Ukraine threatens to suspend repayments of its foreign debt

On 19 May 2015, the Parliament of Ukraine adopted a law on a special procedure for legal actions relating to sovereign and state-guaranteed debt, as well as local government debt. The document allows the government to withhold payments to external creditors in respect of the Ukrainian loans and bonds they hold. The decision must always be taken by the government or local authorities for each specific financial instrument.

Presenting the bill, Prime Minister Arseniy Yatsenyuk asked the lenders to help “not with words, but with dollars – to be specific, a billion”, and said that Ukraine did want to pay off its debts, but on its own terms. Immediately after the vote Yuriy Lutsenko, chairman of the Poroshenko Bloc’s faction in the parliament, threatened that if negotiations with the creditors failed, Ukraine would declare that it was technically bankrupt.