Could Ukraine default in July next to Greece?
Daria Dieguts
Press TV, Kiev
A debt default is not just Greece’s problem. Next to Athens, Kiev too could fail by the end of July. Now, the Ukrainian government seeks to re-structure its debts. However, little progress has been made in negotiations with the creditors.
Since the beginning of 2015, Ukraine has been facing a deep economic crisis, hit with a national currency devaluation by 70 percent and a massive essential G-D-P drop. As the deadline for the next bond repayment is nearing, the country’s Finance Minister Nataliya Jaresko doesn’t rule out the possibility of Kiev suspending the looming pay-off.
The authorities of the war-torn country struggle to restructure the 15-billion-dollar debt, insisting on a 40% write-down, which private investors are opposed to. The government’s has made offers with some new conditions; that to no avail, however.
With the negotiations in deadlock, Kiev is heading to a financial collapse. However, analysts say Ukraine’s scenario does differ from that of Greece.
Ukraine is critically dependent on financial aid. The IMF approved 17.5 billion dollars in loans for Kiev to avert an economic collapse, demanding in turn, tougher austerity measures and reforms.
Following the financial crisis in Greece, the International Monetary Fund has pledged support for Ukraine, stating that the country will secure the next IMF loan tranche regardless of the results of the debt negotiations.
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