A NEGOTIATING PLOY? OR A US INSPIRED ATTEMPT TO STRIKE ANOTHER BLOW AGAINST PUTIN?
Several East and Central European news agencies and two Slog sources are averring this afternoon CET that the Ukraine is about to default on its sovereign borrowings, and plead “odious debt” in relation to some of it….including all the monies it owes Russia. Ukraine’s President Poroshenko signed the debt moratorium law this afternoon.
Eight days ago, Vladimir Putin argued that the new Ukrainian law being passed would allow the country “to default on its debt without warning as of now” – depending on which internet translation you accept. The Russian leader may be about to be proved correct.
Russian banks are massively exposed to Ukraine sovereign debt – to the tune of roughly £18bn. The total debt stands at £28bn.
But interestingly, Ukraine is making noises to the effect that the IMF debt is not classed as odious. That seems to me a smart play, given that the IMF (and especially Lagarde) would do anything to avoid a write-off.
Given that the IMF is effectively a front for Washington/Wall Street – and for them, Russia is the Great Bogeyman – it is tempting yet again to see the long (and strong) arm of US interests behind this.
And/or, it could very easily be that Ukraine is leaking the imminence of default in order to strengthen its bargaining position. This too would make sense given the serious geopolitical ramifications of a Ukraine default.
It’s too early to make a judgement.
In these our strange times, nobody knows for sure. My hunch is that the IMF will accept a restructuring….and this alone will allow Ukraine to keep going.
But for how long? Sooner or later somebody somewhere is going to miscalculate the brinkmanship. It’s only a matter of time.