Default Drama
Ukraine to Creditors: Do Your Worst

Ukrainian delegates, IMF staff, and representatives of foreign creditors led by the Franklin Templeton group are to meet in Washington today. As it mulls its economic options, Kiev has clearly been listening to Bob Dylan, who wrote that “When you ain’t got nothing, you got nothing to lose.”

Ukraine will be arguing that it just doesn’t have the cash to pay up, and its creditors will have to accept a 40 percent writedown on $23 billion in foreign-owned bonds. The Ukrainian envoy said he hopes this will be the start of serious talks about debt restructuring. From Reuters:

In an interview with Reuters, Lisovenko said the talks in Washington, which will include the IMF and the Franklin Templeton-led creditor group, needed to end three months of deadlock and open the door to debt restructuring negotiations.

“My personal opinion and sincere belief is that all the parties involved have enough information necessary for making a quick decision,” he said.

However, if no progress was made Ukraine could declare a temporary halt to payments, he said. “There are no more excuses not to (start restructuring talks),” he said.

The conclusion is not likely to be as foregone as Kiev hopes, though, as the creditors will not take a haircut that big without a fight. But Ukraine seems convinced that its empty hand is a winning one. Asked whether he was concerned about creditors moving in to seize Ukraine’s assets after it stops making payments, the envoy shrugged: “There are no assets, unfortunately.”

Features Icon
show comments
© The American Interest LLC 2005-2017 About Us Masthead Submissions Advertise Customer Service