‘Crisis’ talks will replace economic gatheringsKorea will reactivate economic crisis management meetings starting next week as the nation’s economy faces growing external uncertainties stemming from the euro zone debt problems, the top economic policy maker said yesterday. It was not clear, however, that the change amounts to more than a change in nomenclature for the planning and monitoring sessions.
The meetings will replace the existing weekly economic policy coordination meetings, which have been held for months to coordinate ministries’ economic measures, Finance Minister Bahk Jae-wan told policy makers during the meeting.
The move came after President Lee Myung-bak decided on Monday to revive the emergency economic meetings that he had presided over to lead Korea out of the 2008 global financial crisis.
“In line with the decision by the president to turn to emergency mode, we will also turn the economic policy coordination meetings into the crisis management meetings from next week,” Bahk said.
This would be the first time in 10 months that the government would hold such an emergency meeting. Korea changed the crisis management meeting into a gathering that focused on economic policy coordination on Dec. 22 last year as the economic situation stabilized.
But as the recent euro zone debt problems and the stagnating recoveries in advanced nations raise concern over a double-dip recession, Korea’s financial markets are on a roller coaster ride, reminding many of the 2008 financial crisis.
“There is a tendency that negative indicators are received just as they are, but positive ones are called into question,” Bahk said. “We are worried that groundless rumors might also make things worse by amplifying the so-called Korea discount phenomenon.” He was referring to alarm about the widening spread in the costs to holders of Korean debt to ensure against default.
Bahk noted that the global credit appraisers he met during his visit to Washington last week told him of their trust in Korea’s economic fundamentals, saying that they were stronger than any other country’s.
Later yesterday, Bahk met with private sector financial and economic experts at a lunch in central Seoul to discuss the latest market situation.
During the meeting, he said that the government was well prepared for any upcoming difficulties because it has enhanced its crisis management capacity significantly after the crises of 1997 and 2008.
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