Emergency System Activated After Economic Authorities' Impeachment Passed...'Internal and External Chain Meetings'

Series of Meetings Including Police Chief, Foreign Relations Minister, and F4 Held
Full Effort to Block Instability

Speaker Woo Won-shik is announcing the passage of the impeachment motion against President Yoon Seok-yeol at the 4th plenary session of the 419th National Assembly (extraordinary session) held at the National Assembly on the 14th. Photo by Kim Hyun-min

Economic team, including Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok, has entered an emergency response system to minimize the economic shock caused by the impeachment approval of President Yoon Seok-yeol.

According to related ministries on the 14th, from the afternoon when the impeachment motion against President Yoon was approved by the National Assembly, the economic and financial authorities entered an emergency state and showed urgent movements through a series of meetings over the weekend.

The Ministry of Economy and Finance held an executive meeting on the morning of the previous day, one day before the impeachment vote, to assess the economic situation after the approval of the impeachment and to seek countermeasures. It was a session to review response scenarios depending on the approval or rejection of the impeachment motion.

The Ministry plans to respond firmly according to the already prepared contingency plan if an emergency situation arises due to the approval of the impeachment motion. Since the impact of the impeachment may appear on the 16th, the first market opening day after the approval, market monitoring will be strengthened.

To this end, an emergency response system was activated by consecutively presiding over ministerial-level meetings centered on economic ministries over the weekend. On the afternoon of the 15th, an emergency economic ministers' meeting was held under the chairmanship of Deputy Prime Minister Choi, followed by a meeting of foreign relations ministers.

Deputy Prime Minister Choi will then convene and preside over the 'Emergency Macroeconomic and Financial Issues Meeting' (F4 meeting), attended by Lee Chang-yong, Governor of the Bank of Korea, Kim Byung-hwan, Chairman of the Financial Services Commission, and Lee Bok-hyun, Governor of the Financial Supervisory Service, to respond to the approval political situation.

A Ministry of Economy and Finance official said, "We plan to check situations that may arise after entering the impeachment approval political situation and respond quickly and firmly if market instability or abnormal signs appear." Since the declaration and lifting of martial law on the 4th, the economic and financial authorities have held daily F4 meetings to discuss responses to the financial and foreign exchange markets and have issued messages to stabilize the market.

Although the presidential impeachment increases uncertainty due to a government vacuum, it is interpreted as positive for the economy in that the political uncertainty, which had been amplified by concerns over additional martial law, severe internal strife within the ruling party over impeachment, and prolonged confrontation between ruling and opposition parties, has temporarily disappeared with this impeachment approval.

Earlier, the three major international credit rating agencies?S&P, Moody's, and Fitch?also unanimously analyzed that the approval of the impeachment motion would have a more positive impact on the economy and national creditworthiness in terms of resolving uncertainty than its rejection.

However, the approval of this impeachment has increased uncertainty about next year's policy direction. Until the Constitutional Court decides whether to accept the impeachment motion, a presidential acting system will operate for up to 180 days, making a prolonged government vacuum inevitable.

Acting President Han Duck-soo and cabinet members who attended the State Council meeting before the martial law declaration are under investigation as accomplices to rebellion, significantly limiting their room for maneuver, making it impossible to avoid damage to the real economy due to the government vacuum.

During this period, there are concerns that policy responses may be delayed in the short term due to policy changes following the launch of Trump's second term and deepening domestic demand slump.