Japan PM praises French efforts for economic 'rebirth'

PARIS (AFP) - Japanese Prime Minister Shinzo Abe on Monday praised Mr Francois Hollande's efforts to kickstart the euro zone's second economy, after holding trade and security talks with the French leader.

"It can truly be said that President Hollande has fired the shot for the rebirth and dynamisation of the French economy," Mr Abe told reporters at a joint press conference.

The thumbs-up came at a crucial time with Mr Hollande's popularity sinking to a new low on the eve of his second anniversary in power and a fresh dispute between France and the European Union on whether Paris will be able to cut its budget deficit as promised by next year.

The Japanese premier is pursuing a growth policy blitz back home to cement a turnaround in the world's number three economy. It is a mix of big government spending and central bank monetary easing, dubbed "Abenomics", and is designed to drag the economy out of years of deflation and laggard growth.

Mr Abe, who is visiting France as part of a six-nation European tour, also said the two countries will promote cooperation in research and development for fast reactors, a next-generation nuclear technology. The two countries are among the world's top producers of nuclear energy.

Mr Hollande said burgeoning bilateral trade, which hit 15 billion euros (S$26 billion) last year, would further expand once Japan struck a free trade deal with Brussels. "France will give all the backing it can" so that the deal is agreed, he said.

The deal with the EU has hit snags on the thorny issue of tariffs and trade barriers. The EU wants progress on non-tariff barriers in certain Japanese markets, while for Tokyo a key issue is that Brussels dismantle customs duties on Japanese automobiles - a sensitive topic for big car producer and exporter Germany.

Another issue that figured in the talks was heightened tensions between Tokyo and Beijing in a tense territorial dispute over islands in the East China Sea. Relations between the two countries have fallen to their lowest point in years and Japan on Sunday sent a team of senior lawmakers to China on a fence-mending visit. Chinese vessels and aircraft regularly approach disputed East China Sea islands after Japan nationalised some of them in September 2012, inflaming the long-running territorial dispute. In a joint statement. Mr Abe was quoted as saying that Japan wants to be a "proactive contributor to peace" in the region.

Mr Hollande and Mr Abe also discussed the crisis in Ukraine and the violence in parts of the south and the east that has fuelled fears of an all-out civil war.

"The presidential election of May 25 must be held and nothing must hinder it," Mr Hollande said, adding that the aim was to "convince the Russian authorities and especially President (Vladimir) Putin that the only path possible is dialogue and therefore a de-escalation."

Mr Abe said Moscow "continues to fan tensions" and underscored the need for a successful election in Ukraine. "The door remains open for any diplomatic solution," he added.