Ukraine can’t restructure foreign debt without restructuring its debt to Russia — expert

Ukraine’s external debt hit $72.9 billion as of late 2014 while its internal debt stood at $29 billion and its gold and foreign currency reserves were less than $10 billion

KIEV, March 24. /TASS/. Ukraine’s foreign debts cannot be restructured without restructuring of its $3 billion debt to Russia, since this process is to rest on equal attitude to all creditors, Oleg Ustenko, the executive director of the Blazer International Fund, told TASS on Tuesday.

“We cannot restructure all the debts without Russia, because the first and foremost condition of debt restructuring is equality – all creditors must be granted equal rights. If restructuring is for all it means it is for all,” he said, adding that in such conditions “Ukraine is driven into the corner.”

Ustenko said that in talks with other creditors Ukraine could try to seek lower interest on loans, which was impossible with Russia. “Whereas Ukraine would try to press all other creditors to bring down the interest to 6-7%, it wouldn’t be able to do that in respect of Russia. We are to pay a coupon rate of five percent per annum on the Russian loan,” he said, adding that such low interest could be called a “bonus” interest.