Ukraine Deserves Debt Relief

Ukraine’s crunch talks with its biggest creditors moved into a second day Thursday as both sides sought a workable solution for keeping the former Soviet country from hurtling into default.

A brief joint statement issued by Ukraine’s finance ministry and the Ad-hoc Committee of Noteholders to Ukraine yesterday said the discussions were “detailed” but provided no immediate guidance as to the progress made.

“There is a clause written into the September 23 repayment which states that any changes to the payment must be approved by the bondholders at least 21 days before the payment is due”, the person told AFP.

The negotiations are taking place against a backdrop of escalating tension in Ukraine as the military said pro-Russian rebels shelled the army more actively than at any time in the past six months and may be planning a fresh offensive amid wrangling over a fraying peace accord.

The restructuring is a mandatory part of a broader $40 billion global rescue package that the worldwide Mandatory Fund patched together at the start of the year.

Ukrainian Finance Minister Natalie Jaresko has since submitted a number of counter-proposals whose details remain private but reportedly include a smaller write-down request.

Ukraine has been lurching from one crisis to another since thousands of pro-European demonstrators toppled Kiev’s Moscow-backed government in February 2014.

The 16-month war has now claimed the lives of more than 6,800 people and thrown Ukraine’s already-stagnant economy into paralysis.

A worker maintains a tank at the Kiev armored plant, in Kiev, Ukraine, Friday, August 14 2015.

“If you have these instruments on the table, you have a pretty good chance of getting an agreement”, added Syzdykov, who believes the two sides will settle eventually for a 15 percent haircut with warrants linked to economic growth, providing creditors with an opportunity to get exposure to a potential economic recovery in Ukraine.

Russian Federation denies any links to the insurgents and officially provides them with only political support at negotiations and UN Security Council debate.