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US Treasury Department welcomes agreement on Ukraine debt restructuring

August 28, 2015, 3:04 UTC+3 WASHINGTON
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WASHINGTON, August 28. /TASS/. The U.S. Department of the Treasury welcomed on Thursday the agreement on the restructuring of Ukraine’s debts. Treasury Secretary Jacob Lew said in a press release that "the agreement is an important step towards providing the people of Ukraine with economic opportunity and stability."

"We welcome the announcement that the Ukrainian authorities have reached agreement with the creditor committee on debt restructuring terms that are consistent with the objectives outlined in Ukraine’s IMF program," the statement says. "This agreement will help to improve Ukraine’s public finances, provide the authorities with breathing room to execute their ambitious reform agenda, and strengthen the groundwork for economic recovery and private sector-led growth."

"This progress builds upon the Ukrainian authorities’ significant efforts to improve the business climate, strengthen governance and competition, tackle corruption, repair the financial sector, and eliminate poorly targeted energy subsidies while protecting the most vulnerable members of society - efforts that are wholeheartedly supported by the United States," Lew said.

"We commend the leadership of President Poroshenko, Prime Minister Yatsenyuk, and Finance Minister Yaresko, and we encourage creditors subject to this debt restructuring to move swiftly to complete the necessary steps to conclude this operation, which is critical to Ukraine’s future prosperity," the statement says. "A strong, stable Ukraine is in the interests of Ukraine’s citizens, Ukraine’s neighbours, its international partners, and investors. We all must work together to achieve that goal, and today’s agreement is an important step towards providing the people of Ukraine with economic opportunity and stability."

It was announced earlier on Thursday that an agreement was reached providing for the prolongation and 20-percent write-off of Ukrainian debts to private creditors. Yaresko offered the same conditions to Russia, saying that the full payment of the debt to Moscow is not an option for Kiev’s current authorities. In response, Russian Finance Minister Anton Siluanov confirmed that Russia would insist on the full repayment of the debt that Moscow considers sovereign. "We won’t accept the restructuring or any changes in the rules of provision of funds from the National Wealth Fund. We will continue demanding that Ukraine should fully meet the commitments it made. We will strongly demand a full repayment of $3 bln in December together with the relevant interest," the minister said.

Earlier on Thursday, Ukraine’s Prime Minister Arseniy Yatsenyuk said at an extraordinary cabinet meeting that Ukraine had agreed with foreign creditors on debt restructuring, which involves a 20% write-off of the Ukrainian debt. According to Yatsenyuk, Russia has not joined to the creditors' committee. "We declare that Russia will not receive other conditions," he said. Ukraine’s Finance Minister Natalia Yaresko added that Ukraine had agreed to write off $3.8 billion of $19.3 billion debt. The repayment of the loan postponed for 4 years.

According to the Russian finance minister, Ukraine reached that agreement with commercial creditors, but Russia is an official lender and the restructuring program is not applied to it. "We regard ourselves as official creditors. They meant first of all the settlement of debt to commercial creditors, while the settlement of debt to official creditors, with countries like Russia, is a separate issue," the minister said.

The U.S. Department of the Treasury in its statement makes no mention of Ukraine’s debt to Russia.

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