South Korea’s “March Economic Collapse” Crisis: The Serious Background to the Outbreak of Internal Conflict under the Moon Administration

South Korea’s Moon Jae-in administration is in the midst of a civil war over its “flagship policy.

Feb. February 14 On February 14, Lee Jae-myung, the presidential candidate of the ruling Democratic Party of Korea, announced on his Facebook On February 14, Lee Jae-myung, presidential candidate of the ruling Democratic Party of Korea, announced on his Facebook page that the financial authorities’ decision to end the grace period for interest payments at the end of March was “no different than a death sentence. He wrote, “I will urge you to extend the grace period.

The “interest repayment” means that the Moon administration will The “interest repayment The “interest repayment” refers to the monetary policy launched by the Moon administration in April 2008. In the aftermath of the spread of the new coronavirus, support measures were put into effect for small and medium-sized businesses and individual entrepreneurs. The measures include extending the maturity of loans from financial institutions and postponing the repayment of principal and interest. Kim Hyun, the Tokyo bureau chief of the Korea Financial Daily, explains.

Kim Hyun, chief editor of the Tokyo bureau of the Korea Financial Daily, explains: “South Korea had early on implemented a stricter social distance than Japan’s emergency declaration. Small and medium-sized enterprises and sole proprietors will be hit hard by this. On the other hand, cash transfers, which are equivalent to Japan’s “support money for sustainability” and “cooperation money” for restaurants, are extremely small, amounting to a few hundred thousand yen per year. As an alternative measure, the government has come up with the financial measures mentioned above.

The financial support measures, originally scheduled for six months, have been extended twice and are scheduled to end in March this year. But …… This is the first time I’ve heard of it.

With the re-emergence of the Omicron strain, the projections are doomed. The government wanted to increase vaccination rates, ease social restrictions, and normalize business for small businesses and the self-employed, with the intention of a soft landing when the support measures end in March. The spread of the Omicron stock was a miscalculation,” said Kim.

The Gap Deepens Day by Day

The business conditions of small and medium-sized enterprises are not improving at all. There is a possibility that the ruling government, which is struggling in the upcoming presidential election, will order a further extension of the loan period, but the financial authorities are reluctant to do so. This is because the longer the extension, the more debt the borrowers will have to repay and the greater the risk of default. The rift between Lee and the financial authorities is growing deeper by the day.

“The ruling party’s candidate, Lee, says, ‘If we repay the maturing loans and interest at the end of March, the self-employed will be stuck. Candidate Lee, Feb. 11 In a televised debate on February 11, Lee repeatedly stressed the need to compensate small and medium-sized businesses for their losses. In a televised debate on February 11, candidate Lee repeatedly stressed the need to compensate small and medium-sized businesses for their losses, saying, “What the state should do should not be the responsibility of individuals. If I become president, I will guarantee it immediately.

Meanwhile, Financial Services Commission Chairman Ko Seung-bum has announced that the grace period for self-employed borrowers will end at the end of March. When the Financial Services Commission extended the support last September, it clearly stated that there would be no additional extension.

According to the Financial Services Commission, last year As of November According to the FSC, as of November last year, the outstanding debt to small and medium-sized enterprises and the self-employed was 272 trillion 272 trillion 200 billion won 272.2 trillion won (approx. 27 trillion trillion 200 The amount is said to reach 200 billion won (about 27.2 trillion yen). There is a strong view that if more potential bad loans accumulate, they could threaten the financial system and cause the market itself to collapse.

Still, candidate Lee is pushing for an extension of maturities and deferment of interest payments. The troubles of the monetary authorities are great. The Financial Services Commission is avoiding any specific mention of extending the maturity of the loan until the presidential election in March, and is likely to keep a close eye on the impact of the new Corona on the economy.

At a macroeconomic and financial meeting attended by the Minister of Planning and Finance, the Governor of the Bank of Korea, and the President of the Financial Supervisory Service, it was summarized that “the decision on whether to extend the loan support will be finalized next month. In a meeting with officials of the Financial Services Commission, Chairman Ko also emphasized his original position.

“We will try to take necessary preemptive measures while carefully monitoring risk areas,” Gao said. We must be prepared for future shocks,’ he said, implying that he was worried about the future.

Postponing the problem will not solve anything. Postponing the problem will not solve it. The crisis of South Korea’s “economic collapse” is fast approaching.