West grants Ukraine debt relief
Ukraine secured an agreement with Western creditors on
Thursday to restructure around 18 billion dollars of bonds, the Finance
Ministry announced, while President Petro Poroshenko held talks in Brussels on
the country's security and economic challenges.
While battling a pro-Russian insurgency in eastern Ukraine,
cash-strapped Kiev is also receiving international support to stave off
bankruptcy, in return for carrying out wide-reaching political and economic
reforms, reports dpa.
The deal agreed with private creditors will relieve Kiev of
debt repayments worth about 3.6 million dollars, Finance Minister Natalie
Jaresko said.
The consortium, led by the US investment firm Franklin
Templeton, agreed to write down about 20 per cent of Ukraine's debt to its face
value and delay redemption dates by four years, while increasing its interest
rate from an average of 7.2 per cent to an across-the-board 7.75 per cent, she
added.
Kiev now hopes to strike a similar agreement on 3 billion
dollars' worth of Russian-held debt.
European Commission President Jean-Claude Juncker welcomed
the deal, and said it would allow Ukraine to "continue the reform
process," during a joint press conference with Poroshenko.
Kiev has been criticized for failing to make sufficient
progress in rooting out deep-seated corruption or pushing through the necessary
changes to bring Ukraine in line with Western standards.
EU President Donald Tusk, who also met with Poroshenko,
called on Ukraine to "move more quickly" on judicial reform in
particular.
The Brussels talks also focused on an EU-Ukraine free trade
deal, which officials hope will help Kiev's embattled economy. But its
implementation has been delayed to address Russian fears that low-priced
European goods could flood into Russia from Ukraine.
Juncker was steadfast that the agreement should enter into
effect on January 1. "All manoeuvres aiming to push back the start date
... will be without effect," he said.
Juncker also gave assurances on highly anticipated plans to
lift visa requirements for Ukrainian citizens visiting the EU, and said he
expects the commission to give a green light by the end of the year.
The move requires the approval of member states, but border
matters have become a sensitive issue as the EU is struggling with an influx of
refugees. Juncker insisted, however, that there is "no relation"
between the migration debate and visa liberalization for Ukraine.
Poroshenko's visit follows talks in Berlin on Monday with
German Chancellor Angela Merkel and French President Francois Hollande, to
discuss the ceasefire deal for eastern Ukraine signed in Minsk in February.
Key elements of the deal remain outstanding, while
violations have been reported on both sides, raising doubt over whether it can
be fully implemented by an end-of-year deadline.
Juncker said both parties must implement the accord in its
entirety, adding, "I am addressing myself to Russia in particular, because
the Russian side appears not to be accomplishing the tasks it should be."
On Wednesday, the Organisation for Security and Co-operation
in Europe, OSCE, said the warring sides
had agreed to implement a ceasefire by Tuesday, the first day of school in
Ukraine.
But Poroshenko said there was no reason to wait that long.
"Who knows how many lives we will pay until ...
September 1," he said, adding, "My request [is] to stop fire
immediately."
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