Koizumi calls early polls, dissolves parliament

Japanese Prime Minister Junichiro Koizumi bows to members of the Lower House at a plenary session of the Diet in Tokyo yesterday. Koizumi dissolved the Lower House to pave the way for new elections after his key reform of privatising the postal service was rejected. PHOTO: AFP

"According to the clause seven of the Japanese constitution, the House of Representatives is dissolved," Speaker Yohei Kono told the house, announcing the decision of Koizumi's cabinet.

Koizumi, with a grim expression on his face, bowed several times before the house as several lawmakers cheered him on.

Koizumi had vowed to call a new election after the upper house rejected his key reform of privatising the powerful post office.

The cabinet was due to hold another meeting later Monday to set the date for an election, which must be held within 40 days of the dissolution of the house.

Japan's upper house of Parliament voted down legislation to divide and sell the country's postal service yesterday, prompting Prime Minister Junichiro Koizumi to follow through on a threat to dissolve the lower house of Parliament.

The snap elections that will follow could shake the ruling party's grip on power.

Defections from Koizumi's own Liberal Democratic Party helped down the reform package by a 125-108 vote, dealing a painful setback to the prime minister's longtime quest to privatise the postal savings and insurance businesses and open their massive holdings to private investors.

Koizumi called an emergency Cabinet meeting, and national broadcaster NHK and Kyodo News agency reported that ministers with one dissenting vote decided to dissolve the lower house of Parliament.

Chief Cabinet Secretary Hiroyuki Hosoda, speaking to reporters, refused to discuss the prospect of elections, but media reports said the LDP and its coalition partner, the Komeito Party, had agreed to hold the ballot on Sept. 11. Campaigning for the chamber's 480 seats was to begin Aug. 30.

The dissent over the package revealed deep divisions within the LDP, which has held onto power almost uninterruptedly since its founding in 1955. Reform was expected to be a major issue in the campaign, and some speculated that it could split the LDP into separate camps.

The legislative package would have created the world's largest private bank, but opposition was strong among opposition and LDP lawmakers who said the measure would cut postal services to rural areas and lead to layoffs.