OTTAWA – Ukrainian Prime Minister Arseniy Yatsenyuk delivered a warning Tuesday to private bond-holders that the government “will do everything” in order to ease its massive debt burden.
But at the same time he touted a newly minted free trade deal with Canada as a sign the country is open for business.
His remarks came at the end of a whirlwind visit to Ottawa and just ahead of a meeting Wednesday where Ukraine’s finance minister will try to cajole private creditors into accepting a plan that would see a major writedown of the country’s debt.
The meeting involving Finance Minister Natalie Jaresko is aimed at reaching a restructuring deal before a possible default.
The country’s economy is battered by the war with Russian separatists in the east and the government in Kyiv has until July 24 to repay notes to bondholders totalling $120 million.
Yatsenyuk, in an interview with The Canadian Press, said Ukraine’s offer, which would see the country repay over half the existing $10 billion debts held in private hands, is largely supported by the International Monetary Fund and G-7 ministers, including Canada’s Joe Oliver.
“We are very adamant to strike a deal with the private creditors,” Yatsenyuk said in the interview late Tuesday. “The private creditors need to realize they need to contribute and support the Ukrainian people.”
He warned that the government “will do everything in order to lift this huge debt burden that was made under the Yanukovych regime.”
Former president Viktor Yanukovych, who fled the country during a popular uprising in February 2014, borrowed heavily from private bond-holders and amassed nearly over $10 billion in debts.
Yatsenyuk argued the creditors knew what they were getting into.
“They were all aware they can easily go into arrears as they financed an entirely kleptocratic pro-Russian president,” he said.
The country’s parliament has passed a law that allows the government of President Petro Poroshenko to suspend payments to the private foreign creditors. If the creditors don’t agree with the restructuring plan, the government could simply default.
Unlike Greece, Yatsenyuk has repeatedly signalled the Ukrainian government is committed to reform and the government sees the impending privatization of state assets as an opportunity for investors, including Canadians.
He said Canadian criminal forensic accounting expertise would be helpful to a new Ukrainian office, set up to track billions of dollars “stolen” by Yanukovych and his associates.
“I believe Canada has huge experience in investigating corruption cases because they are a country with an extremely low level of corruption,” he said. “Some friends of us believe Ukraine can eradicate corruption not in a hundred years but in a hundred days. I would be happy to do this, but we need to find a superman.”
German police last month arrested Borys Tymonkin, a banker with close ties to the former regime, but Yatsenyuk says ferreting out where the money went will take time.
Yatsenyuk met with Prime Minister Stephen Harper and Defence Minister Jason Kenney on Tuesday about Canada’s upcoming deployment of military trainers.
He has regularly pressed western allies, including Canada, to provide defensive weapons to Ukraine’s hard-pressed army.
Late last month, a published report said the Conservative government had started to shop around the idea of adding Ukraine to the Automatic Firearms Control Country List, which would faciliate weapons sales.
Yatsenyuk wouldn’t comment on that directly, but said he hoped “no one would veto the decision of some states to supply defensive weapons.”