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Japan approves £72bn stimulus package

Expected to create 600,000 jobs.

The Japanese government has approved a stimulus package of 10.3tn yen (£72bn) in an effort to strengthen its economy.

Apart from fall in domestic consumption due to weak currency, the country saw decline in exports due to slowdown in demand from the US, eurozone and China markets in the recent times. With this package, the country will invest in education and social security areas and provide incentives for businesses and rebuild areas devastated by the 2011 earthquake and tsunami.

Some industry analysts think that the package is only a short-term solution to the country’s economic growth and do not address the long-term sustainability of economy.

The Japanese Prime Minister Shinzo Abe said: “Unfortunately, the previous administration failed to work out how to boost growth and expand the economic pie. It is vital that we have an economic strategy that can create jobs and raise incomes to sustain growth.”

Since November 2012, the Japanese yen declined by approximately 12 per cent compared to the US dollar.

Martin Schulz of Fujitsu Research Institute told the BBC: “So far what we have seen is measures to kick-start the economy. But once the stimulus boost is over, the coffers will be empty again and Japan will have no more money to spend.”

Mr Schulz said Japan needed to improve its relations with China to help its exporters' sales in the country, not least because demand from the US and eurozone is likely to remain subdued in the near term.

On the domestic front, Japan needs to ease regulations in key sectors such as construction, healthcare, retail and agriculture to make them more attractive for investors, Schulz added.

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Geoffrey Howe dies, aged 88

Howe was Margaret Thatcher's longest serving Cabinet minister – and the man credited with precipitating her downfall.

The former Conservative chancellor Lord Howe, a key figure in the Thatcher government, has died of a suspected heart attack, his family has said. He was 88.

Geoffrey Howe was the longest-serving member of Margaret Thatcher's Cabinet, playing a key role in both her government and her downfall. Born in Port Talbot in 1926, he began his career as a lawyer, and was first elected to parliament in 1964, but lost his seat just 18 months later.

Returning as MP for Reigate in the Conservative election victory of 1970, he served in the government of Edward Heath, first as Solicitor General for England & Wales, then as a Minister of State for Trade. When Margaret Thatcher became opposition leader in 1975, she named Howe as her shadow chancellor.

He retained this brief when the party returned to government in 1979. In the controversial budget of 1981, he outlined a radical monetarist programme, abandoning then-mainstream economic thinking by attempting to rapidly tackle the deficit at a time of recession and unemployment. Following the 1983 election, he was appointed as foreign secretary, in which post he negotiated the return of Hong Kong to China.

In 1989, Thatcher demoted Howe to the position of leader of the house and deputy prime minister. And on 1 November 1990, following disagreements over Britain's relationship with Europe, he resigned from the Cabinet altogether. 

Twelve days later, in a powerful speech explaining his resignation, he attacked the prime minister's attitude to Brussels, and called on his former colleagues to "consider their own response to the tragic conflict of loyalties with which I have myself wrestled for perhaps too long".

Labour Chancellor Denis Healey once described an attack from Howe as "like being savaged by a dead sheep" - but his resignation speech is widely credited for triggering the process that led to Thatcher's downfall. Nine days later, her premiership was over.

Howe retired from the Commons in 1992, and was made a life peer as Baron Howe of Aberavon. He later said that his resignation speech "was not intended as a challenge, it was intended as a way of summarising the importance of Europe". 

Nonetheless, he added: "I am sure that, without [Thatcher's] resignation, we would not have won the 1992 election... If there had been a Labour government from 1992 onwards, New Labour would never have been born."

Jonn Elledge is the editor of the New Statesman's sister site CityMetric. He is on Twitter, far too much, as @JonnElledge.