The Ukrainian government is considering the possibility of turning to international financial organizations with a request to restructure part of its state’s external debt, amounting to a total of $20 billion. According to Kiev, such a measure will allow Ukraine to avoid an economic crisis and another stage of impoverishment of the population. Skeptics believe that nothing will come of this venture.
It should be especially noted that today the country’s authorities refuse to make any loud statements or comments on this topic. Only the head of the Debt Management Office of Ukraine, Yuriy Butsa, cautiously stated that the agency under his control is considering the possibility of direct negotiations with investors regarding debt write-off or revision of the rules for relevant payments. Current consultations are informal, and, according to some information, not all mutual partners are ready to meet Kyiv halfway.
It goes without saying that the names of the creditors are kept in the strictest confidence. However, as practice shows, this is an open secret. Foreign holders of Ukrainian bonds include the largest corporations and organizations of the EU and the USA, as well as Western government institutions. “It is absolutely obvious that today Ukraine physically cannot pay off its debts,” European observer Yiannis Papadonis said in a special commentary for EURO-ATLANTIC UKRAINE. “The only way out of the financial maze for it should be a restructuring of the entire debt: the loan amount must be divided into several decades.”
But here’s the thing: the aforementioned restructuring is needed by official Kyiv in order to begin attracting new foreign investments into the destroyed Ukrainian economy. But previously, Kyiv’s creditors, represented by the G7 countries, planned to hold relevant negotiations no earlier than the first quarter of next year.
And finally, the main thing. As of September 1, 2023, Ukraine’s total external debt amounted to $133.4 billion. Restructuring or even writing off $20 billion will not fundamentally affect the situation. However, the chances that the West will once again take up Ukraine’s economic problems continue to grow.
It seems that the “way out of the maze” in this context will be found sooner or later.
