Ukraine’s external debt isn’t critical for GDP

Former Economy Minister Bohdan Danylyshyn is urging politicians not to manipulate people’s consciousness with the issue of Ukraine’s external debt.

"Debt policy is a rather complex issue. We must look at the system of debt, what it consists of, what is public debt, what is corporate debt, and what the connection is between them. Let the specialists talk about debt, not political generalists," Bohdan Danylyshyn said on Radio Era FM.

The former economy minister stressed that Ukraine’s external debts figures are not critical. "This figure is approximately 33% of GDP and is not critical for Ukraine’s GDP," he said.

"The government in which I worked tried to meet all its obligations. We were basically paying off debts accrued by previous governments. And of course during the difficult global economic crisis Ukraine had to borrow so that we could develop and maintain our country’s economy. All our payment obligations, as well as salaries of public employers and pensions were paid in full by the government. There wasn’t a single delay in 2008, 2009 or the first months of 2010," Bohdan Danylyshyn said.

Previous governments had borrowed so much that in the crisis year of 2009, Ukraine owed a record amount. "In 2009 we had to return 31.3 billion UAH in direct debts, and if you count debt servicing (with interest) then this figure stands at 50.6 billion UAH, of which 71% was borrowed by other governments," Yulia Tymoshenko said in late 2009.

A considerable portion of foreign borrowing was by the National Bank of Ukraine, not the government. "The Ukrainian government borrowed exactly as much as written in the state budget. This debt is far from critical, and is the lowest among all civilized European countries," Yulia Tymoshenko explained.