Ukraine Looks to Hasten Debt Restructuring

The New York Times writes that Ukraine is moving quickly to avoid a repeat of the ongoing Greece crisis and restructure its debt. The article contends that the Ukrainian government, along with the IMF, is attempting to strong-arm creditors into accepting “big losses” in the process of negotiating a bailout deal.  The government currently stands accused of using funds allocated to helping Ukraine pay back interest on bonds to finance the ongoing military conflict in east Ukraine, a charge that Kiev does not dispute.

The terms of the bailout stipulate that Ukraine save approximately $15 billion over the next four years, according to the article a possibility only if Ukraine reduces its payments to creditors. Kiev is currently asking for a 40% reduction in the principal amount borrowed in order to meet obligations set forth by the IMF, while creditors are instead asking for an extension on payments until 2019 in order to recoup the entirety of funds lent to the Ukrainian government during the Yanukovych and Poroshenko administrations. Debt is a serious source of concern for the Ukrainian government as illustrated by recent reports that its public debt will reach 95% of GDP by the end of the year.

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News Briefs:

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  • Chinese transportation company Huawei recently won a contract from the Turkmen government to funnel passengers between the Turkmen cities of Bereket and Ak Yayla on the Iranian border. The new 265 kilometer line was signed off on by Kazakhstan, Iran and Turkmenistan in December and is one of a growing number of lines filled by Huawei in Turkmenistan.

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