Ukraine PM urges parliament to vote ‘yes’ to debt deal
KYIV (Reuters) – Ukrainian Prime Minister Arseny Yatseniuk urged parliament on Wednesday to vote in favour of a government debt restructuring deal, saying not backing it amounted to supporting a default.
The proposed deal has been welcomed by the International Monetary Fund, whose $40 billion bailout programme hinged on cash-strapped Ukraine finding $15 billion through a restructuring.
But some opposition politicians have said it does not provide enough debt relief, while Russia has said it will not take part, meaning several hurdles remain for the deal to be implemented.
The agreement aims to cut Ukraine’s debt to 71 percent of annual gross domestic product by 2020 from an estimated 100 percent now. It will be discussed by parliament on Thursday.
“The package of (debt) laws … must be passed,” Yatseniuk told a government meeting.
“Not voting for restructuring based on political, populist and untrue evidence … means that these members of parliament support the country defaulting and support Russia, which opposes these agreements,” he said.
Following months of tense negotiations, Ukraine’s finance ministry and a group of its largest creditors, led by Franklin Templeton, struck the deal on Aug. 27, agreeing a write-down of 20 percent of the principal owed.
Ukraine has included a $3 billion Eurobond held entirely by Russia among the sovereign and sovereign-guaranteed bonds to be restructured, but the Kremlin has repeatedly said it will not participate in the process.
The deal requires not only parliamentary approval but also backing from Ukraine’s remaining creditors, some of whom have said the terms are unfair to holders of bonds maturing this year.
Former U.S. treasury secretary Lawrence Summers said on Wednesday it would be a mistake for parliament to vote against the “shrewdly designed” agreement.
If this happened, “international financial support would dry up as Ukraine would be seen as unable to carry through on commitments. Confidence in the stability of Ukraine’s currency and banking system would be put at risk. And its leverage vis-à-vis its debt to Russia would vanish,” Summers wrote in the Washington Post.
(Reporting by Pavel Polityuk and Alessandra Prentice; Editing by Hugh Lawson)