Vice Minister of Economy: "Government Support for New Deal Fund Is Not Excessive... Designed According to Market Principles"

The 1st Meeting of the Green New Deal Subcommittee Held

[Image source=Yonhap News]

[Sejong=Asia Economy Reporter Kim Hyunjung] Kim Yongbeom, the 1st Vice Minister of the Ministry of Economy and Finance, responded to criticisms that government support for the New Deal Fund is excessive by stating that it is a "necessary role" and that "the fund is designed according to market principles."

On the 8th, Kim presided over the appointment of the Korean New Deal Advisory Group and held the 1st meeting of the Green New Deal division. In his opening remarks, he explained, "I understand there is a misunderstanding that the policy-type New Deal Fund excessively compensates losses with taxes and that the government designates investment destinations."

He refuted the market controversies surrounding the fund point by point. Regarding the issue of excessive support, he said, "While New Deal projects have significant positive external effects on the national economy, due to their relatively high investment risks and long project durations, there is concern that investments may not reach socially appropriate levels." He emphasized, "Therefore, inducing investment expansion through a certain level of risk burden or tax support is a necessary role of the government. In fact, such policy measures are widely used to support startups and ventures (Smart Korea Fund) and to promote corporate restructuring (Corporate Restructuring Fund)."

He also stressed that the fund is not a government-led investment product that goes against the market, but is designed by considering principles such as risk-return proportionality. Kim stated, "It was created according to the basic structure of financial investment products that differentiate investment tranches reflecting various investor preferences for returns and risks." He added, "Specific investment target selection and investment methods for the New Deal Fund will be autonomously decided by Korea Growth Investment Corporation and private fund managers operating the New Deal Fund, and the government will not intervene."

Meanwhile, the meeting was attended by Vice Minister Kim, the Director General of Long-term Strategy, the Deputy Head of the Practical Support Group, the Climate Change Policy Officer of the Ministry of Environment, the Energy Innovation Policy Officer of the Ministry of Industry, and other government officials, as well as advisory members of the Korean New Deal, exchanging opinions related to the Green New Deal.

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