Ukraine has less than a month to avoid default.

Ukrainian and German leaders held a press conference at a conference on the reconstruction of Ukraine in Berlin, Germany, on June 11.

Creditors have agreed to allow Ukraine to temporarily suspend debt payments for two years, but the deadline for repayments to foreign private bondholders expires on August 1st, leaving the country with little time to avoid default.

According to The Economist , a Ukrainian default could damage investor confidence, which would be disastrous for post-war recovery and complicate Ukraine's future access to financial markets.

Ukraine has proposed a deal to reduce its current debt by 60%, while creditors believe 22% is more reasonable. The IMF wants to reach an agreement with Ukraine on debt reduction, but it is unlikely to succeed within the available timeframe.

Ukraine is in urgent need of financial assistance. While allies have provided significant aid, it has been in the form of weapons and targeted funding, not cash. The EU has pledged more, but the figure remains at only $38 billion over three years.

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According to the IMF, Ukraine will only be able to manage if it implements the comprehensive restructuring that its bondholders have refused. Without a restructuring agreement, Ukraine will have two options: arrange for an extension of the debt moratorium or default.

The cautious attitude of private investors not only reflects Ukraine's financial prospects but also shows that lending to a country in conflict carries significant risks, as it depends on whether that country will win.

Ukraine needs an additional $9.5 billion this year to fund crucial recovery efforts in the defense, energy, housing reconstruction, agriculture , natural resources, digital technology, and information technology sectors.

The Ukrainian Ministry of Finance is continuing negotiations with Eurobond holders regarding restructuring, specifically the partial cancellation of debt in the near future. However, these discussions will be made public.

Meanwhile, a number of foreign bondholders, including BlackRock BLK and Pimco, plan to urge Ukraine to resume interest payments on its debt next year.

Source: https://thanhnien.vn/ukraine-con-chua-day-mot-thang-de-tranh-vo-no-185240702105044817.htm