Two years after Korea adopted workout programs, a total of 31 companies have successfully completed workout programs ahead of schedule. As for those companies still under workout, their fate will be determined by the end of the year. There are arguably shortcomings. Among those companies placed under workout program, there are problems resulting from management's moral hazard, while some of the management normalization plans leave room for improvement. To help diffuse concerns in an objective, transparent manner, the government last June announced the status of banks' potential losses and in July presented the timetable on how to deal with financially troubled companies.
Works are also underway to facilitate the exit procedure in systematic, efficient ways.
These systemic improvements will likely expand the room for mutually cooperative economic cooperation. Supported by the government-led infrastructure improvements, private sector cooperation should be based on economic principles and should proceed in a realistic way. At this stage in time, it does not help to discuss details too far in advance. After all, economic cooperation will proceed through two-way talk between the South and North. The second-phase financial restructuring will likely pick up pace after October.