources that would replace atomic power, and clearly take the path of exiting nuclear power."
But Ozawa and his party are seen as less of a threat to the status quo than another new party led by populist Osaka mayor Toru Hashimoto.
"The next election is not about the DPJ versus the opposition but existing parties versus third forces such as one led by Hashimoto. No one wants to play with Ozawa," said political commentator Harumi Arima.
This is Ozawa's fourth political party since 1993, when he broke ranks with the LDP.
He then devoted the last two decades to creating, and then breaking up, alternative parties to the LDP, earning him the nickname "Destroyer". Ozawa's influence has faded lately, partly due to voter distaste for his old-style politics.
(Additional reporting by Kiyoshi Takenaka Editing by Linda Sieg, Miral Fahmy and Ed Lane)
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