GNP, "Public to Burden 172 Tril. Won in Public Fund Loss

The Grand National Party (GNP) argued on the 17th that the government intentionally downplayed the public fund loss by 33 trillion won and omitted interests worth 103 trillion won on 69 trillion won in principal.

But the Millennium Democratic Party (MDP) countered GNP`s allegation, saying, "The GNP deliberately distorted or inflated figures." The confrontation between the two rival parties over the evaluation method for the public fund loss and measures to retrieve the public fund is sending a shockwave to the nation.

The GNP issued `Measures to retrieve the public fund and to improve related institutions` on the 17th and argued that loss in the public fund amounted to 102 trillion won with 69 trillion won in principal, 10 trillion won in financing from state-run banks and 23 trillion won in interests paid until this year.

The government announced the loss in public fund estimated by an accounting firm earlier this month. But the government said that interests on public fund was not included in the statistics for the public fund and excluded money invested by state-run banks saying that the government is holding the stake.

Lim Tae-hee, chairman of the second Policymaking Committee in the GNP said, "The government said it will pay back its share in redemption in the period of 25 years. But the government share, which it alleges is 69 trillion won, amounts to as much as 172 trillion won with the interests worth 103 trillion won (based on 7% of annual interest rate)

Regarding redemption, the GNP suggested returning the fund in the period of 15 years by raising 6 trillion won per year by saving 1 to 1.5 trillion won with an austerity budget compilation, 2 trillion won in financial transfer from the Bank of Korea, 1 trillion won collected from the financial sector.

The GNP urged to establish `special account for public fund redemption` in order to systemically manage redeemed fund and conduct a parliamentary investigation to discover why such a loss occurred.

In response, the MDP vehemently criticized the GNP saying, "The GNP is distorting the truth by applying 7% of annual interest rate to 69 trillion won in unredeemable public fund."

Kim Hyo-seok, chairman of the second Policymaking Committee in the MDP said, "10 trillion won was invested in kind by the government to Korea Development Bank and Industrial Bank of Korea. The money is redeemable since the government holds the stake."

He added, "23 trillion won in interests is not included in public fund but the government already added note that the government would foot the bill."

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