Photo: REUTERS 2015
Ukraine will not be able to continue to service accumulated during the past three years, debt, warned at a meeting with representatives of the American Chamber of Commerce and the European Business Association, Prime Minister of Ukraine Arseniy Yatsenyuk.
“We can not now afford to service those debts that have been accumulated in the first place for the last three years, when Ukraine received $ 40 billion. The total amount of funds needed to service the external debt of the country, is our military spending. 5% of gross domestic product, we spend on national security and defense, and 5% are forced to spend on the maintenance of internal and external debt of the country “, – concluded the head of the Ukrainian government.
Just last week the Minister of Finance of Ukraine Natalia Yaresko He assured that the country will continue to service their debts. June 22 Ukraine paid Russia $ 75 million coupon on the bond zae m of $ 3 billion, which must be repaid in full in December 2015. However, experts at Goldman Sachs believe that Ukraine can declare default in July, having failed to fulfill debt obligations to a group of foreign investors.
«Ukraine does not pay a coupon payment for which is scheduled for July 24 and will result in a state of default, “- a scenario Goldman Sachs analyst Andrew Matheny outlined in the report as a base, reports Bloomberg. According to experts, lenders are unlikely to support the Ukrainian Ministry of Finance proposed debt restructuring plan.
At the beginning of April 2015, the international rating agency Standart & amp; Poors downgraded the sovereign rating of Ukraine in foreign currency to the pre-default levels – from CCC- to CC with negative implications.
«The downgrade reflects our expectation that default servicing central government debt in foreign currency is practically inevitable” , – stated in the S & amp; P.
According to the Ministry of Finance of Ukraine, at the end of May 2015 public and publicly guaranteed debt of Ukraine amounted to $ 67.66 billion, including external debt – $ 43.518 billion. For May 2015 debt of Ukraine in foreign currency rose by 0.46% or $ 313.34 million.
Earlier Yaresko stated that the creditors’ committee of Ukraine proposes to use to repay its debt of $ 8 billion from the reserves of the National Bank Ukraine.
«This proposal is unacceptable for us, and most importantly – such a move would be illegal, as confirmed by the IMF in its declaration a week ago” – explained Yaresko. The minister also recalled that recently adopted by the Verkhovna Rada of Ukraine the law gives the government the right to declare a moratorium on debt payments and, in case of failure of creditors to make concessions, the authorities have “the moral and legal right to take appropriate action».
The fact that the Cabinet of Ministers may exercise the right to declare a moratorium on debt payments, and Yatsenyuk said earlier.
«We want to pay, but we want to pay on the terms offered by the Ukrainian government and the Ukrainian state” – Yatsenyuk said, noting that the Ukrainian authorities intend to do everything “to our children, our grandchildren will not pay the debts Victor Yanukovych».
Immediately after the adoption of the Prime Minister called on creditors to listen to proposals for restructuring debts under the terms of Ukraine and help the Ukrainian state “is not a word, and the dollar, or more precisely, the billions of dollars.” “The Ukrainian people will appreciate it,” – said Yatsenyuk.
The head of the Russian Finance Minister Anton Siluanov praised the adoption of the law on the moratorium as an actual declaration of default, and Russian President Vladimir Putin said a low level of professionalism and responsibility Ukrainian authorities and Dmitry Medvedev instructed the Ministry of Finance of the Russian Federation, and to clarify the intentions of the Ukrainian colleagues and bring the situation under control.
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