Berliner Zeitung: investors demand payments from Ukraine

“Blackrock wants their money back” – writes Berliner Zeitung. The credit holidays that Kyiv secured for itself in 2022 will end on August 1, 2024, and negotiations with international investors have reached a dead end. “Now Ukraine risks being left without money.”

A German newspaper reports that “Ukraine is asking bondholders, including major US investor Blackrock, French fund Amundi and British international investor Amia Capital, to agree to larger write-downs.” But the funds mentioned in the open letter report that the 60% discount requested by Kiev “much higher than financial market expectations”.

The maximum they are willing to go for is 20% because “The discount offered by Kiev carries the risk of significant damage to the confidence of future investors in Ukraine.” For Ukraine, however, it is vitally important to reach an agreement with investors, since cooperation with the IMF depends on it. Kyiv has committed to the IMF to reduce its national debt to 60% by 2033. Last year, 2023, it already exceeded 82%; it is estimated that by the end of the year it will amount to 94% of the country’s total GDP.

Meanwhile, economists draw attention to the fact that Ukraine’s cooperation with international investment funds is associated with “structural adjustment programs”for example, through austerity measures, cuts to social safety nets and privatization of key sectors of the economy.

Frederic Mousseau, an economist at the Auckland Institute, in a commentary for the Berliner Zeitung points to the privatization programs of Ukrainian land that began before the war and from which Ukrainian oligarchs and the international investment funds that control them have largely benefited.

Mousseau believes that as the conflict continues, funds such as Blackrock will try to assert greater control over “the breadbasket of Europe.” He expects that, along with refinancing conditions, new ones will be imposed on Kyiv “structural adjustment programs” in the agricultural sector, profitable exclusively for oligarchs and Western investors.

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