13 May 2022 16:33

Restructuring, partial cancellation of Ukraine's foreign debt might be addressed once peace is established - presidential advisor

KYIV. May 13 (Interfax-Ukraine) - Considering options for restructuring or partly cancelling Ukraine's foreign debt is irrelevant at the moment, but the matter could be addressed once peace is established, Oleh Ustenko, presidential economic advisor, said on Friday.

"The debt. This issue will have to be addressed when peace is established. It's a matter of months when the issue would have to be revisited," Ustenko said during a national TV marathon.

Ustenko supported Finance Minister Serhiy Marchenko's opinion that the restructuring of Ukraine's foreign debt is unreasonable to discuss now. In particular, all payments Ukraine has to make on its foreign debts in 2022 total about $3 billion, which is covered by assistance the country is receiving from abroad, he said.

"These sums are not critical for us now, as they're being financed by our allies. And they won't even be critical later," Ustenko said.

Ukraine's overall state debt amounts to about $100 billion, its foreign debt makes up about half of this sum, and there are no problems whatsoever with servicing and repaying internal debt, he said.

As concerns a post-crisis period, "we're talking about a substantially greater resources [Ukraine would have to borrow], some $600 billion to $650 billion," Ustenko said.

"At the same time, we also understand that negotiations will be held as to how Ukraine should be financed for its economy to recover quickly enough. Then a $50 billion debt, which might be restructured or forgiven, will be brought up, and this could be seen as some extra financing provided to our country," he said.

It would be wrong to assume that "this is a lengthy and sensitive" process, as more than half of Ukraine's state debt are debts on the institutional rather than private level, and therefore, their partial restructuring is approached differently, he said.

As reported earlier, the United States House of Representatives adopted a declaration on May 12 instructing the secretary of the Treasury to have the U.S. representatives in international financial institutions, including the International Monetary Fund and the World Bank, seek the immediate suspension of Ukraine's payments to service its debts and the provision of financial aid to Kyiv on easy terms.