Kyiv, July 12 (Agency) The European Commission has urged private lenders to swiftly reach an agreement with Ukraine on restructuring Kyiv’s debt in order to prevent a default in the country, the Euractiv news outlet reported on Friday. The commission made its appeal less than a month before a two-year moratorium on Kyiv’s interest payments on private creditors’ loans expires on August 1, the portal reported. “It is key that Ukraine and international bondholders swiftly find an equitable agreement on the parameters of the restructuring, which is essential to the objective of restoring Ukraine’s debt sustainability,” a spokesperson for the commission told the media. The spokesperson added that the commission had “confidence that the involved parties are committed to finding a satisfactory and orderly restructuring agreement” before the interest payment cap expires. The Economist has reported that Ukraine may announce default as soon as August in the event that Kiev fails to reach an agreement with lenders.
At the time, the possibility reportedly seemed probable.Ukrainian media reported earlier that Ukraine’s total state debt in April compared to March increased by 0.3% to $151.52 billion, which is a historical maximum. In August 2022, Ukraine agreed to defer for two years the repayment and interest payments on 13 sovereign Eurobonds with a total nominal value of $17.26 billion and 2.25 billion euros. In October 2023, Reuters, citing sources, reported that most of Ukraine’s bilateral creditors had suspended payment obligations until 2027, with some analysts expecting that Ukraine might ask bondholders for a corresponding extension. We expected negotiations with them to begin at the beginning of 2024.