Original written by Aleksandr Rodzhers and published by Zhurnalistskaya Pravda; translated from Russian by J.Hawk
Ukraine’s D-Day has come. D as in Default. The Kiev regime’s default has become a reality.
It didn’t happen in June, they squeaked through in July, but no matter how long they tried to delay, the end had to come. It was unavoidable.
One can try to obscure the facts, or engage in word plays, or pretend that nothing happened, but “temporarily suspending payments on extinguishing and servicing national debt,” according to the Ukraine Cabinet of Ministers Memorandum No. 978-r, is nothing other than default.
Ms. Yaresko, in her efforts to calm down the investors, managed to set the whole shop on fire due to her intellectual shortcomings. Her ministry issued an announcement asking the creditors “not to do stupid things.”
The announcement also says that “We expect that the owners of Ukrainian foreign debt securities and state-guaranteed Fininpro securities will not attempt to exercise their rights due to the temporary suspension of payments, since such a decision is a technical one.”
On the basis of what legal authority? Don’t they also expect to have all their debt forgiven, just because? They shouldn’t get their hopes up.
And what does “technical” mean? Technical default is still a default! Announce it or don’t announce it, but if you can’t transfer funds, it sets off a ten-day countdown after which, if payment is not made, a “full” default takes place.
I really like the second part of Yaresko’s announcement where she, apparently, completely discredited herself: “The proposed agreement on debt restructurization which was agreed upon with Ukraine creditors’ committee and supported by the international community, is and will remain the only effective means of solving the problem of reducing Ukraine’s excessive debt burden. Our country can’t allow itself to pay its debts in accordance with current terms. The agreement on restructurization is the only possible solution to the problem.”
If non-payments and a direct admission of the inability to pay own debts is not a default, then it’s time to change the definition.
Even in the part concerning “the only possible solution to the problem,” Ms. Yaresko fibbed. The other solution is Ukraine’s bankruptcy procedure. Description, protocol, fingerprints, freezing of accounts, and property auction. Which would be fully satisfactory to the vast majority of creditors.
Another elderly con-lady attempted to support Yaresko, namely Ms. Lagarde from the IMF. The old hag announced “I am calling all of Ukraine’s creditors to support the debt operation proposal.”
Such a cheap and primitive trick: “write down your part of the debt, so that the Kiev regime could return our debts to us in full amount.” An attempt to resolve one’s own problems at the expense of others.
Except that the creditors are not children and will not fall for similar tricks. Bloomberg published a statement by the international legal firm Shearman and Sterling LLP, stating that “the holders of Ukrainian state securities worth $500 million which are to be paid on on September 23 announced that they have the votes giving them the ability to block the restructurization agreed upon by Ukraine and the creditors’ committee.” Their clients comprise 25% of the committee’s votes, and intend to block the deal which was planned for October (and which the junta already managed to propagandize as a done deal).
Please not it’s not the $3 billion which Ukraine owes Russia (and which the Russian government categorically refused to restructurize), that sum is not even being discussed yet! And other holders of short-term Ukrainian securities have also spoken out against the deal provisions.
Here’s the bottom line:
1. The Kiev regime today refused to pay $500 million of its debt which it was obligated to return on September 23, 2015.
2. The owners of these $500 million of obligations are not agreed to prolong credit repayment by 8 years on proposed terms.
3. Yaresko acknowledged Kiev regime’s inability to carry out debt payments.
This is a classic, by-the-books, default.
Now is the time to get some pop-corn or sunflower seeds and wait the official reaction to the refusal to pay debts. The count-down has started, 10 days will pass very quickly.
