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Finance minister reacts negatively to extra budget

All News 16:07 April 29, 2016

SEOUL, April 29 (Yonhap) -- South Korea's finance minister said Friday he is against drawing up a supplementary budget to help address restructuring debt-ridden companies.

"It's not easy to draw up a supplementary budget," Finance Minister Yoo Il-ho told reporters after meeting with Park Jie-won, the floor leader designate of the minor opposition People's Party at the parliament.

He said the government can draw up an extra budget plan if economic conditions worsen or there is massive unemployment, though he said it's difficult to say that economic conditions will get worse due to the need to restructure shipping and shipbuilding companies.

His comments came amid growing calls for troubled local shipyards to implement stronger self-rehabilitation measures.

The Financial Services Commission (FSC), South Korea's top financial regulator, has demanded that the three major local shipbuilders -- Hyundai Heavy Industries Co., Daewoo Shipbuilding & Marine Engineering Co. and Samsung Heavy Industries Co. -- ramp up self-restructuring efforts including massive layoffs and sales of non-core assets.

The shipbuilding industry, once regarded as the backbone of the country's economic growth and job creation, has been reeling from mounting losses caused by an industry-wide slump and increased costs.

The FSC has also urged shipping firms to complete renegotiations with ship owners to lower their charter rates by next month to stay afloat.

Hanjin Shipping Co. and Hyundai Merchant Marine Co. -- the major South Korean shipping companies -- face trouble as they are currently under contract to pay much higher charter fees than the current market rate.


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