The Verkhovna Rada of Ukraine (the Ukrainian Parliament) immediately adopted draft law No. 11396 in two readings. It allows the government to suspend payments on the external public debt in the future during debt restructuring until October 1, 2024.
This was reported by the head of the Budget Committee Roksolana Pidlasa the MP from "Voice" party Yaroslav Zheleznyak.
231 MPs voted for, one against.
The document allows the Cabinet of Ministers to include the state-guaranteed debt of the former Ukravtodor ($700 million and interest) in the state debt and restructure it. The recovery agency (former “Ukravtodor”) cannot do this on its own.
The draft law also provides that the government will have the right, if necessary, to temporarily suspend payments on the external public debt. For example, if there is no official agreement on restructuring by August 10 — by the deadline for coupon payments for one of the issues of government Eurobonds maturing in 2026.
Roksolana Pidlasa explained that a similar technical solution was used in 2015, when Ukraine adopted the Law "On Peculiarities of Transactions with State, State-Guaranteed Debt and Local Debt" in May, reached principled agreements with investors at the end of August, and announced the completion of the transaction in November.
The International Monetary Fund (IMF) supported draft law No. 11396. It should strengthen Ukraineʼs debt sustainability. In March 2023, the IMF approved a new program for Ukraine as part of expanded financing for $15.6 billion. At that time, Ukraineʼs national debt was recognized as unsustainable, and Ukraine undertook to restore its sustainability by restructuring external commercial debt and official bilateral debt.
The Budget Committee emphasized that the restructuring will save more than $10 billion in service payments and repayment of sovereign Eurobonds by the end of 2027.