Very Secret Negotiations


May 27, 2015

Very Secret Negotiations

By Aleksandr Rodzhers

Translated from Russian by J.Hawk

The “negotiations” have been continuing for over two months. Results so far? Zero.

Ms. Yaresko more than once said that they are negotiating every day. Although just recently Bloomberg wrote that there has not been a single meeting between Ukraine’s MinFin and the creditors’ committee representatives. With whom (or with what) was Yaresko negotiating this entire month? No idea.

And only yesterday did Yaresko FIND OUT the names of some of the firms which own Ukraine’s eurobonds:  Lazard Ltd., Blackstone Group International Partners LLP, BTG Pactual Europe LLP, TCW Investment Management Co., T.Rowe Price Associates Inc. and of course Franklin Templeton.

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I don’t know how you can negotiate if you don’t know with whom you are negotiating and don’t even have meetings with them. Unless you are holding spiritual seances.

Yaresko also reported as “victory” that “MinFin advisors are hoping to schedule a meeting with the creditors.” Not “they scheduled a meeting,” but “are hoping to schedule a meeting.” That’s a huge breakthrough, no question about it.

Although Yaresko could not even name an approximate date for said meeting.

Instead, she idiotically said that “now that we know the names of the creditors, it means we have overcome a barrier and that we can start proper negotiations.”

What do you mean, “start”? Haven’t you been “negotiating” for two months, and “successfully” at that?! If you look at the news archive, you’ll see that Yaresko has been reporting on daily basis that “negotiations are continuing in a constructive manner.”

So how are we to interpret Yaresko’s announcement that we are “on our way toward an outcome”? “They told us to go f*** ourselves, and we’re on our way?”

J.Hawk’s Comment: I suppose the big mystery is what the creditors’ committee wants to do. There are a few possibilities:

–They are playing hardball. Still, even in hardball it helps to occasionally meet the other team on the playing field!

–It’s either default now or default later. That’s a bit more plausible explanation, because, frankly, nobody regards Ukraine as anything other than a failed state in the making, with an untrustworthy leadership to boot. But that would mean the creditors have resigned themselves to the inevitable, and I’m not quite sensing the air of resignation. I’m also not sensing calls to the IMF or US Treasury to bail out Ukraine so that the creditors get their money back (the “Greece scenario”). Which means we’re left with…

–The default is part of the plan. Once they default, Ukraine’s “fire sale” will begin in earnest…

Opinions? Alternatives?

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