Why is successful debt restructuring so important for Ukraine?

The debt restructuring agreement that was reached with creditors is a very important step that demonstrates the creditors understand Ukraine’s needs, said ex-Minister of Finance of Ukraine Natalie Jaresko. “This is very important to maintain the program with the IMF,” the expert says, noting that the US determines its economic aid on whether Ukraine fulfills the IMF’s program. In addition, the restructuring saved the Ukrainian budget $11.4B over three years, which will go toward military needs.

The FT noted that the successful restructuring was carried out quickly and under extraordinary circumstances: “In four months, President Zelenskyy’s government has negotiated one of the fastest and largest sovereign debt restructurings in modern history, even as Kyiv mounts an audacious counter-invasion of Russia and pressures Western allies to give more military aid.”

British economist Timothy Ash considers the restructuring an achievement and notes that it entails “little more than an extension of the payment freeze agreement would have given.” This will hasten Ukraine’s opportunity to enter foreign markets when the situation stabilizes.