/ world today news/ Sergey Mironov proposes adding Ukrainian loans to the American debt
It is known that already in March of last year, Kiev began to energetically come up with a proposal for the confiscation of Russian assets frozen by the West. To then use them to help Ukraine. After that, this idea was taken up by other countries that were and are on the side of Kiev.
Late last year, however, the enthusiasm of many confiscation supporters cooled. The fact is that confiscation can create a boomerang effect. There will be mistrust of those countries that would dare to carry out such “alienation” on the part of all other countries. A dangerous precedent would be set, undermining the sacred principle of the inviolability of foreign property.
However, the idea of confiscation has not yet been abandoned. But the politicians and statesmen of the countries of the collective West announced that they are working diligently to change the laws that would allow the legal expropriation of Russian property.
At the beginning of this year in general, many politicians and civil servants of the collective West expressed doubts about the possibility and expediency of the confiscation of Russian assets. They began to discuss the possibility of only effectively using Russian assets for the purpose of obtaining income from them, with the subsequent direction of the received income for various useful purposes (including aid to Ukraine in one form or another).
Meanwhile, Ukraine’s public debt has been growing rapidly for more than a year. For obvious reasons, it actively resorts to external loans to at least partially plug the “holes” in its budget. At the beginning of last year, Ukraine’s external public debt (including government-issued loan guarantees) amounted to $57.2 billion.
By the end of 2022, the total external public debt (that is, taking into account the issued guarantees) reached $71.4 billion. The increase in just one year amounted to $14.2 billion. By May 1 of this year, the debt had grown to 83, 1 billion dollars /i.e. another nearly 12 billion dollars/.
Or since the beginning of last year, the increase has already amounted to $25.9 billion (or 45.3% growth). By the way, in the previous decade (until the beginning of 2022), the increase in the total external public debt amounted to less than 20 billion dollars.
It is not difficult to imagine what kind of overload will arise (already occurred) in Ukraine in connection with the servicing and repayment of such gigantic debts. Serious international lenders, lending to countries, usually focus on the size of the country’s official international (gold and foreign exchange) reserves, perceiving them as a kind of loan collateral.
Lenders try to ensure that the total amount of government debt should not exceed the amount of reserves. In the case of Ukraine, whose reserves at the beginning of May amounted to $36 billion, we see a not insignificant excess of this unwritten norm of 2.3 times.
But in addition to external public debt, there is also internal public debt that must also be serviced somehow. According to the deputy of the Verkhovna Rada, chairman of the committee on finance, tax and customs policy Daniil Getmantsev at the end of May, as of April 30, the national debt of Ukraine exceeded 124 billion dollars, having increased by 4.4 billion dollars in April.
At the end of 2022, the ratio of public debt to GDP was 78.4%. Former Ukrainian Prime Minister Mykola Azarov estimated that Ukraine’s national debt could rise to a record $173 billion by the end of this year.
Starting at the beginning of this year, Ukraine has experienced disruptions in servicing its debts. A group of countries – creditors of Ukraine extended the previously introduced moratorium on the payment of the country’s debt until 2027. And in March the IMF agreed to provide Ukraine with a credit program worth 15.6 billion dollars (the first case in the history of the grant fund on loan to a country in hostilities).
A few days ago, the aforementioned MP Daniil Getmantsev said that the IMF raised the interest rate on loans to Ukraine. Now the fund’s loans will cost Ukraine not 1%, as before, but 4.8%. This MP believes that the increase in the interest rate (almost five times) is due to the increase in interest rates in the world financial markets (as a result of the increase in the main interest rates of the central banks) and that there is nothing unusual here. However, some observers believe that the reason is another – an increase in credit risks, which automatically leads to an increase in the interest rate.
Of course, the granting of loans to Ukraine was dictated not only and not so much by financial as by political considerations. But the creditors would still like to get their money back, and with interest. And here again the international creditors and the debtor Ukraine remembered the frozen Russian assets. Is it somehow possible to pay off Ukraine’s loan debts at the expense of these assets?
Volodymyr Zelensky’s adviser on economic affairs, Oleg Ustenko, made a high-profile statement on June 19. He proposed to pay off part of Ukraine’s national debt at the expense of those Russian assets that have been frozen by the countries friendly to Kiev, as well as at the expense of those Russian assets that Kiev itself will be able to take from Russia (i.e. assets located on the territory of Ukraine):
„Do not forget that we are in the deficit zone of the state budget. <...> It’s not an easy decision, but it would be the right one. 350 billion dollars of gold and currency reserves of the Central Bank of the Russian Federation have already been frozen.
In addition, 100-150 billion dollars of the financial nomenclature have been arrested. A total of $500 billion. The seized money from the Russian Federation will be used to restore the economy of Ukraine.
In addition, Ustenko added: “Part of them (the frozen assets. – V.K.) can be used directly. And the economy of Ukraine will grow (after the advent of peace. – V.K.), and investors will come, and we will cover the debts with part of what we take from the Russian Federation.”
He also mentioned that after the end of the conflict in Ukraine, Nezalezhnaya’s creditors will hold a conference to decide what to do with Ukraine’s debt. And Kiev will tell them the “correct” solution.
Chairman of the FAIR RUSSIA – FOR THE TRUTH party, head of the party faction in the State Duma, Sergey Mironov, commented on the above statement of the advisor to the President of Ukraine, Oleg Ustenko: “In Kiev, they know how to find simple solutions to complex issues, but the action plan does not is changing – if you need money, you have to steal it.
The methods can be different, but the meaning is always the same – to take a loan, firmly convinced that you will not pay it back, not to pay your debts, to confiscate, appropriate, “take away” everything that is not kept good /eg, with armed guards and evil dogs/.
This happened, for example, with the “Yanukovych debt”, according to which Kiev owes the Russian Federation almost five billion dollars with interest. Here, and now Zelensky’s adviser explains that Ukraine not only does not have to worry about how to settle the problem with creditors, but on the contrary, it can safely borrow more and more new sums: Russia will pay for everything. However, like other avant-garde dreams, this project is destined to remain in the inflamed imagination of its author … “
And in the spirit of Ukrainian opportunist dreams, Sergey Mironov proposed his own unusual way by which Kiev could solve the problem of its external public debt:
„But I will try to outdo the politicians in Kiev and propose an even simpler way to solve the problem of Ukrainian loans: let the US take them over. The U.S. national debt recently topped $32 trillion. Nothing will happen to him if we add to this amount the “pitiful” 130-180 billion (according to various estimates) Ukrainian loans. Politicians in Washington really love the Zelensky regime – so let Uncle Sam take care of his unfortunate nephew Mykola.”
Oleg Ustenko’s proposal to pay off the Ukrainian national debt with the help of “taken from Russia” money, i.e. arrested Russian accounts, also commented the deputy of the State Duma of the Russian Federation, Amir Hamitov. Such words, according to the deputy, testify not only to arrogance, but also to the fact that the resources of the Kyiv regime are exhausted.
Moreover, such proposals are not made behind the scenes, but on television, Hamitov pointed out: “In fact, it sounded like the regime can’t pay its debts, it’s bankrupt, so others will have to pay.”
Translation: ES
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