Ukraine “hopes and believes” the continued financial and military support of the United States under the administration of incoming President Donald trump, even if it will strengthen ties with Russia, said the Minister of Finance of Ukraine.
Republican trump, whose inauguration will take place on Friday advocated the improvement of relations with Moscow and the lifting of sanctions imposed in 2014 due to Russia’s annexation of Crimea and support for Pro-Russian separatists in Eastern Ukraine.
In an interview published Monday in the Times, trump offered to cancel anti-Russian sanctions in exchange for an agreement to reduce nuclear weapons.
Comments trump concern in Ukraine rescued from bankruptcy thanks to the financial support of the International monetary Fund and Western loans.
“The United States is a country that supported us in very difficult times, during two revolutions, when it was absolutely critical after Russian aggression. I believe it will continue,” — said Alexander danyluk Reuters on the sidelines of the world economic forum in Davos.
“Historically, Republicans have supported several solutions, such as a US guarantee of the bonds and the provision of military support, was initiated by the Republicans, so we hope and believe that support will continue to grow,” he said.
This week the British court will consider the dispute between Russia and Ukraine on the debt of $3 billion — Moscow demands full repayment of the Eurobonds, while Kiev says that Russia needs to restructure this debt, as the holders of other bonds.
Danyluk said that the Ukrainian defense has a strong case, showing that the debt was taken under duress.
“We were under great pressure, we suffered huge losses that devastated our economy… Our goal for the next three days to ensure that our case was heard and (the judge) could make a fair conclusion,” he said.
On the question of whether Ukraine will be able to return the money, if you lose the case, danyluk said:
“If there is a negative decision, the appeal is always possible.”
Danyluk said that Kiev carries out economic reforms and fulfilling commitments to the International monetary Fund needed to obtain financing. In particular, budget 2017 adopted with a deficit not exceeding 3 percent of gross domestic product.
According to danyluk, the next tranche is expected in early February.
“We plan to raise around $1 billion”, he said.
Also there are plans to issue new Eurobonds under a US guarantee, the Minister said, without going into details. In the previous two years Kiev has attracted in foreign markets of $3 billion thanks to the American guarantees.
Despite the fact that other proposals the IMF, in particular on the key pension reform failed to push through Parliament, danyluk sure that this decision will be made in 2017.
The IMF supported Ukraine’s decision to nationalize the country’s largest PrivatBank. Due to risky lending, the Bank is left with a hole in capital of approximately $5,65 billion. Officials estimate that 97 percent of corporate loans have gone related to the shareholder companies.
While the state has issued bonds to recapitalize the Bank, some lenders do not agree with the decision to convert Eurobonds of PrivatBank in the capital and threatened a lawsuit.
Danyluk said that everything was done in accordance with the law and the government had reason to believe that some of the bondholders were “related persons” with the former shareholders.
“If you have a serious suspicion and reason to believe that the bond holders are related parties, you have no right not to carry out bail-in”, he said.
“It was not done to harm those who were not related parties, but it was the only way… the bondholders knew about the potential risk of PrivatBank and could have foreseen it.”