[뉴스분석] From antique prices to the second Lunar avalanche and real estate… After the summit, the party and the government tighten the reins in the economy

Seong Il-jong, chairman of the People’s Power Policy Committee (right), and Yoon Chang-hyeon, special chairman of the virtual asset special committee, are seated at an emergency seminar held on the afternoon of the 23rd at the National Assembly Hall in the National Assembly on the topic of ‘Luna Terra Incident, Causes and Countermeasures’. On the far left is Jeon In-tae, a professor at the Catholic University of Korea, who is a member of the Virtual Assets Special Committee. [사진=연합뉴스]

In the aftermath of COVID-19, ‘high inflation, high interest rates, and high exchange rates’ triggered by Russia’s invasion of Ukraine are threatening people’s livelihoods. The impact of the collapse of the Korean cryptocurrency Luna and Terra USD (UST) on the domestic and foreign financial markets is not significant, and the real estate market is shaking again with the issue of ‘the first new city redevelopment’.

In the face of this complex crisis, the Yun Seok-yeol administration, which concluded the Korea-US summit, is also getting busy. The power of the people and the government are determined to tighten the reins in resolving the economic problem by first preparing an emergency response plan for the Lunar Terra USD (UST) crash.

The ‘Digital Asset Framework Act’ to speed up the Luna-Tera crisis

The People’s Power Policy Committee and the Special Committee on Virtual Assets held a meeting between parties and governments at the National Assembly on the 24th and urgently checked the enactment of the Basic Digital Assets Act and measures to protect investors in the coin market. Relevant ministries such as the Financial Services Commission, Financial Supervisory Service, Fair Trade Commission, and National Police Agency, and eight representatives of domestic cryptocurrency exchanges such as Upbit, Bithumb, and Coinone were also present.

The participants said that the Luna-Tera incident had a big impact on the digital asset market as a whole. The consensus was that it is urgent to create an environment in which investors can trade with confidence.

Vice Chairman Kim So-young of the Financial Services Commission said, “I agree that virtual assets issued overseas are traded in Korea without any regulation and act as a risk factor to market stability. Fears about stability etc. are activating,” he said.

In addition, the ruling party pointed out that the current situation occurred because the previous Moon Jae-in administration had devised measures to protect investors, and announced that it would hold a hearing to protect investors when the National Assembly opens in the second half of the year.

59 trillion additional budget amid concerns over high inflation… The speed of the first new city

According to the National Statistical Office, the consumer price index rose 4.8% in April, the highest rate in 13 and a half years since the 2008 financial crisis. President Yoon Seok-yeol, at the first meeting of senior secretaries after taking office on the 11th, ordered, “The economy is very difficult, and the biggest problem is inflation.”

Coincidentally, on the same day, the party and government discussed the Yun Seok-yeol administration’s first supplementary budget (additional budget). Its main contents include “a lump sum payment of at least 6 million won in loss support to small business owners and self-employed people affected by the corona virus,” which is the largest amount ever of 59.4 trillion won.

Since the increase in liquidity in the market increases inflationary pressure, there are concerns that pursuing price stability while making a large-scale supplementary budget is a ‘policy mismatch’. While acknowledging the possibility of an impact on inflation, the government explained that it is more urgent to support those suffering from COVID-19.

According to the Ministry of Strategy and Finance, Deputy Prime Minister and Minister of Economy and Finance Chu Kyeong-ho presided over the first expanded executive meeting on the 23rd and said, “In the short term, we will put the highest priority on price and livelihood stability, and after the passage of the second supplementary budget by the National Assembly, make preliminary preparations for rapid implementation and price stability. We have to do everything we can to come up with measures to stabilize the livelihood of the people.”

Meanwhile, the ruling party leadership, including Lee Jun-seok, representative of People’s Power, visited Sanbon, Gunpo, Gyeonggi-do on the 24th and said, “We will make every possible effort at the party level so that the 1st new town redevelopment project can be carried out quickly.” We will focus our party power so that it can be passed within the framework.”

The Democratic Party of Korea, which is the majority party in the National Assembly, also said that it would form a ‘1st new city maintenance special committee’ and make efforts to enact a special law. First-phase new towns such as Bundang, Ilsan, Pyeongchon, Sanbon, and Middle East are rapidly aging after 30 years of development. The enactment of a special law for redevelopment and reconstruction was a common promise between the ruling and opposition parties in the last presidential election.

However, discussions on the enactment of a special law are already stimulating local house prices. In response, the market advises that policy uncertainty should be resolved by announcing a clear ‘roadmap’ such as speedy and specific policy implementation.

People’s Power Representative Lee Jun-seok (second from the right) visited an apartment in Gaya Jugong 5 Complex, Gunpo-si, Gyeonggi-do on the morning of the 24th for ‘prompt promotion of the first new city redevelopment project’, and with Seong Il-jong (right) and Gunpo mayor candidate Ha Eun-ho (second left) We listen to the explanations of the residents together. [사진=연합뉴스]