and its international bondholders designed to cut its debt to help finance its war effort ground to a halt on Monday after the two sides failed to reach an agreement.
The issue though is that the government is facing a tight deadline. A two-year debt freeze struck months into Russia’s February 2022 invasion runs out at the start of August, meaning Kyiv could soon find itself on the verge of default again.One thing that could make a difference according to one source familiar with the situation is that the IMF is due to provide new estimates on Ukraine’s economy in the next few weeks as part of the fourth review of the $15.
By talking to a broader set of bondholders, Ukraine might also get a better sense of whether a compromise deal that all parties can accept is possible. The government also launched some other scenarios, such as the “amended base structure” with potentially better terms. While those never made it to the formal proposal stage and were illustrative only, it indicates there might be other structures to talk about.The difficulties in the talks have reflected the deep uncertainty about what happens in the war and how much debt Ukraine’s economy will be able to carry afterwards.