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Ukrainian Realities of Sovereign Debt Restructuring through the Lens of Historical Retrospect
Zhylinskyi A. I.

Zhylinskyi, Andriy I. (2024) “Ukrainian Realities of Sovereign Debt Restructuring through the Lens of Historical Retrospect.” Business Inform 7:371–378.
https://doi.org/10.32983/2222-4459-2024-7-371-378

Section: Finance, Money Circulation and Credit

Article is written in Ukrainian
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UDC 336.143:336.27

Abstract:
Geopolitical challenges and socioeconomic upheavals, which intensified as a result of the armed military aggression unleashed by the russian federation, significantly complicated the process of forming the revenue part of the State budget and caused a significant increase in public expenditures, which led to a budget deficit and the inability of Ukraine to service its sovereign debt obligations in the form of Eurobonds. Therefore, there was a need to restructure sovereign debt obligations. The problem statement of the article includes determining the prerequisites and evaluating the prospects of restructuring Ukraine's sovereign debt obligations in wartime conditions. The aim of the article is to highlight the retrospective, current trends and to assess the prospects for reaching agreements with creditors in the process of restructuring sovereign debt obligations on favorable terms for the economy of Ukraine. General scientific and special methods are used: dialectical, system, comparative, historical, statistical, method of grouping, expert evaluations, predictions. The essence and significance of the restructuring of sovereign debt obligations in the external State debt management system is revealed. Attention is focused on the peculiarities of the restructuring of sovereign debt obligations in the conditions of wartime. The retrospective of the formation of approaches to restructuring during geopolitical disasters is analyzed. The foreign experience is systematized and the best practice of sovereign debt management is summarized. The prospects for the restructuring of sovereign debt obligations on favorable terms for the economy of Ukraine are substantiated. It is proved that geopolitical upheavals, such as wars, revolutions and the collapse of empires, are usually accompanied by significant write-offs of foreign debts. Historically, it has been confirmed that during wars and revolutions, the average discount (write-off) of the current value of the debt during restructuring reaches 98%. It is emphasized that the Government of Ukraine needs to reach the agreement of creditors regarding the write-off of 60% to 98% of the external debt in accordance with the best practices in the field of sovereign debt restructuring.

Keywords: sovereign debt obligations, restructuring, public debt, debt sustainability.

Fig.: 1. Tabl.: 1. Bibl.: 15.

Zhylinskyi Andriy I. – Candidate of Sciences (Economics), Adviser, LLC «Financial Company «Ecofinance» (77 Sichovykh Striltsiv Str., Kyiv, 04053, Ukraine)
Email: [email protected]

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