President Lee Jae-myung's mention on the 31st of possibly invoking an emergency fiscal and economic decree is interpreted as a strong signal of preemptive action against energy supply instability caused by the prolonged war in the Middle East. The government approved a so-called "war supplementary budget" of 26.2 trillion won ($19.2 billion) the same day, but appears to have concluded that conventional responses alone would be insufficient if the crisis deepens. In effect, he sent a message that he would mobilize emergency powers guaranteed by the Constitution, if necessary, to stabilize both financial markets and the real economy simultaneously. If an emergency fiscal decree is actually invoked, it would be the first in 33 years since the Kim Young-sam administration's financial real-name system in 1993.
At a Cabinet meeting held at Cheongwadae on the same day, President Lee said, "Given that the Middle East accounts for a large share of our energy supply, meticulous emergency measures are required," adding, "In urgent cases, we could utilize an emergency fiscal decree." Article 76 of the Constitution stipulates that the president may issue orders carrying the same force as law during a grave fiscal or economic crisis.
Since the founding of the government, emergency fiscal decrees were issued consecutively up to No. 14 during the Korean War. During the first oil shock in 1972, the Park Chung-hee administration issued an "emergency financial measure" aimed at curbing high interest rates, including a moratorium on corporate debt repayment. Including the Kim Young-sam administration's financial real-name system, a total of 16 such decrees have been invoked.
A senior Cheongwadae official explained, "Rather than meaning an emergency fiscal decree will be invoked immediately, this should be seen as a message that he is ordering extraordinary responses unconstrained by convention, and that there will be no limits on the methods of resolution." The official added, "In particular, it is a signal that the government has sufficient tools at its disposal for crisis response even after the supplementary budget."
President Lee himself also said, "There are likely regulations, laws, and conventions that get in the way of crisis response. At times like these, conventional responses are somewhat insufficient," urging, "Laws and systems can be changed if necessary. I hope you will act boldly."
The transition to renewable energy was also re-emphasized as a long-term solution to energy supply issues. President Lee said, "We need to consider dramatically expanding electric vehicle purchase subsidies in regions where renewable energy production is high." He continued, "Emergency supply adjustment measures for naphtha have been in effect since last week," and urged, "Key raw materials such as urea, urea solution, helium, and aluminum must also be managed as strictly as wartime supplies."
He also announced a stern response policy against fake news. Regarding the recent panic buying of pay-as-you-throw garbage bags, President Lee dismissed the possibility of supply shortages, saying, "Even if production costs double, it does not affect the final retail price. There is absolutely no need for hoarding." He then directed, "We must find the person who first spread the false rumor and take stern and swift action."
President Lee also pointed out, "Malicious false rumors are being spread that 900,000 barrels of oil were diverted to North Korea due to a mishandling of oil priority rights," adding, "Isn't this a form of what people call politics?" The remark is interpreted as targeting claims made by some far-right YouTubers. He continued, "There is a minimum standard of what one should and should not do as a member of the community," and said, "While we are struggling hard to escape a national crisis, inflicting suffering or obstruction through fake news must not be tolerated."
On the same day, President Lee met with a visiting U.S. House delegation at Cheongwadae and emphasized the importance of South Korea-U.S. cooperation, citing the crisis situation caused by the Middle East war. He said, "Due to the recent Middle East war, all countries around the world, including us, are experiencing many difficulties," adding, "We expect the U.S. government, including President Donald Trump, to play a significant role."
Meanwhile, the People Power Party called President Lee's suggestion of an emergency fiscal decree a "political show," and Han Dong-hoon, former leader of the People Power Party, also criticized it, saying, "This is not a situation that warrants invoking an extralegal 'economic martial law.'"