President Lee Jae-myung Proposes Ending War in Liberation Day Address, Calls for Discussion on Halting North Korean Nuclear Advancement

President Lee Jae-myung officially proposed an end to the war on the 15th during the 81st anniversary Liberation Day ceremony held at the Sejong Center for the Performing Arts in Jongno-gu, Seoul. Following his designation of North Korea as a "party to end the war," he also raised the issue of discussing measures to halt the advancement of its nuclear capabilities. On the same day, the Ministry of Unification initiated public discourse on replacing the term "main enemy" used to describe North Korea. This move simultaneously confirmed the government's will across security and diplomatic fronts to alter the division landscape of the Korean Peninsula that has persisted for 73 years since the 1953 armistice.

Blueprint for Peaceful Coexistence Outlined in Celebration Speech

The core message rests on two axes. President Lee publicly appealed to North Korea to "begin discussions as parties to end the war," and proposed simultaneously discussing practical measures to stop the advancement of North Korea's nuclear capabilities. He also reaffirmed the existing principle of respecting the North Korean regime and not pursuing absorption unification. The government's North Korea policy, summarized as "inclusive, stable, and responsible peaceful coexistence," revealed its specific contours on the stage of a national holiday.

"We will embark on a journey to end the war and transform the unstable armistice regime on the Korean Peninsula into a peace regime." — President Lee Jae-myung, 81st Anniversary Liberation Day Celebration Speech

The Ministry of Unification’s actions follow the same tune. The government announced it would bring to public debate the issue of replacing the expression "main enemy"—or primary adversary—used for North Korea in official documents such as the Defense White Paper. This signals a willingness to re-examine the very framework of defining North Korea as an "enemy," and is interpreted as a fundamental restructuring of the perception of North Korea in conjunction with discussions on ending the war. President Lee’s emphasis in his speech that "a new liberation is needed amidst great upheaval" also aligns with this shift in policy direction.

"Self-Harming Security" vs. "Petty Offense"… Intensifying Rivalry Between Ruling and Opposition Parties

The opposition party’s backlash was immediate. The People Power Party refuted President Lee's "end of war" remarks with the expression "security self-harm," defining the celebratory speech itself as a "surrender of security." Senior Spokesperson Park Sung-hoon harshly criticized the overall state administration of the government on Liberation Day, pointing out the Democratic Party's security incompetence. The logic is simple: proposing discussions on ending the war before North Korea's nuclear advancement has stopped is equivalent to laying down negotiation cards first.

The ruling party’s interpretation is the opposite. The Democratic Party dismissed such criticism as a "petty and irresponsible political offensive." They counter that respecting the North Korean regime and excluding absorption unification continues the stance maintained by successive administrations. Given the significant gap in perception regarding North Korea policy, it is highly likely that discussions on a peace regime will face significant turmoil during the legislative process in the National Assembly.

Market Reads Two Faces… Risk Premium and Economic Cooperation Expectations

Economically, there are dual signals. If geopolitical risks on the Korean Peninsula diminish, the risk premium applied to Korean assets could decrease. This is a factor that could positively impact the won exchange rate and the stock market. There are also predictions that expectations for the resumption of inter-Korean economic cooperation could spread to stocks related to the Kaesong Industrial Complex and Mount Kumgang, as well as infrastructure businesses connecting railways and roads.

There are variables in the opposite direction as well. Concerns have been raised that increasing pressure to reorganize the defense budget could affect defense industry orders and military operations. Crucially, since both expectations and concerns remain hypothetical until a actual response from North Korea arrives, it seems unavoidable that volatility in related markets will expand.

North Korea's Response and International Cooperation Key Going Forward

There are three variables that will determine the flow. First is how North Korea responds to the proposal for discussions as parties. Since halting nuclear advancement was set as a condition, the nature and speed of dialogue will hinge on the North's acceptance. Next is cooperation with the international community, such as the U.S. and China. Transitioning from an armistice regime is an issue requiring international procedures, making progress difficult without diplomatic groundwork. The final variable is domestic politics. Without agreement between the ruling and opposition parties, there is a risk that related bills and budgets will drift in the National Assembly.

It remains to be seen whether the public debate on replacing the "main enemy" expression will lead to the revision of the next Defense White Paper, or whether discussions on ending the war will move to the actual negotiating table. However, having publicly disclosed the directionality on the symbolically significant Liberation Day stage, domestic debates surrounding North Korea policy are expected to intensify further. The litmus test for whether the blueprint for peaceful coexistence becomes reality ultimately depends on North Korea's choice.