14:20 13.05.2022

Restructuring or relief of Ukraine's external public debt can be raised after peace established – presidential adviser

2 min read
Restructuring or relief of Ukraine's external public debt can be raised after peace established – presidential adviser

Restructuring of Ukraine's external public debt is currently not advisable, but this issue or the issue of its partial write-off can be returned to after peace is established, Oleh Ustenko, adviser to the President of Ukraine on economic issues, believes.

"Debt. We will have to raise this issue when peace is established on our land. We are talking about months [after the end of the war] when we will have to return to this issue," he said at the national TV marathon on Friday.

Ustenko fully supported Finance Minister Serhiy Marchenko's position that at present there are a number of reasons why the issue of external debt restructuring is irrelevant. According to the presidential adviser, in particular, all payments on it this year amount to about $3 billion, which is covered by external assistance.

"These are non-critical amounts for us now, since they are financed by our allies. And not critical amounts even later," Ustenko said.

He recalled that Ukraine's total public debt is about $100 billion, the external debt is almost half, while there are no problems at all with respect to servicing and repaying the internal debt.

"If we are talking about the post-war period, then we are talking about a much larger resource [which needs to be attracted] – $600-650 billion," Ustenko said.

"Although we also understand that the dialogue will take place on how to finance Ukraine so that the economic recovery is fast enough. Then [the question] is $50 billion of debt, which can and will be restructured or forgiven – it will rise, and this can be considered additional funding for our country," he added.

According to the adviser, it is wrong to assume that this is a "very long and sensitive" process, since more than half of Ukraine's public debt is debt at the institutional level, and not private, so the issue of their partial restructuring is solved differently.

As reported, on May 12, the U.S. House of Representatives adopted a declaration instructing the U.S. Treasury Secretary to seek from U.S. representatives in international financial organizations, including the IMF and the World Bank, the immediate suspension of debt service payments by Ukraine and the provision of financial assistance to Kyiv on preferential terms.

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