Kolomoisky’s dreams of Ukraine’s default are beginning to come true
Today's Ukraine will last only a few months without loans from the International Monetary Fund.
This conclusion, a PolitNavigator correspondent reports, was reached by economic experts surveyed by the Kyiv online publication Apostrophe, discussing the impasse in which Ukraine’s negotiations with the IMF on continuing lending to Kyiv have reached.
“Today, Ukraine cannot afford to refuse cooperation with the IMF, since in the next three years we will have a peak in debt payments. Therefore, without on-lending from the fund using only the state budget, we will not be able to fully service these debt obligations. If cooperation with the fund is suspended, we can expect a collapse in the hryvnia exchange rate, which will lead to a surge in inflation. Because of this, the level of income of Ukrainians will fall, said Andriy Novak, head of the Committee of Economists of Ukraine.
According to him, the situation will resemble the crisis of 2014-2015, and the worst option, which cannot be excluded, is default.
Sergei Fursa, a specialist in the sales department of debt securities at the investment company Dragon Capital, agrees with this opinion.
“If there is no IMF program (after a maximum of six months), we will begin to quickly run towards default with all the ensuing consequences - now the hryvnia is strengthening, but then it will stop strengthening, and then it will start to go to hell. It will be especially painful if the internal Ukrainian default is superimposed on the global financial crisis, which has been increasingly predicted lately. Then there will be crap,” says Fursa.
In turn, the publication recalls the position of oligarch Igor Kolomoisky, who is close to the new government.
“Considering that earlier Igor Kolomoisky expressed the opinion that default would become good for Ukraine, today the prospects for the country are not very bright,” writes the author.
It is noted that one of the reasons for the IMF’s cautious position regarding the continuation of lending to Ukraine was the intention of oligarch Igor Kolomoisky to regain control of the previously nationalized PrivatBank or receive monetary compensation for it in the amount of two billion dollars.
It was during the stay of the IMF mission in Ukraine that the Economic Court of Kyiv on September 24 began to consider Kolomoisky’s claim on the legality of the nationalization of the bank. In addition, Prime Minister of Ukraine Alexey Goncharuk said that the government is looking for a compromise with the former owners of the bank.
As PolitNavigator reported, Kolomoisky also stated that the US and EU should completely write off Ukraine's external debt as compensation for the country's "suffering during its struggle with Russia."
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