ukraine takes first step toward debt payment freeze
Last Updated : GMT 05:39:09
Arab Today, arab today
Arab Today, arab today

Ukraine takes first step toward debt payment freeze

Arab Today, arab today

Arab Today, arab today Ukraine takes first step toward debt payment freeze

A man walks past a currency exchange shop
Kiev - AFP

Ukraine's cash-starved government took the first step Tuesday toward freezing the payment of billions of dollars in sovereign and state-backed debt owed to some of the world's most powerful creditors.

The war-torn country is trying to reach an agreement by next month that would save it $15.3 billion (13.7 billion euros) over the coming four years and avoid a potentially devastating default.

A successful debt restructuring deal would guarantee the release of the next part of a $17.5-billion International Monetary Fund loan that forms the core of a global $40-billion rescue for the Westward-leaning ex-Soviet state.

Ukraine's parliament on Tuesday took only minutes to overwhelmingly back a government request for "the right, if necessary, to stop payments to foreign debt holders."

"In case of an attack by unscrupulous creditors on Ukraine, this moratorium will protect state assets and the state sector," the government's legislation promised.

Prime Minister Arseniy Yatsenyuk -- a former banker admired in global financial circles for backing deeply unpopular IMF-prescribed austerity steps -- argued impassionately before the vote that "we can no longer pay these debts out of Ukrainians' pockets."

- Heading toward 'messy outcome' -
Analysts said the new law signalled a bid by Kiev to weaken the resolve of Franklin Templeton and four other major private creditors who hold about two-thirds of the disputed debt and argue that Ukraine has the resources to repay it in full.

"Both parties are upping the ante ahead of next month's deadline for a restructuring deal," Capital Economics emerging markets economist William Jackson said in a research note.

"As we see it, it is in both parties' interest to secure a deal, but it looks like negotiations will go right down to the wire and there is a significant risk of an altogether messier outcome."

Ukraine's obligations through 2018 add up to about $30 billion and includes $17 billion in bonds.

Inconclusive talks and a fast-approaching deadline prompted Ukraine's government last week to admit that it was growing "concerned about the approach taken by the creditors".

The private creditors have reportedly refused to accept either lower interest payments or postponing repayment dates.

But the bond-holders appear to be especially upset by Kiev's plans to require creditors to accept a "haircut" that would markedly reduce the value of the bonds themselves.

"I think no one -- neither we nor the creditors -- wants to see Ukraine's financial circumstances grow worse," Ukraine's US-born Finance Minister Natalie Jaresko told Kiev television.

- 'Undeclared default' -
The law adopted on Tuesday does not cover the debt owed by two state banks and one government-owned company that are conducting separate negotiations.

Yet it does include the $3.0-billion loan that Moscow issued in December 2013 to the since-ousted Kremlin-backed president Viktor Yanukovych in return for his decision to back out of a new economic and political association pact with the European Union.

Moscow has refused to extend that loan's end-of-year maturity deadline and further has the right to demand an immediate repayment should Ukraine be judged to be in default.

It is not entirely clear whether the IMF would have the right to release the next $5.0-billion tranche to should Kiev stop servicing the money owed abroad.

Some economists in Kiev said Yatsenyuk's government was bluffing and unlikely to shake the resolve of hardened financial veterans such as Frank Templeton.

"This would be costly for Ukraine because it is really little more than an undeclared default," said Taras Kotovych of Investment Capital Ukraine.

"I doubt that it this (law) substantially improves Ukraine's negotiating position," Kotovych told AFP.

 

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

ukraine takes first step toward debt payment freeze ukraine takes first step toward debt payment freeze

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

ukraine takes first step toward debt payment freeze ukraine takes first step toward debt payment freeze

 



Arab Today, arab today
Arab Today, arab today Jordanian woman reveals her project

GMT 00:46 2017 Saturday ,11 November

Jordanian woman reveals her project
Arab Today, arab today The Big Apple bike boom

GMT 10:47 2017 Wednesday ,22 November

The Big Apple bike boom
Arab Today, arab today Sophian Yussef reveals suitable decoration

GMT 02:56 2017 Thursday ,23 November

Sophian Yussef reveals suitable decoration
Arab Today, arab today Leaders of Russia, Iran, Turkey meet

GMT 10:12 2017 Wednesday ,22 November

Leaders of Russia, Iran, Turkey meet
Arab Today, arab today 'Advanced' cyber attack targets Saudi Arabia

GMT 10:18 2017 Wednesday ,22 November

'Advanced' cyber attack targets Saudi Arabia
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Australian academic's book pulled

GMT 15:20 2017 Monday ,13 November

Australian academic's book pulled
Arab Today, arab today May under Brexit pressure at EU reform summit

GMT 02:14 2017 Saturday ,18 November

May under Brexit pressure at EU reform summit
Arab Today, arab today Delhi half-marathon to go ahead

GMT 03:51 2017 Saturday ,18 November

Delhi half-marathon to go ahead
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Honda recalls 800,000 minivans

GMT 11:43 2017 Wednesday ,22 November

Honda recalls 800,000 minivans
Arab Today, arab today VW says will invest over 34bn euros

GMT 07:19 2017 Tuesday ,21 November

VW says will invest over 34bn euros
Arab Today, arab today Singer Jahda Wahba has unlimited ambitions

GMT 07:56 2017 Monday ,20 November

Singer Jahda Wahba has unlimited ambitions
Arab Today, arab today paObama climate envoy slams Trump's rejection

GMT 16:04 2017 Friday ,17 November

paObama climate envoy slams Trump's rejection

GMT 09:23 2017 Saturday ,18 November

Fedra happy for “Between Two Worlds” success

GMT 11:15 2017 Thursday ,16 November

Angola oil boss sacked by father's protege

GMT 18:41 2017 Friday ,20 October

Designer Aql Faqih aspires to innovation

GMT 11:38 2017 Wednesday ,15 November

Unloved vultures fight for their survival

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts

GMT 13:41 2017 Tuesday ,21 November

French choke up over proposal

GMT 00:44 2017 Monday ,20 November

Japanese regulators raid Airbnb

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday