G7 Agrees to Postpone Debt Payments on Loans Granted to Ukraine

The Group of Creditors of Ukraine (GCU), which includes all G7 nations, has agreed to postpone payments on loans granted to Ukraine until 2027, when the current IMF programme for Ukraine expires.

According to the press service of Canada’s Department of Finance, representatives of all G7 nations agreed on a joint position regarding the Ukrainian national debt.

“The provision of financing assurances by the GCU entails an extension of the standstill from 1 August 2022 over the period of the IMF programme (2023-2027), consistent with the national laws of the creditor countries,” the report reads.

As noted, the creditor states will introduce an additional debt treatment to restore debt sustainability once the situation is stabilised or at the latest by the end of the IMF programme.

“The GCU will grant a debt treatment consistent with the parameters of the IMF programme, provided that private external creditors deliver a debt treatment at least as favourable,” the Department of Finance said.

The Group urged all other official bilateral creditors to “swiftly reach an agreement with Ukraine on a debt treatment at least as favourable.”

In addition, IMF Deputy Executive Director Vladyslav Rashkovan said that representatives of the Group of Creditors of Ukraine had held a joint meeting in the presence of representatives of the IMF and the World Bank. The Group provided financial guarantees for a new IMF-backed programme.

As a reminder, the Group of Creditors of Ukraine includes Canada, France, Germany, Japan, United Kingdom, and the United States of America. Observers to the Group include Australia, Austria, Belgium, Brazil, Denmark, Finland, Ireland, Israel, Italy, Korea, the Netherlands, Norway, Spain, Sweden, and Switzerland.

Bohdan Marusyak