public debt - Ukraine obverts payment default
Ukraine, which is struggling through the defense campaign against the Russian aggression war, has reached an agreement with private creditors on debt restructuring and thus avoided a payment default. "The agreements involve a reduction of Ukrainian debts as the nominal value of Eurobonds is lowered by 37% in the initial phase," Finance Minister Serhij Martschenko announced. The debt amount will decrease by approximately EUR 7.8 billion through the issuance of new bonds and debt settlements between 2029 and 2036.
Originally, the repayment of the Eurobonds was due between 2024 and 2029. With interest, creditors waived approximately 60% of the originally agreed payments. Ukraine saves around EUR 21.5 billion in total before 2033 as a result, it was stated. "These funds are now freed up, which can be used for defense and social expenditures," emphasized Martschenko.
At the end of June, The Economist warned of a default by Ukraine in August if no agreement was reached with private creditors on debt restructuring. State lenders had granted Kiev a moratorium on debt servicing until 2027. The eastern European country has been defending itself with strong Western support since February 2022 against the Russian invasion.
- Amidst the ongoing defensive combat against Russia's offensive war, the public debt of Ukraine has become a significant concern, leading to discussions about debt rescheduling.
- The payment default threat looming over Ukraine in August was averted due to an agreement with private creditors on debt restructuring and a reduction in Ukrainian debts.
- The international community has been closely following the debt crisis in Ukraine, with fears of a potential default adding to the tensions between Ukraine and Russia.
- Serhij Martchenko, the Finance Minister of Ukraine, announced that the agreements with private creditors involve a decrease in the nominal value of Eurobonds by 37%, thereby reducing Ukraine's public debt.
- Ukraine's financial situation has seen improvement due to the debt restructuring, allowing it to save around EUR 21.5 billion for defense and social expenditures.
- The potential for debt settlements between 2029 and 2036, alongside the issuance of new bonds, will further contribute to Ukraine's efforts to manage its debt and maintain its financial stability during the ongoing conflicts.
