South Korea’s Opposition Party to Pass Budget Bill Amid Martial Law Crisis
Background
South Korea’s main opposition party, the Democratic Party, has announced that it will pass the government’s budget bill for 2025 at a plenary session scheduled for later in the day. This decision comes amid a constitutional crisis triggered by President Yoon Suk-yeol’s martial law decree on December 3.
The Budget Bill
The budget bill was initially proposed by the government, which had allocated 677.4 trillion won (US$473 billion) for the 2025 fiscal year. However, the opposition-controlled parliament last month cut 4.1 trillion won from the proposed budget. The government has claimed that this cut will paralyse basic government functions, hinder responses to external challenges, and delay policy measures for small businesses and the vulnerable.
Opposition’s Response
Democratic Party leader Lee Jae-myung has stated that the party will pass the budget bill today, citing the need to resolve the current uneasiness and crisis. Senior Democratic Party lawmaker Park Chan-dae has also emphasized that if the government needs money for “spending for people’s livelihoods, it can be solved later through an extra budget.”
Economic Impact
The decision to pass the budget bill has triggered a reaction in South Korea’s treasury bond market. Three-year treasury bond futures have weakened, with a 0.10-point drop to 106.79. According to fixed-income analyst Kong Dong-rak at Daishin Securities, the market is reacting “somewhat sensitively and emotionally” to comments about an extra budget.
Conclusion
The passage of the budget bill by South Korea’s opposition party has the potential to ease the current uncertainty and crisis. However, the decision also highlights the ongoing tensions between the government and opposition parties over budgetary issues. As the country navigates this constitutional crisis, it remains to be seen how the government will respond to the opposition’s proposal and what the long-term implications will be for South Korea’s economy.
FAQs
Q: Why did President Yoon Suk-yeol declare martial law?
A: President Yoon cited opposition obstructionism over government budgets as one justification for his martial law decree.
Q: What is the significance of the budget cut?
A: The government claims that the budget cut will paralyse basic government functions, hinder responses to external challenges, and delay policy measures for small businesses and the vulnerable.
Q: How has the opposition responded to the government’s concerns?
A: The opposition has proposed passing the budget bill and has suggested that the government can solve any funding issues through an extra budget.
Q: What is the impact on South Korea’s treasury bond market?
A: The passage of the budget bill has triggered a reaction in the treasury bond market, with three-year treasury bond futures weakening by 0.10 points.