Global research team cracks bacteria transmission codes to combat drug-resistant strainsScience & Space May 23, 17:44
Ukrainian politician warns imposing TV language quotas may deepen rift in societyWorld May 23, 17:06
Russia to host 2017, 2018 FIFA Cups at highest possible level — Putin to InfantinoSport May 23, 16:32
Russian rotocraft producer and Gazprom to modify helicopters for offshore deposit projectsBusiness & Economy May 23, 16:21
Chechen human rights ombudsman slams LGBT persecution claims as hypeRussian Politics & Diplomacy May 23, 16:03
Extension of OPEC deal aimed at aligning energy prices dynamics, Kremlin saysBusiness & Economy May 23, 15:41
Kremlin unveils Putin-Macron talks agendaRussian Politics & Diplomacy May 23, 15:16
Syrian opposition faction leader warns Geneva talks may break downWorld May 23, 15:10
Russia's top diplomat says Syria settlement requires Iran’s participationRussian Politics & Diplomacy May 23, 14:38
This content is available for viewing on PCs and tabletsGo to main page
MOSCOW, May 21. /TASS/. The Ukrainian parliament’s resolution empowering the government to declare a freeze on the payment of foreign debts is an absurd decision by the authorities in Kiev undermining Ukraine’s credibility with foreign lenders, polled financial analysts have told TASS.
As he explained the need for giving the government the special powers to suspend foreign debt payments, Ukrainian Prime Minister Arseny Yatsenyuk claimed that it would apply "exclusively to private lenders who are owners of Ukraine’s debt liabilities." Kiev looks prepared to go to great lengths in attempts to present the $3 billion worth of Ukrainian bonds Russia purchased in December 2013 as private lending. In combination with the loans issued to Ukraine by Russia’s commercial debts Kiev owes to Moscow a total $28 billion. Ukraine’s overall debt at the end of 2014 stood at $72 billion.
The Ukrainian authorities’ latest demarche drew an angry response from the Russian leadership. President Vladimir Putin called upon government ministers for protecting Russia’s interests. Finance Minister Anton Siluanov has already declared that Ukrainian debtors would be taken to an international court.
"The Ukrainian parliament’s just-adopted law does not hold water, because it harms the image of Ukraine and by no means contributes to a solution of its financial problems. By declaring its right to suspend foreign debt payments Ukraine has steered itself up a dead end," the director of strategic analysis and research at Russia’s Vneshekonombank, Vladimir Andrianov, told TASS. "The world’s leading rating agencies assign negative credit ratings to Ukraine. With its reputation harmed, Kiev will have no chance to make extra borrowings and settle interest on foreign debts," he said. Russia’s Vneshekonombank owns part of the Ukrainian bonds Russia had acquired. The analyst does not exclude the possibility Russian financial institutions will begin to file lawsuits at international courts.
"Ukraine has declared its intention to join the European civilized community as an equitable member and at the same time it is adopting a decision that does not look civilized at all. If Kiev hopes that in this way it will achieve a rescheduling of its foreign debt, it is making a big mistake. For debt rescheduling the lenders and borrowers normally negotiate concessions and debt prolongation terms. Kiev just wants its debts to be written off. I cannot recall a single instance of any modern country declaring refusal at the state level to pay its debts," Andrianov said.
"I suspect that the International Monetary Fund will not agree to disburse another tranche to Ukraine, because Kiev ignores its terms. But it is quite possible the authorities in Kiev are about to declare a default and ask the IMF for a stabilization loan of the sort that were extended to Russia and South Korea in 1998," Andrianov said.
"I have no certainty Russian banks will take a loyal attitude to the Ukrainian government’s right to freeze foreign debt payments. This kind of a decision cannot be taken unilaterally, it must be agreed with the creditors. The $28-billion dollars that Ukraine owes to Russia’s private and commercial banks co-owned by the state is quite a fortune. If Kiev’s financial authorities have developed problems, why are they so eager to shift them onto somebody else’s shoulders? In case of a delay or Ukrainian banks’ failure to pay the debts Russian banks will be unable to honor their own liabilities to partners," the president of the Association of Russian Banks, Garegin Tosunian, has told TASS.
"Moratorium is a fine word, but it merely conceals Ukraine’s intention to abuse its financial obligations and the inadequate behavior of the authorities in Kiev," Tosunian said.
Financial expert Yuri Kobaladze agrees: "Refusal to pay the debts has always been seen as something wrong and indecent. The decision in favor of a debt payment moratorium reduces Ukraine’s credibility rating to nothing."
TASS may not share the opinions of its contributors