UKRAINE yesterday passed a bill allowing it to miss payments on foreign debts to protect against “unscrupulous creditors”.
It comes as a deadline approaches on a deal to restructure the country’s debt, which was part of its bailout agreement with the International Monetary Fund (IMF) in February.
If Ukraine fails to strike a deal with bond holders by mid-June, it risks not receiving a second disbursement of cash from the IMF.
“In case of an attack from unscrupulous creditors to Ukraine, the moratorium will protect the assets of the state and the public sector,” the country’s Cabinet said in a statement.
“We doubt that the law is a precursor to a moratorium on debts, but instead it is a way of increasing pressure on creditors to make concessions in the negotiations,” said economist William Jackson from Capital Economics.