The former deputy Minister of Finance of Ukraine Ihor Umanskyi thinks that the state debt restructuring, conducted in the previous year, was not a successful project, Umanskyi said in the interview to Economic Truth.
He stated that he filed for resignation due to “too different views with Minister of Finance Natalia Yaresko on the financial and economic processes and methods of their solution”.
“For example, I do not think that the restructuring of state debt of Ukraine is a successful project. I am strongly convinced that in few years, even if this Verkhovna Rada completes its full term, the new parliament and new government will face problems with servicing state debt”, Umanskyi said.
According to him, the Minister of Finance, which will be in the Cabinet of Ministers after 2020, will face major difficulties in working with VRI (Value Recovery Instrument), the securities, issued by Ukraine, in lieu of lenders’ consent to write off the partial debt – ET).
“What is the problem? This instrument is attached to the GDP growth and, and if the growth is 3% per year, Ukraine will pay the certain part from this growth. From GDP growth, even not from the state budget! Is the GDP growth of higher than 3% real? From the mid-2012, the Ukraine’s economy is constantly contracting. In view of the low basis of comparison we have huge growth prospects”, said the former deputy of the minister.
Meanwhile, Umanskyi said that he found out about the restructuring terms from external sources.
“This is one of the reasons for resignation, the most important questions, in my opinion, should be discussed inside the team before they are presented for public discussion. Otherwise this is not a team. When the decisions, the most important not only for the ministry, but also for the country, are “born” not in the ministry, then for me this is not acceptable”, said the former deputy minister.
Umanskyi thinks that it would be reasonable to set a ceiling for amounts, paid on VRI tools in the amount of haircut.
“Then these conditions would be not bad enough. Even, in spite of the increase of servicing rate and the insignificant period of the debt principal restructuring”, he said.
“However, we created the delay-action bomb. The only solution for the ministers of finance, who will work after 2020, - to search for the way of restructuring these tools in order to avoid default on them”, Umaskyi summarized.
It should be reminded that on August 27, Ukraine and the Committee of Creditors reached agreement on the restructuring of partial state debt, totaling USD 18 billion.
The restructuring envisages the full writing-off of USD 3 billion, the payment deferment on loan principal, the amount of USD 8.5 billion for 4 years as well as fixing the coupon rate on all bonds at 7.75% per annum.
