: :inin Kyiv (EET)

Ukraine’s debt should be reduced – economist Lawrence H. Summers


Lawrence H. Summers, one of America’s leading economists, university professor at Harvard and a former US Treasury secretary, states in his interview to the Financial Times that reform-minded Ukraine merits debt reduction

 

Lawrence H. Summers states that Ukraine’s case for debt reduction is very strong and the failure to achieve it can be caused by private financial interests:

“Ukraine, the international community and its creditors will soon have to reach a conclusion about how to handle the country’s debt. The case for debt reduction is as strong as any that I have encountered over the past quarter century. How the issue is resolved will say much about the extent of international commitment to Ukraine and to resisting Russian aggression. Failure to achieve debt reduction would also confirm the view of those who believe that private financial interests disproportionately influence public policy,” says Lawrence H. Summers.

Though Ukraine is in a state of quasi-war with Russia, Ukraine has done a lot to provide reforms. Although Ukraine needs strong support, such as IMF programme:

“The moral, geopolitical, and economic case for the provision of strong support is compelling. The International Monetary Fund has done as much as can reasonably be asked with a programme totalling $17.5bn. While bilateral support from the US and Europe could be increased and the World Bank is missing a major opportunity, Ukraine’s viability ultimately depends on what happens to its debts,” underlines Lawrence H. Summers.

“There is much in Ukraine that the rest of the world cannot control. But we can make sure that the country’s scarce resources are put to use restoring its economy rather than paying off those who made loans they now regret. And we can seize the opportunity to make clear that the world financial system will be operated to support the global economy not the other way round,” says Lawrence H. Summers

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