To Stabilize the Economy's Base... Cheong Issues Emergency Measures for Complex Crisis

First Emergency Economic Meeting with 'Economic Central Disaster and Safety Countermeasure Headquarters' Character Led by President Moon Jae-in... Support Measures for Small Business Owners and SMEs

[Asia Economy reporters Ryu Jeong-min, Won Dara, Jang Se-hee] "It is a complex crisis situation." The Blue House's perception surrounding the novel coronavirus infection (COVID-19) is clear. It means that urgent and extraordinary measures are needed to dispel the dark clouds of crisis hanging over the Korean economy.

Han Jeong-woo, the Blue House Chunchoogwan, expressed concern, saying, "Recently, as the COVID-19 situation has worsened into a global pandemic stage, we are facing a complex crisis situation including the expansion of economic interlinkage between the US economy and domestic and foreign economies, as well as the real economy."

On the 19th, the 'Emergency Economic Meeting' is essentially an organization with the character of an economic 'Central Countermeasure Headquarters (Jungdaebon)'. Key economic ministers including Deputy Prime Minister and Minister of Strategy and Finance Hong Nam-ki, Blue House aides such as Chief Secretary Noh Young-min, and others attended. Even Lee Ju-yeol, Governor of the Bank of Korea, joined to seek ways to respond to COVID-19.

[Image source=Yonhap News]

President Moon Jae-in personally chaired the Emergency Economic Meeting and plans to hold meetings weekly if possible. If necessary, it will be operated as a pan-government countermeasure meeting involving economic organizations, labor groups, and private experts. The core agenda on the first day focused on the operation plan of the Emergency Economic Meeting, preparation of a livelihood financial stability package, and financial support measures for small and medium-sized enterprises (SMEs) and small business owners.

In particular, the issues faced by SMEs and small business owners, who have been directly hit by COVID-19, are a detonator shaking the roots of the Korean economy. According to the 'Household Credit (provisional) in Q4 2019' statistics announced by the Bank of Korea on the 25th of last month, the household credit balance at the end of last year was 1,600.1 trillion won, an increase of 27.6 trillion won compared to the end of the previous quarter. Compared to 723.5 trillion won during the global financial crisis in 2008, it has more than doubled. Household credit is a comprehensive household debt that includes loans from financial institutions such as banks and insurance companies as well as prepayment card usage amounts.

Accordingly, the government decided to come up with solutions to resolve the financial difficulties of small business owners and to respond to the issue of increased volatility in the financial market through joint efforts of related ministries.

[Image source=Yonhap News]

Cho Jung-sik, Policy Committee Chairman of the Democratic Party of Korea, said at the policy coordination meeting on the same day, "To prevent the instability of the financial market from spreading to the real sector, comprehensive measures such as liquidity supply, bond market safety funds, corporate bond issuance, and stock market supply-demand stabilization measures must be promoted." He emphasized the need to shorten the screening period for management stabilization fund loans and credit guarantee fund contributions as much as possible and to lower the criteria for financial support.

Lee In-young, floor leader of the Democratic Party, also announced on the same day, "We will establish an Emergency Economic Countermeasure Headquarters within the party's National Crisis Overcoming Committee and speed up efforts in three major areas: finance, financial sector, and self-employed and small business owners." Lee also proposed a '50% donation campaign of lawmakers' salaries.'

Meanwhile, the Blue House and the ruling party sympathize with the purpose of disaster basic income but are examining various aspects such as fiscal soundness. Lee In-young said, "Although the National Assembly approved a supplementary budget of 11.7 trillion won for COVID-19 the other day, it is regrettable that direct support measures were not prepared."

This content was produced with the assistance of AI translation services.