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EUCCK blasts gov`t decision to prop up nonviable firms

Posted March. 09, 2001 18:10,   


The European Union Chamber of Commerce in Korea (EUCCK) said Friday that mismanagement and unfair trade practices are still a serious problem in Korea, despite the nation`s drive for greater reform and opening. The EUCCK pointed in particular to the government`s decision to inject ``excessive amounts`` of public funds into nonviable companies. In a news conference at the Shilla Hotel in Seoul to release the 2001 Trade Barrier Report, the EUCCK acknowledged that the Korean government had introduced a number of measures to promote greater reform and openness since the 1997 foreign exchange crisis but said there was still much room for improvement in the methods used to put corporate and financial sector restructuring into practice.

EUCCK Chairman Jacques Beyssade said in a keynote speech that inputting massive amounts of public funds to keep nonviable companies afloat was tantamount to hampering fair competition among companies. Frank Hesske, head of the EU delegation here, noted that foreign direct investment (FDI) in Korea by EU countries was the highest among foreign direct investors here. If the Korean government continues to intervene in the shipbuilding industry, he said, a global oversupply problem will emerge, driving prices down and dealing a great blow to European shipbuilders.

Koo Ja-Ryong bonhong@donga.com