05.09.2010 00:01
Recently, very often began to write and speak about the possibility of default of Ukraine. Strangely all this. One could understand if these conversations were conducted in late 2008 or, at worst, in 2009. But to talk like that in the second half of 2010 - it looks more than strange and incomprehensible.

A few words about the theory
Default - a failure to repay the issuer for its debts. Technical default - is the impossibility of the issuer to pay interest on debts. This terminology. Furthermore, when we say "sovereign default", then, above all, imply that the government can not pay their debts, which are usually arranged in the form of Eurobonds and state credits. At the same time everybody understands that the failure of private companies or banks of their obligations under the debt can not be a sovereign default. History knows of instances where in the best of times, in the most advanced and financially strong countries from time to time, individual companies default on their debts. That only is the story of Enron.

A few words about the practice
According to the NBU, as of April 1, 2010 the total short-term external debt of the government and private entities in Ukraine amounted to only 38.55 billion dollars, of which short-term debts amounting to 21.08 billion dollars and 17.4 billion dollars - interest for long-term loans. If we compare these figures with January 1, 2009, these amounts are not large. Then the total amount of short-term debt amounted to more than 45.5 billion dollars and as of 1 January 2008 the total amount of short-term debt amounted to 37.7 billion dollars and no one raised talk of a possible default.

The share of government accounts for short-term debt in the amount of 1,19 billion dollars to this amount would be correct to add on U.S. $ 2 billion loan to VTB, which has received the Government of Ukraine for a period of 6 months. But even with this amount, in general, this volume of short-term debt is small. Most of the short-term debt of Ukraine - is a credit and bonds of private businesses and banks. Thus it is necessary to take into account that this amount of short-term debt of more than 11 billion dollars accounts for commodity loans, which are among the companies and are usually in the form of money is not paid and processed commodity set-off the supply of the counter products. The share of short-term cash loans, which must be rolled over into this year, not more than 3,3 billion dollars

Most likely, these conversations about the default are largely journalistic in nature and designed to once again say, as we all bad. And it all happens in a situation where the balance of payments looks good, the influx of foreign currency increases and reserves NBU only grow from month to month. Most likely, at the end of the inflow of foreign currency will only intensify: as a rule, it always happens with the beginning of the fall, when business processes are activated. So to say that Ukraine expects sovereign default - more than strange. By the way, the current credit defolotnye swaps on Ukrainian Eurobonds are at the level of 543 points, it is higher than in Russia, but lower than in Greece and Argentina and Venezuela.

A few words about the state budget
Indeed, with the budget deficit in Ukraine is not all right. But in Ukraine, always with the state budget disagreements. Every year, when taking the state budget, there is talk that this is - "the state budget development, and then the money could hardly enough to" fill holes "on budget payments to pensioners and public sector employees. Inherent in the VAT refund from us is chronic. This is the tradition of the Ukrainian economy. But it would be a mistake to argue that a large amount of real and razed the state budget could lead sovereign default. Rather, it may lead to higher inflation than to default.

The IMF typically provides loans only to replenish the reserves of the debtor countries. Very rarely can the IMF portion of their loans used to finance the budget deficit. And permission to use the IMF's U.S. $ 2 billion of its loan to finance the budget deficit in Ukraine - it is the exception rather than the rule. Do not think, much less argue that only the IMF and only his credit is the only way to finance the budget deficit. There are other means more effective and do not require the IMF loans. The elimination of budget deficit through the issuance hryvnia - the most effective and simple way to solve the problem of lack of money in the state budget, without any IMF loans. So that all genius is simple.
Alexander Okhrimenko
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