The Verkhovna Rada of Ukraine adopted the draft laws, prepared by the Cabinet of Ministers of Ukraine, necessary for completion of restructuring of external debt of Ukraine. 309, 309, 307, 308 of deputies voted for draft laws respectively, while 226 are at least needed, RBC- Ukraine reports.
As stated the Prime Minister of Ukraine Arseniy Yatseniuk, the failure to adopt these draft laws could lead to Ukraine’s default.
“USD 3.6 billion, which make up 20% of 18 billion of the debt, are written off by lenders unconditionally. The unpaid balance will be repaid from 2019 to 2027. The interest rate is 7.75 percent. Lenders agreed to make such significant concession for Ukraine subject to receipt of the instrument, the so-called state derivative. We pay under this instrument only in such cases, when the real GDP growth is more than USD 125.4 billion, compared to the current GDP of USD 85 billion, only if the real GDP growth is more than 3 percent, we do not pay anything till 2021 .We pay under this instrument in such cases. First, if the GDP growth is from 3 to 4 percent we pay 15 percent from growth of more than 3 percent. If the growth of real GDP is more than 4 percent, we pay 40 percent from growth of 4 percent. The validity of this instrument is 20 years (from 2021 to 2040)”, told Yares’ko.
Thus, the draft law №3058 stipulates the introduction of a new type of budget commitment, arising in connection with payments under state derivatives. The state represented by the Ministry of Finance of Ukraine by order of the Cabinet of Ministers will have the right for issuance and placement of state derivatives. The Ministry of Finance of Ukraine will service state derivatives at the expense of funds of State Budget of Ukraine for the relevant year.
According to the draft law №3057 it is proposed to introduce the new type of securities – state derivative, which will be placed by state on international stock markets and to confirm commitment to make payment to the owner of this security in case of reaching certain indicators of gross domestic product of Ukraine. The emission of state derivatives will be the part of budget process and is not subject to regulation by the State Commission for Securities and Stock Market.
By the draft law №3059 it is proposed to allow reduction of financial result before tax for the amount of income, received by tax payers, who are the debtors under external loans, taken out against state guarantee, which are serviced and repaid at the expense of funds of the State Budget of Ukraine, and also not to impose tax on the income of non-residents with source of origin from Ukraine under transactions on placement of state derivatives by non-residents and the income, paid to the non-residents under state derivatives, according to the terms of transaction with state debt on state external loans and the state guaranteed debt.
According to the draft resolution it is proposed to assign the Cabinet of Ministers of Ukraine with the task to ensure completion of transactions with state debt under state external loans, agreed with international lenders on the writing-off of 20 percent of the debt for the amount of USD 3.6 billion and permits temporary exceeding of the total amount of the state debt and the state guaranteed debt, which, according to Budget Code, should not exceed 60 percent of GDP. It is also proposed to obligate the Cabinet of Ministers to submit the plan of events, aimed at bringing the total amount of state debt and state guaranteed debt to the norm, fixed by Budget Code – 60 percent from GDP – within three months after approval of restructuring by the Parliament.
We remind that on August 27 the committee of private lenders is known to agree to write off 20% of Ukraine’s debt and defer payment of the unpaid balance of the debt.
In addition, according to him, there will be limits on payments not more than 1 percent of GDP from 2021 to 2025. Therefore, as noted Yares’ko, the Ukrainian economy will have ten years for growth
