The IMF Executive Board lifted the ban on the continuation of the program of financing of the country if it defaulted on sovereign debt. Under the new rules, priority claims to official creditors remains.
WASHINGTON, 10 Dec. New rules for IMF lending remain the priority requirements of the official creditors before the private; at the same time saying that delayed payments on sovereign debt of countries receiving financial support from the Foundation, allowed in rare cases and should be kept to a minimum, stated in the working papers of the IMF.
On Tuesday, the IMF Executive Board lifted the ban on the continuation of the program of financing of the country if it defaulted on sovereign debt (indebted to the lender). Commenting on the decision, the Minister of Finance of the Russian Federation Anton Siluanov called it hasty, biased, taken exclusively at the expense of Russia and to legalize the possibility of Kiev to pay its debt. Russia intends to initiate a new session of the IMF Board of Directors to confirm the status of the sovereign debt of Ukraine before the Russian Federation Eurobonds for $ 3 billion.
“Official creditors — preferential treatment of their claims in respect of the private requirements. He justified the logic based on them (official creditors) role in global Finance. Official creditors generally do not provide economic support, to make a profit, but rather from considerations of state policy”, — stated in the working papers of the IMF.
The Fund also emphasizes that official creditors, not private, contribute to the rescue of countries in crisis. “In times of crisis is critical to the success of the Foundation’s programmes support from official creditors. They (IMF Directors) stressed the importance of minimizing cases of arrears owed to official creditors”, — is specified.
On the other hand, cessation program funding to the debtor through the Fund because of a default on sovereign debt can lead to more difficulties with the repayment of this debt, because it will stop the program of financial recovery, the IMF explains its decision.
Separately in the IMF rules stipulate a case of force majeure. “May be emergencies, such as a natural disaster when the affected country does not have enough time to make good faith efforts to reach agreement with its creditors”, — is spoken in documents. In this case, the Fund will be able to continue financing the country who default on sovereign debts. If a Fund does not qualify the events that took place in the country, as force majeure, the debtor must prove he made efforts to reach agreement with the creditor.