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People may be breathing a sigh of relief now that hospitals are back in business, but how will they pay for their medical bills?This is because some 24 commercial and special-purpose banks nationwide are scheduled to go on a full strike July 11, in opposition of the government's plan to integrate financial institutions.

As a result, the Korea Federation of Bank and Financial Labor Unions (KFBU) will be voting today whether they will make good on their threat to carry out a nationwide stoppage of the financial sector.

Bank executives have tried to subdue public panic by claiming that scheduled union walkouts will not immobilize banks' essential functions, assuring that all senior level officials will go on regular duty.

However, the KFBU, which comprises of about 80 percent of financial institutions' workforce, vows to have a far greater debilitating impact.

"The scheduled strike in July will be different from past bank union strikes," warned union leader Lee Yong-deuk. "We will close shop and halt operations." Flooded with paralyzing strikes from doctors, hotel workers and trade unions, the National Police Administration has vowed for a stern response to illegal protests.

"Recent illegal rallies and demonstrations have only served selfish interests by holding the public hostage," Police Chief Lee Moo-young said. "All instigators will be punished by law."

Nonetheless, the labor union gave the government an ultimatum that if it does not address its demands to abandon its plans to "forcefully integrate" financial institutions immediately, it will form a massive gathering of up to 50,000 unionists in Yoido starting July 11 and initiate large-scale labor strikes all throughout next month.

The unionists are adamantly opposed to mergers and consolidations in the financial industry, claiming this would result in massive layoffs and downsizings.

The government, in response, has denied it is forcefully pushing for mergers, claiming it is rather pushing for the establishment of financial holding companies, which would not procreate downsizings.

The government states that financial institutions brought under the umbrella of a financial or bank holding company would not lead to massive labor cuts because each subsidiary would still function independently.

Furthermore, the government argues that such tie-ups would help bring a much better allocation of financial specialization into the industry, thus enhancing global market competition.

"Under the financial holding company system, the industry will benefit from the economies of scale, which include the reduction of overlapping investments in information technology," explained a high-ranking official of the Ministry of Finance and Economy. "In addition, due to restrictions on cross-subsidiary transactions, financial troubles affecting one subsidiary are unlikely to spread onto other subsidiaries."

As a result, top economic policymakers are being very cautious in their wording, saying they are seeking "combinations," rather than mergers, in light of the substantial opposition it would encounter.

Financial Supervisory Commission (FSC) Chairman Lee Yong-keun said last week that although the government still promotes consolidation of the industry, it would not force the issue if labor and management are strongly opposed to it.

This strays much from Lee's earlier position, which had opted for a swift bank consolidation as soon as the National Assembly passes legislation pertaining to the establishment of financial holding companies.

The FSC head has cautioned against associating financial holding companies with bank mergers, assuring critics that such a tie-up would not induce the downsizings and massive layoffs usually associated with consolidations, which is what banking sector labor unions fear as inevitable.

"Although it is true that the government is thoroughly examining a scenario involving the tie-up of banks into financial holding companies, we will not force any such scenarios to occur and assure that any such tie-ups would need consent from all parties involved," the FSC head said.