Voice of Sevastopol     
» » Ukraine’s parliament approves law granting right of moratorium on foreign debts payment

Ukraine’s parliament approves law granting right of moratorium on foreign debts payment

Author: Ayre от 20.05.2015, 12:00
(голосов: 1)
Ukrainian parliament

Ukrainian parliament

KIEV, May 19. /TASS/. Ukraine’s parliament has approved the law granting the government the right to impose moratorium on foreign debts payments.

The document was upheld by 256 MPs.

Before the vote in the parliament, Prime Minister Arseniy Yatsenyuk said that Ukraine was to pay $30 bln of foreign debt and $17bln of domestic debt in four years.

He called on the country's Western partners to grant it real financial assistance.

"As part of our cooperation with the IMF and foreign creditors, we have received $ 9 bln in loans, but we paid back $14 bln to them. That's not fair. The Western partners ought to make real steps to help Ukraine," he said.

According to Yatsenyuk, in 2014, Ukraine’s total debt amounted to $72 bln.

"We have reduced [the debt] by almost $3 billion," he said.

He explained that the country’s budget for 2015 envisages 90 bln hryvnia ($4.07 bln) to pay foreign debt, which is equal to the country’s total expenditures on the national security for this year.

"We are getting the support of international partners, but this is not enough to lift the debt burden from the people of Ukraine," the Prime Minister said.

He added that it concerns only private creditors, holding the debt of Ukraine.

"We ask our foreign private creditors to heed the request of the Ukrainian government and to restructure the country’s debts, held by private creditors. We expect an income from the restructuring to be about $ 15 bln. We ask them to grants us the right to impose a moratorium on foreign debts. We want to pay, but on the terms, which are proposed by the Ukrainian government," Yatsenyuk said.


Earlier the committee of Western holders of sovereign bonds in London repeatedly rejected the idea of writing-off part of Ukraine’s debt.

The committee includes funds which are managed by investment companies BTG Pactual Europe, Franklin Advisers, TCW Investment Management Company and T. Rowe Price Associates. They hold Ukraine’s bonds worth $8.9 bln.

The group of five US creditors jointly holding Ukraine’s bonds for about $10 bln also spoke against the restructuring of the country’s debt.

Russia does not plan to take part in the program of restructuring either and expects Ukraine to pay its debt on $3 bln euro-bonds in December 2015.

Kiev regards its $3 bln Eurobonds held by Russia as a private loan and that is why it is subject to the moratorium.

Imposing moratorium on foreign debts payments in Ukraine would mean technical default

Imposing moratorium on foreign debts payments in Ukraine would mean a technical default, Executive Director of the Blazer International Fund Oleg Ustenko said Tuesday.

"Imposing moratorium would mean a technical default as a matter of fact," the analyst said. The moratorium scenario is negative for Ukraine, Ustenko added. "This will now solve the problem in a consistent manner, this will just postpone it. Temporary freeze is a bad variant, it would be better to solve the problem now," he said.

"Ukraine would be cut off from foreign debt capital market for at least several years ahead," Ustenko said answering the question of TASS correspondent on the period of foreign debt market freeze for Ukraine. He added that Ukraine would face such a freeze both if it "restructures debts and declares default."

A technical default would mean "a suspension of all programs," Ustenko said. "We would be cut off from the possibility to borrow independently on the capital market," he added.

"If things shape up in our favor debt capital markets will only be unfrozen for us in late 2017 - early 2018. Otherwise they will be frozen for us for 5 years ahead," he said.



"Voice of Sevastopol" asks for help in breaking the information blockade

Уважаемый посетитель, Вы зашли на сайт как незарегистрированный пользователь.
Мы рекомендуем Вам зарегистрироваться либо войти на сайт под своим именем.
Comments: Add Comment
Would you like to leave your comment? Please Login to your account to leave comments. Don't have an account? You can create a free account now.