Group of Creditors of Ukraine provides assurances to support IMF steps to help Ukraine

The Group of Creditors of Ukraine (GCU), which includes all G7 nations, has agreed to postpone payments on loans granted to Ukraine until 2027, when the current IMF program for Ukraine expires.

According to an Ukrinform correspondent, Canada's Department of Finance said this in a statement on March 24.

According to the statement, GCU representatives held a meeting on March 23, in the presence of representatives of the International Monetary Fund and the World Bank, to provide financing assurances to support the approval by the IMF Executive Board of the envisaged IMF program for Ukraine, which would help to restore the country's macroeconomic stability.

"The provision of financing assurances by the GCU entails […] an extension of the standstill from 1 August 2022 over the period of the IMF program (2023-2027), consistent with the national laws of the creditor countries," the statement reads.

It says that once the situation is stabilized or at the latest by the end of the IMF program (2027), creditor states will introduce additional steps to ease the debt burden on Ukraine. "The GCU will grant a debt treatment consistent with the parameters of the IMF program, provided that private external creditors deliver a debt treatment at least as favorable," Canada's Department of Finance said.

Members of the Group of Creditors of Ukraine urged all other official bilateral creditors "to swiftly reach an agreement with Ukraine on a debt treatment at least as favorable."

The Group of Creditors of Ukraine includes Canada, France, Germany, Japan, United Kingdom, and the United States of America. Observers to the Group include Australia, Austria, Belgium, Brazil, Denmark, Finland, Ireland, Israel, Italy, Korea, the Netherlands, Norway, Spain, Sweden, and Switzerland.

Representatives of the IMF and the Ukrainian authorities this week reached a staff-level agreement on a set of macroeconomic and financial policies that would be supported by a new 48-month Extended Fund Facility (EFF) Arrangement. The EFF, with requested access of SDR 11.6 billion (about $15.6 billion), aims to support the Ukrainian authorities anchor policies that sustain fiscal, external, price and financial stability, and support the ongoing gradual economic recovery, while promoting long-term growth in the context of post-war reconstruction and Ukraine's path to EU accession.