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Ukraine may freeze debt payments if talks with creditors fail — finance minister

June 16, 2015, 13:25 UTC+3 KIEV
A moratorium would apply to external bonds beyond the bounds of Ukrainian banks
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© ITAR-TASS/Zurab Javakhadze

KIEV, June 16. /TASS/. The Ukrainian government will consider the possibility of declaring a freeze on foreign debt payments if its talks with creditors on rescheduling debts end in failure, Finance Minister Natalie Jaresko told the Ukrainian parliament on Monday.

"If we fail to bring our lenders to the negotiating table, apparently we shall keep in mind the leverage we’ve got from parliament - the right to decide whether to suspend payments or not," she said.

Jaresko argues that the "possibility of a freeze on debt payments is not a terrible thing."

"It will by no means stop the IMF program. There will be no big pressure either on the Ukrainian population or on the Ukrainian banking system," Jaresko said.

A moratorium would apply to external bonds beyond the bounds of Ukrainian banks.

"They are either outside the country or in the hands of individuals, but not in our banking system," Jaresko said.

She recalled that the rescheduling of foreign debts pursued three main aims.

"Number one is to ease the pressure on the balance of payments by $15.3 billion over a period of four years," she said.

"Number two is to ensure that at the end of the IMF program, that is at the end of the fourth year, we will have a debt/GDP ratio of no more than 71%. And number three - at the end of the fourth year our demand for financing these debts should be no greater than ten percent of the GDP in annual terms on the average," Jaresko said.

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