Group of Rada members suggest IMF debt restructuring

Ukraine’s parliament
has registered draft resolution #5607, initiated by 36 MPs, aiming at
addressing the IMF to initiate the restructuring of Ukraine’s debt to the fund.
The draft resolution obliges Ukraine’s Cabinet to prepare a letter to the IMF
offering the “restructuring of part of the external debt.” The initiators
explain the “need to revise the conditions of  cooperation with the IMF”
by the high debt burden of Ukraine and their understanding that “most of the
IMF-offered reforms were contradictory and inefficient for the state.”

Alexander Paraschiy: The initiative has no chance to be voted for and realized, so this looks
like a political position by selected MPs who represent the pro-presidential
faction and some pro-oligarchic groups who look unsatisfied with Ukraine’s
cooperation with the IMF. However, initiatives like this could become
increasingly popular in case Ukraine fails to agree with the IMF on a review of
the on-going Stand-by program in the coming weeks. Ukraine owes the IMF about
USD 10.5 bln, which is repayable in the next 4.5 years (including USD 3.0 bln in the next 1.5
years), so if Ukraine fails to find common ground with the IMF on future
cooperation, it might face troubles with servicing such debt. We, nevertheless,
consider smooth cooperation with the IMF as a base-case scenario for Ukraine
this year.