South Korea has finally agreed the terms of an economic rescue package with the International Monetary Fund. It's believed to be about $55bn, nearly three times the amount South Korea initially asked for to help it overcome its economic slump. The deal was signed in Seoul after protracted negotiations between the two sides, with the South Korean government trying to soften the strict conditions demanded by the IMF for the bail-out package. Here's our correspondent in Seoul, Charles Scanlon:
Agreement was finally reached between South Korea and a team from the International Monetary Fund after more than a week of tough negotiations in a Seoul hotel. The head of the IMF, Michel Camdessus, arrived in Seoul on Wednesday to oversee the end of what had clearly been a tough bargaining session.
He said the IMF would provide $21bn to South Korea pending ratification of the agreement, and the rest of the package would be made up by the World Bank and the Asian Development Bank as well as individual governments including the United States and Japan. Mr Camdessus said South Korea had agreed to put together a strong programme in response to its financial difficulties.
He said it included far-reaching reform of the financial sector, a liberalisation of trade and capital flows as well as an improvement in the structure of business corporations. South Korea's large family-owned business groups are seen by many as the root of the problem, with their often reckless expansion and high debt burdens.
South Korea is reported to have resisted some of the more stringent reforms being demanded by the IMF. In a confused week of negotiations it frequently announced that an agreement had been reached and was then forced to back-track.
The government is worried that the IMF requirements will lead to a string of corporate bankruptcies and much higher levels of unemployment.