Western banks do not want to feed Ukrainian pensioners
Ukraine is unlikely to be able to restructure its $23 billion debt by its June deadline, which would put it on the brink of default, investors say. The country's authorities and creditors are taking tough positions, so market participants are preparing for protracted summer negotiations, they write "Vedomosti".
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Western bankers say the likelihood of default is growing, despite Ukreximbank's creditors agreeing in April to extend the maturity of its $750 million bonds by three months. The government hopes that this will set a good precedent, since these securities were the first in line for repayment of 29 loans that it wants to restructure. This should allow Ukraine to save $15 billion on debt servicing by 2019.
Lenders do not agree to this. They also do not like the intention of the Minister of Finance of Ukraine Natalia Yaresko to increase wages and pensions against the backdrop of an economic recession and 40% inflation. If these social issues are not resolved, the government will be overthrown, she frightens Western creditors. But American banks do not intend to pay Ukrainian pensioners.
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