Reported remarks by the President-elect, Mr Kim Dae-jung, about "national bankruptcy" in South Korea were misunderstood, his party said late yesterday.
"The president-elect did not mean there was a real possibility of a national bankruptcy but wanted to express his willingness to undertake restructuring," the senior vice-spokesman for the National Congress for New Politics Party, Mr Kim Minseok, said.
Financial markets were unhinged by Mr Kim Dae-jung's candid comments, quoted in yesterday's edition of the leading Chosun Ilbo newspaper. It quoted Mr Kim as telling party members on Monday: "We don't know whether we would go bankrupt tomorrow or the day after tomorrow. I can't sleep since I was briefed [about the financial situation]. I am totally flabbergasted.
"This is the bottom. It's a matter of one month, no, even one day. I just can't understand how the situation came to this. I can't help being angry," he was quoted as saying.
"The government did this to our country," Mr Kim said. "Our response to the crisis must be accurate and no single mistake must be allowed."
Officials at major South Korean banks were critical of his remarks, saying they had caused renewed alarm about the financial crisis facing the country.
He does not take office until February 25th, but the incumbent President, Mr Kim Young-sam, has promised him a voice in national affairs until then.
Meanwhile, the militant Korea Confederation of Trade Unions threatened an "all-out struggle" if the government tried to make it easier for companies to lay off workers. Mr Kim had said on Monday that layoffs were inevitable if that was the only way companies could survive.
AFP reports from Beijing:
A South Korean negotiator emerged from long talks with his Northern counterparts yesterday to brusquely announce no agreement had been reached on whether, and how, his country would provide unofficial humanitarian aid to the starving North.
"Tomorrow," the South Korean Red Cross chief delegate, Mr Lee Byung-Woong, snapped as he emerged from a two-hour, closed-door session.
The two countries are stuck on three demands the South Koreans have made about how they want the food to be distributed within the North.
The South wants to help monitor the distribution of aid. It also wants the South Korean press to be allowed to cover the delivery. In addition, it is asking that the distribution route directly cross the demilitarised zone of Panmunjom.
See also page 14