1. Solidarity with Ukraine? Let’s pay off the country’s debt
The people of Ukraine have stood up against the imperialist oppressor and continue to fight a heroic war for dignity and sovereignty. Now that Ukrainian civil society groups are calling for debt cancellation, we must show that our solidarity is not just an empty slogan.
As a result of the rough terms imposed by international creditors after the 2014 Russian aggression, Ukraine was forced to pay the lion’s share of its budget for debt servicing. Now, the country needs to be freed from this burden more than ever. In the face of the Russian invasion, the state must provide military equipment and food supplies for the army and the territorial defence units. Resources are needed to protect the civilian population, provide housing for the displaced and medicine for the wounded. The money Ukraine is spending on servicing its debt can help it here and now.
Let’s pay off the country’s debt!
2. Cancel Ukraine’s crippling debt
Even before the invasion, Ukraine was one of the poorest and most indebted countries in Europe. Decades of corrupt governments acting without consulting the people have left the Ukrainian economy weak and dependent on international loans. The Russian aggression of 2014 only exacerbated this problem.
Since the 2015 restructuring, Ukraine’s debt burden has become unsustainable. Ukraine has to spend around 10-15% of GNI yearly on debt servicing. The outflow of this money hampers Ukrainian development and takes away critical money needed to sustain the state. Now – when Ukraine has to defend itself against Russian imperialism – debt servicing is even more painful.
Ukraine needs our support. Let’s pay off the country’s debt!
3. An investment in the future
Bombing and actions targeted at destroying the economic potential are taking a serious toll on Ukraine. According to Ukrainian Prime Minister Denys Shmyhal, the losses in infrastructure and economic production have already reached $560 bn. We can already be sure that Ukraine will need huge financial resources for the post-war reconstruction.
Debt relief should be a first step if we want to help Ukraine. The current level of debt will stand in the way of any rebuilding efforts by eating up a large proportion of economic aid and blocking access to capital needed for large-scale investments. By freeing Ukraine from this burden we can create fiscal space for public investment and social spending as well as ease much needed access to capital.
Ukraine should not be left servicing its current debt while taking on more loans with equally rough terms. Let’s pay off the country’s debt!
4. The ECB should take over the cost
Ukraine’s external debt at the end of 2021 amounted to $130 bn. That is less than 1% of the annual GDP of the European Union. Taking over the cost of debt servicing, or even writing it off entirely, won’t come at a huge cost to us. At the same time, it will offer Ukraine a real change.
To cancel Ukraine’s crippling and unfair external debt would mean a huge relief for a society in the middle of an existential fight. It would make an investment in Ukraine’s future – for rebuilding. It would remove the strings of austerity attached to the loans.
There is no room for doubt. Let’s pay off the country’s debt!
5. Stop Putin
We have no doubt that Putin’s Russia has carried out unprovoked and unjustified aggression against a sovereign state. We categorically oppose an order in which the stronger imposes its will on the weaker by force – and this is how Moscow’s actions must be seen. We must therefore do everything to support the Ukrainian struggle against the imperialist aggressor.
Writing off Ukraine’s debt is an effective way of supporting its fight against Putin. The money Ukraine is spending on servicing its debt can help strengthen its defensive capabilities. It can fund military equipment and food supplies for the army and the territorial defence units. These financial resources can also be used to protect the civilian population, provide housing for the displaced and medicine for the wounded.
We need to stop Putin. Let’s pay off Ukraine’s debt!