Minister Jaresko sees deal with creditors as Ukraine's historical victory
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Ukraine has implemented three major requirements by creditors in a bid to receive international financial support.
As reported by Censor.NET, this was announced by the Finance Minister Natalie Jaresko on air of Hromadske.TV channel. First of all, Ukraine was required to use loan funds to stabilize its banking system - it was necessary to come to agreement with commercial sector as to debt restructuring.
"We did not have enough money to repay everything on time. The country in such a difficult situation was backed by its official creditors: the IMF, the World Bank, the US government, the EU, and they did it against our promise not to give their money to private creditors... They said we had to achieve three objectives. Firstly, we should ease pressure on balance of payments and not send so much currency abroad during the next four years," the minister said.
According to her, they pointed to Ukraine's poor payment capacity, saying that Ukrainians had to work in order for the economy and GDP to increase and not to take so many loans. Secondly, they promised to help Ukraine during the next four years become more solvent, with debt restructuring to be helpful in servicing.
"We did not have enough money to repay everything on time. The country in such a difficult situation was backed by its official creditors: the IMF, the World Bank, the US government, the EU, and they did it against our promise not to give their money to private creditors... They said we had to achieve three objectives. Firstly, we should ease pressure on balance of payments and not send so much currency abroad during the next four years," the minister said.
According to her, they pointed to Ukraine's poor payment capacity, saying that Ukrainians had to work in order for the economy and GDP to increase and not to take so many loans. Secondly, they promised to help Ukraine during the next four years become more solvent, with debt restructuring to be helpful in servicing.
"Our third objective was to alleviate the burden of debt servicing. We agreed that we would reach proper level by 2020 and so far we use no more than 10 percent of GDP (to service debts - ed). This will help avoid losing 50 percent of GDP in favor of creditors in one of the coming years. Everything should be proportioned and predictable," Jaresko said. "I think this is a great victory. A historical one. And not only for Ukraine," the minister added, commenting on a deal with creditors.
Jaresko also said that in the next week everything should be enacted by corresponding laws. After that, Ukraine will address all creditors with a legal proposal. As reported, Ukraine has agreed with international creditors to write off 20 percent of its public debt.
