Kiev to stop paying state debt unless it reaches ‘acceptable agreement’ with creditors

The government of Ukraine ready to stop paying to its foreign creditors unless an “acceptable agreement” is achieved with them, Ukraine Finance Minister Natalie Jaresko said.

“The government is ready to use its legal right to stop paying to its international foreign creditors to protect the economy of Ukraine and save its financial resources until an acceptable agreement (on restructuring of Ukraine’s debt) is achieved with the creditors,” the Finance Ministry of Ukraine says in a statement on its website.  The minister complained that the creditors “have not made their contribution to restoration of Ukraine yet.”

To receive another tranche from the IMF, Ukraine needs to get its $15.3 billion foreign state debt restructured.  “Our goal is to save $15.3 billion payments within the coming four months. Without that money, we will not be able to restore economy rapidly. The current spending on the state debt service is an intolerable burden for the country,” Jaresko said.

EADaily reported earlier that Ukraine may default in late July. “Theoretically, it is possible,” Natalie Jaresko said on June 25 recalling that the Supreme Rada endorsed a law allowing a moratorium on payment of foreign debts to the private creditors Jaresko plans to meet next week in Washington.  So far, the creditors of Ukraine’s $9 billion foreign debt have been against Kiev’s conditions.