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Money Pit: Zelensky govt signals intent to default on tens of billions in foreign debts

Despite countless billions flooding into Ukraine, Kiev can’t pay its debts.

Jordan Schachtel Jul 21, 22, The Dossier, Western governments have allocated well over $100 billion to prop up Ukraine in its war against Russia, with countless billions more flooding into the country at an increasing pace. Yet as each day passes, it’s becoming more and more clear that all of the money awarded and assigned to Ukraine continues to dissolve into a black hole of secrecy, corruption, deceit, and now, default.

On Wednesday, Ukraine finance ministry asked foreign creditors to accept a delay in its debt repayments, requesting a two year freeze on billions of dollars in Eurobonds. Per the Financial Times, “a rescheduling would amount to a Ukrainian default” on Kiev’s tens of billions in foreign debt.

Financial Times @FinancialTimes: Although western financial support has increased since May, Kyiv is still counting on Ukraine’s central bank to buy its debt by selling foreign reserves or printing money, at the risk of setting off an inflationary spiral.

….. Despite all of the money coming in from around the world, Ukraine’s budget deficit has spiraled out of control. Zelensky’s office now claims to have a $9 billion monthly budget deficit, up 80% from just last month.

……………………. In addition to the government as a whole, Ukraine’s state-owned infrastructure and national energy companies have also announced their intent to default on international bonds. Earlier this week, Kiev announced that it has sold some $12+ billion in gold reserves since the start of the war.

The Western government creditors of Ukraine released a joint statement in support of Ukraine’s debt freeze, adding that they “will continue to closely coordinate and assess the situation with the support of the IMF and the World Bank.”

Translation: Western governments will continue to print huge amounts of cash and launch it in the direction of the Ukraine operation. …….  https://dossier.substack.com/p/money-pit-zelensky-govt-signals-intent

July 22, 2022 - Posted by Christina Macpherson | business and costs, Ukraine