Ukraine has called on creditors to soon as possible reach an agreement on debt restructuring within the framework of the EFF program with the IMF, as this solution is mutually beneficial and will allow to avoid the negative experience of Greece and Argentina, Ukrainian Finance Minister Natalie Jaresko has stated.
“We will not repeat the mistakes of Greece and Argentina. Debt restructuring is inevitable and cannot be postponed,” she said, speaking at the Peterson Institute for International Economics in Washington on April 17.
She noted that the $40 billion aid package as part of the four-year EFF program foresees budget funds savings in the amount of $15.3 billion through restructuring.
Jaresko again noted that this restructuring would include the maturity extension, coupon reduction and principal reduction.
“We are flexible, we are open for solutions how we will combine these three measures to hit the IMF program targets. But I have to emphasize these targets are carved out of stone,” she said.
According to the program with the IMF, the legal deals on changing the conditions of borrowing are to ensure the implementation of three quantitative liabilities of Ukraine to the IMF to achieve concrete debt figures: saving on foreign payments under state debt liabilities guaranteed by the state and debts of economic entities of the public sector of economy worth some $15.3 billion over the period of the IMF program implementation; maintenance of the state debt/GDP ratio at no higher than 71 percent of GDP until 2020; and support of general needs in financing the budget for debt transactions at average 10 percent of GDP (no more than 12 percent of GDP a year) in 2019-2025.
