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Koizumi stakes rule on postal bill
 Koizumi says postal privatization is a key part of his reform agenda. YOUR E-MAIL ALERTSTOKYO, Japan (AP) -- The future of Prime Minister Junichiro Koizumi and his ruling party's nearly unbroken grip on postwar power hung in the balance as Japan headed for a showdown on a postal privatization plan that would create a bank to rival the world's largest. The upper house votes Monday afternoon on a package of bills aimed at breaking up Japan Post, a sprawling behemoth with $2.9 trillion in savings and insurance deposits that if privatized would rival U.S.-based Citigroup Inc. Under the proposal, Japan Post would be divided into private companies handling mail delivery, banking and insurance by 2017. Koizumi has said rejection of the package would amount to a no-confidence vote. and the top government spokesman was quoted by Kyodo News agency on Monday as saying the prime minister would dissolve Parliament for nationwide elections if it fails. Weekend newspaper polls indicated the contest was too close to call. "This is the first step toward large-scale administrative reform to fundamentally change the shape of this country," said Hidenao Nakagawa, the ruling Liberal Democratic Party's parliamentary affairs chief, arguing Sunday that the postal system was symbolic of the bloated bureaucracy and government waste that has stymied Japan. The enormous pool of postal funds -- amounting to more than Germany's gross domestic product of $2.7 trillion in 2004 -- have long financed wasteful public works projects, while the network of unionized postal workers has also proved a bastion of party support. Koizumi has argued the money needs to be opened to more efficient investment in order to stimulate the world's second-largest economy, which is only just emerging from a long slowdown. Opponents, including some in his own party, argue that privatization would reduce postal services in rural areas and lead to layoffs among the 400,000 postal system workers. They also say the new bank would drive private financial institutions out of business. Excluding its insurance accounts, Japan Post boasts savings deposits alone of $1.9 trillion in a nation known for high savings rates. The postal system has some 25,000 branches around the country, while Japan's seven nationwide banks combined have only 2,606 branches. The biggest banking company, Citigroup Inc., has assets of $1.48 trillion. As party officials engaged in last-ditch lobbying over the weekend, Nakagawa acknowledged, "the situation is severe. There is a possibility they could be rejected." A rejection could change the face of Japanese politics. "For the first time in the postwar period we will openly go head-to-head in elections and we aim ... to take power. The moment is coming when Japan's democracy will be tested," Katsuya Okada, leader of the largest opposition Democratic Party, said Sunday on a Fuji TV news program. Some predict the LDP could splinter in nationwide elections with members opposing the bills forming a new party, while the Democratic Party would be given a critical opportunity to improve its standing. Shizuka Kamei, a key figure in the ruling party's camp rebelling against the bill, did not rule out the possibility Sunday that such a crisis could force the party out of government for only the second time since World War II. The showdown was stirring memories of an eight-month period between 1993 and 1994 -- the only time in the past 50 years that a non-LDP bloc controlled the government after groups of lawmakers broke with the party. "If we are again forced into the opposition, the Liberal Democratic Party will never return," Kamei said. 
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