Western banks do not want to feed Ukrainian pensioners
Ukraine is unlikely to restructure its $23 billion debt by its June deadline, putting it on the brink of default, investors believe. With the country's authorities and creditors taking tough positions, market participants are bracing for protracted summer negotiations, Vedomosti reports.
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Western bankers say the likelihood of default is growing, despite Ukreximbank's creditors agreeing in April to extend the maturity of its $750 million bonds by three months. The government hopes that this will set a good precedent, since these securities were the first in line for repayment of 29 loans that it wants to restructure. This should allow Ukraine to save $15 billion on debt servicing by 2019.
Lenders do not agree to this. They also do not like the intention of the Minister of Finance of Ukraine Natalia Yaresko to increase wages and pensions against the backdrop of an economic recession and 40% inflation. If these social issues are not resolved, the government will be overthrown, she frightens Western creditors. But American banks do not intend to pay Ukrainian pensioners.
Western banks refuse to feed Ukrainian pensioners.