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(4th LD) Moon unveils 40 tln-won relief package for key industries, job retention

All News 18:08 April 22, 2020

(ATTN: ADDS airlines' response in paras 8-11)
By Lee Chi-dong

SEOUL, April 22 (Yonhap) -- President Moon Jae-in on Wednesday announced a massive relief package worth 40 trillion won (US$32 billion) for South Korea's key industries disrupted by the coronavirus pandemic.

The funds are meant to help them weather the crisis, which Moon characterized as the worst since the 1997 financial meltdown, and to help maintain employment.

Moon also unveiled an additional job protection scheme that involves spending 10 trillion won to cushion the COVID-19 impact on the country's job market.

Hard-hit key industries include aviation, oil refinery, shipping, shipbuilding and car production, the backbone of the country's employment.

President Moon Jae-in speaks during the fifth emergency economic council meeting at Cheong Wa Dae in Seoul on April 22, 2020. (Yonhap)

The president then instructed his economic team to prepare swiftly for the launch of a task force on the Korean-version New Deal revolving around major national infrastructure projects.

"Now is the beginning stage of a crisis," he said, presiding over the fifth and last weekly emergency economic council session on the economic and financial fallout of COVID-19.

He pointed out that core industries are at risk and companies are starting to find it difficult to ride out the predicament with the government's provisional liquidity supply.

In response to the government's relief package for the backbone industries, airlines called on the government to extend fresh loans through local lenders as quickly as possible as they are in "grave condition" due to the severe impact of COVID-19 on the airline sector.

On Tuesday, the Korea Development Bank (KDB) and the Export-Import Bank of Korea (Exim Bank), two major creditor banks of Asiana Airlines Inc., said they will extend a combined 1.7 trillion won in loans to the cash-strapped carrier to help it stay afloat.

The KDB-led creditors are also expected to announce financial support measures for Korean Air Lines Co., the country's biggest flag carrier, within this week.

The two full-service carriers have suspended most flights on international routes as an increasing number of countries have strengthened entry restrictions against incoming passengers amid virus concerns. They are set to report poor earnings results for the January-March quarter.

President Moon Jae-in (C) makes his opening remarks during the fifth emergency economic council meeting at Cheong Wa Dae in Seoul on April 22, 2020. (Yonhap)

The government will increase the size of the emergency finance relief scheme to 135 trillion from the 100 trillion won decided in previous emergency economic council sessions, according to Moon.

He also said the government will play a leading role in creating jobs, adding that half a million will be offered, with many for youths.

Moon said companies here are facing an "employment cold wave" just around the corner.

"Employment shock may come more extensively and for a longer time, which we have not experienced," Moon warned.

The government will make sure to shield those key industries at any cost with "strong determination," he said.

It plans to give 500,000 won each to 930,000 freelancers and other workers who are not covered by the state employment insurance, for three months.

Cheong Wa Dae said Moon is sending a clear signal that the government's goal is to prevent layoffs and keep jobs.

He expressed appreciation for a declaration of a "dismissal-free city" by the southwestern city of Jeonju and expressed hope that it will spread throughout the nation.

It's a very meaningful win-win announcement reflecting the commitment to sharing pain amid the worsening of a regional economy, Moon said on his social messaging account.

"Jobs are the economy and our life," he added.

Starting next week, meanwhile, Finance Minister Hong Nam-ki is scheduled to chair a meeting of top economic policymakers in response to coronavirus damages on Asia's fourth-largest economy.


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