The Ukrainian government recognized the country as a banana republic
The restructuring of external debt carried out by the Minister of Finance of Ukraine Natalya Yaresko indicates that the Ukrainian authorities do not believe in the growth of the country's economy.
Economist Vsevolod Stepanyuk announced this at a press conference in Kiev, reports a PolitNavigator correspondent.
According to the expert, the debt policy of the previous and current Ukrainian governments further aggravates the economic situation in the country. He recalls that the restructuring of the external debt carried out by Yaresko was presented as a victory.
“But the restructuring was only part of the public debt; the write-off amounted to 20% of this part, $3,8 billion. In exchange, the state took on much heavier obligations - it increased the yield of its securities to 7,5% and pledged to pay, starting in 2020, a share of GDP growth if it grows by more than 3% from the $125 billion growth point. “Said Stepaniuk.
He noted that growth of 3% approximately corresponds to the growth of the global economy.
“If Ukraine grows a little faster than the world economy, then payments for Yaresko’s restructuring will be considerable. If the economy grows as Ukraine needs - 5 - 10%, then the amounts of payments will be significant and will exceed all normal internationally accepted rates on securities. That is, in addition to the fact that the yield was increased to 7,5% and the period was extended until 2040,” the economist emphasized.
“The fact that the deal was unsuccessful is evidenced by the Fitch rating agency downgrading Ukraine’s rating as a borrower in the same year. By signing these papers, the government of Yatsenyuk and Yaresko exceeded their official powers. They also predicted that Ukraine’s economy would not grow by more than 4%, and this is a forecast of a “banana republic” until at least 2040,” Stepanyuk concluded.
The Ukrainian government has recognized the country as a banana republic.