Bill Passage Failure Shows Discord in Ruling Party

One of two proposed bills to ease restrictions on the financial industry supported by the ruling Grand National Party was rejected at the National Assembly in Seoul Thursday, the last day of the extra session of the National Assembly.

Ruling Grand National Party leaders suggested the bills after negotiating with opposition parties. Ruling party lawmaker Kim Young-seon, who leads the party`s political committee, urged ruling and opposition legislators to reject the bills, however.

As certain ruling party members voted against or abstained from voting on the bills, only one of the two bills was passed. What happened to the ruling party and the National Assembly on that day?

○ Intra-party rifts

From early Thursday morning, leaders of the ruling and opposition parties began striking spikes off each other over the bills to ease regulations on the financial industry (revised bills for the Banking Act and the Financial Holding Companies Act) governed by the Legislation and Judiciary Committee of the National Assembly. In February, the ruling and opposition parties agreed to handle the two bills at an extra parliamentary session in April. The main opposition Democratic Party broke this promise, however, saying further changes were needed in the bill.

Leaders of the ruling and opposition parties finally agreed to help each other to save face. In other words, the ruling party agreed to change the bills to lower the limit on companies’ stake in commercial banks from 10 percent to nine percent, and reduce the limit on industrial capital’s investment into private equity fund from 20 percent to 18 percent. After the compromise, the Democratic Party promised not to prevent the bills from being passed. The compromise seemed to terminate months-long parliamentary wrangling that began late last year. Unexpectedly, however, the ominous shadow of revolts was cast at the National Assembly.

At 11:45 p.m., the revised bill for the Financial Holding Companies Act was sent to the floor by 169 lawmakers including ruling party floor leader Hong Joon-pyo. Unexpectedly, however, lawmaker Kim presented counterarguments and later questioned the Banking Act. After the revised bill for the Banking Act agreed by the ruling and opposition party leaders was passed, despite her opposition, Kim made another effort to encourage lawmakers to reject the revised bill for the Financial Holding Companies Act.

Kim blasted ruling and opposition party leaders, saying, “Ruling and opposition party leaders colluded with each other without any agreements on policies. They didn’t respect the conclusion drawn by standing committee members after months-long discussion. It is an act of ignoring all the people.” She added, “Today is a day when individual lawmakers are trampled down by the power of floor leaders of the ruling and opposition parties. How can we ask constituents to have firm trust in individual lawmakers?”

koh@donga.com