A brilliant move was offered by Ukraine's leading business figure Igor Kolomoysky to the new President of Ukraine, Vladimir Zelensky – to default and thus get rid of all the state debts!
I wish I could see the creditors' wondering faces. They seem to have never even imagined such a "trick" while shoveling their money into the post-Maidan country. They – the bankers in Europe and the United States, the International Monetary Fund and the World Bank – have lent the Kiev authorities tens of billions of dollars in recent years – typically at interest. And Zelensky, as the head of the new government, will have to return a considerable part of these money to his Western "friends" in the nearest future. At interest as well. Kiev says 2019-2020 will witness Ukraine paying 17 billion dollars in public debt. As a matter of fact, the country's gold and forex reserves contain the same amount of currency at the moment.
The Ukrainian Finance Ministry makes no secret of the fact that this year will become the greatest challenge in the history of the country as regards debt repayment. And the National Bank of Ukraine (NBU) has announced that the schedule of foreign debts payments is "hectic", but the institution expects that further cooperation with the IMF as sort of a safety cushion will make all of them possible. This is the opinion and stance of the financial authorities that are as busy as a bee working in their offices, even though the head of state has been changed.
It is little wonder that Kiev is already voicing the traditional "It's all the previous President's fault!" For Zelensky the "previous" one is Poroshenko, for Poroshenko the "previous" one is Yanukovych, for Yanukovych the "previous" one is Yushchenko, and so on and so forth deep into the history of independence, and no one will ever find those guilty of accumulating huge debts... But the above mentioned Western financial institutions are not going to forgive those debts. Kiev can sell itself the idea that the debt is not that huge, being even "three times less" than it really is, which some Ukrainian experts are arguing about on local TV. But for the IMF and other "friends of Ukraine", such arguments are of no interest at all and they only want the money to be recovered on time and together with interest thereon. End of story.
By the way, unlike TV experts, real businessmen understand this pretty well. For this very reason Igor Kolomoysky made a sensational proposal about the possibility of Ukraine's urgent default. Moreover, to voice such a proposal he chose one of the most authoritative Western financial platforms – the pages of the London Financial Times newspaper. In a recent interview titled "Ukraine oligarch urges Volodymyr Zelensky to default on debt" he said exactly the following: "In my opinion, we should treat our creditors the way Greece does. That’s an example for Ukraine." And then: "How many times has Argentina defaulted? So what, they restructured it. It’s fine".
As for Argentina, regular defaults have become a "bad tradition" there. During the period from the 19 to the 21 century, the Argentine authorities have resorted to this financial instrument eight times! Eight. Sort of a "national sport" with a 200-year "credit record". And everyone managed to get used to these force majeure events and do not worry a lot after them. Such a tradition, they say. Therefore, the case of Argentina stands distinctive.
Greece has its own peculiarities. When on July 1, 2015 Athens defaulted being unable to return the 1.54 billion euro tranche to the International Monetary Fund, Europe did not even turn a hair. One and a half billion – that's nothing. Moreover, European banks have settled for restructuring the Greek debt of nearly $350 billion.
But... there was one interesting detail – the banks continued to lend to the Greeks in such a way that a lion's share of the funds hitting the Greek accounts rapidly flew further – to the cash departments of German and other creditor banks. That is, for the Germans, this "aid" to Greece resulted in a flow of money the Greeks owed to them and are now returning by means of new loans. As a result, the debt kept growing in Greece, while the creditors were getting their way. That's what the interest of European financial institutions was as regards the Greek "case", as they now say. And they got their money, while the Greeks were compelled to tighten their belts. However, they still have the sea and the sun, which contributes to the people's smooth temper, even amid a default.
But the 17 billion in repaying the debt of Ukraine for the year 2019 are indeed a huge amount of money. A default may entail quite a different sort of consequences. Repudiation of the 17 billion is monumental! And there is no interest of the IMF, the Europeans or even the Americans who took patronage over the Kiev regime, to forgive such a sum. Moreover, this default shows the intention to get rid of the country's entire debt of up to $80 billion.
Indeed, Ukraine is a different kettle of fish. The West, having formulated a slaving association agreement in 2013, expected to receive income thanks to Ukrainian lands, and quite a lot. After all, it was not for the sake of a Ukrainian default with multibillion losses for the USA that Assistant Secretary of State Victoria Nuland distributed cookies during the Maidan coup, but for the sake of the American banks' future profit.
No, the foreigners have not unraveled the secrets of the mysterious Ukrainian soul... Thus, journalist with The Financial Times Max Seddon writes the following about this: "Igor Kolomoysky’s comments in an interview with the Financial Times will ring alarm bells with Kiev’s western backers." Sure – they can lose billions due to Ukrainian revolutionaries. And who appeared the ones to punish themselves at the end of the day? The West is getting old and cannot calculate the consequences of its actions.
And, in all honesty, such a default with "undressing" the westerners would be quite legitimate – their boomerang launched in Ukraine cannot but return to Europe and the United States, as it is recently happening in a variety of situations provoked by Washington and Brussels. Justice must prevail after the NATO forces supported the coup in Ukraine and blessed the Kiev rebels to start a civil war. Such provocations have to be paid for with their own money. So let Zelensky default! And let the money saved on the default be used to restore the Ukrainian economy. That would be fair.
