Ukraine to default if parliament rejects debt restructure proposal - finance minister

Ukraine's Finance Minister Natalie Yaresko © Valentyn Ogirenko
The Ukrainian government will declare a default if its parliament, the Verkhovnaya Rada, rejects creditors’ proposals on restructuring the country’s foreign debt, Ukraine’s Finance Minister told local media.

In an interview with Ukraine's ‘Apostrophe’ news website, Finance Minister Natalya Yaresko said on Wednesday that if the Rada doesn’t support the restructuring proposal “a default will be declared.” The proposals are to be presented in parliament by the end of the week.

Last Thursday, Ukraine and its main creditors agreed to a 20 percent write-down to the face value of about $18 billion in eurobonds and to postpone the payment for four years.

Kiev has asked for a write-off of about 40 percent, having been locked in talks with creditors since March, and has repeatedly warned about the possibility of a moratorium on foreign debt payments if creditors do not agree to restructuring.

READ MORE:Ukraine agrees 20% debt haircut with creditors, Russia refuses to take part     

However, in the interview Yaresko said that she was certain Ukraine would not receive any more favorable conditions than those which international creditors are currently proposing.

I am confident there are no better conditions possible. We had no time. We should have paid or declared a default,” she said.

Kiev said it has offered the same terms to Moscow, which holds $3 billion in eurobonds due in December.

Russian Finance Minister Anton Siluanov reiterated last Thursday in an interview with Russian TV channel Rossiya-24 that Russia would not participate in the restructuring. Ukraine should solve the issue of official debt settlement separately from commercial debt, he said.