Ukraine not pursuing debt restructuring, Finance Ministry says

Debt restructuring or the revision of the size of the state debt is not an issue for discussion, Deputy Finance Minister Ihor Umanskiy said during a Dec. 24 briefing, the UNIAN news agency reported. “It’s too early to raise questions about restructuring,” he said, explaining that total amount of financial aid to Ukraine has yet to be determined in talks with potential lenders, or the Donors Conference.



Umanskiy also mentioned that Ukraine does not have any grounds for changing the parameters of negotiations with the IMF. “We have discussed the entire reform package with the mission, and we have passed the draft budget to them”, he said. Umanskiy also expressed his hope that the IMF technical mission will return to Ukraine in January and develop a proposal for the Executive Board.



Alexander Paraschiy: Umanskiy’s statements suggest that the core hopes of Ukraine to avoid any restructuring talks are related to the size of possible financial support from donors other than the IMF. Given the membership of the “Donors Conference” (which the government seem to heavily relying on) is not yet known, the risk of Ukraine’s insolvency looks really high right now.



What we are sure about is that there will be no donors if there is no deal with the IMF, and we see some risks of that. Recall, the Ukrainian government submitted a loose spending plan to parliament on Dec. 23, and we don’t expect it will satisfy the IMF without changes. From Umanskiy’s words, we understand that the IMF did not offer any positive feedback to the suggested spending plan.



Therefore, the 8.8% of GDP fiscal gap suggested by the Cabinet does not look promising because the IMF established a 5.8% of GDP general budget deficit limit. Without radical revision of the proposed 2015 draft budget, the plan to avoid restructuring does not look realistic.

Источник: Конкорд Капитал