Ukrainian and European civil society organisations are warning that hedge funds could make billions out of Ukraine, financed indirectly by Western aid. In a statement released today the campaigners call for legal protections to ensure speculators cannot demand billions of dollars in payments from the GDP-linked warrants.
The GDP-linked warrants originate from a debt restructuring in 2015 and allow for large increases in payments if there is economic growth, but no corresponding fall in payments when growth falls. Having collapsed in 2022 after the Russian invasions, Ukrainian GDP began growing again in 2023 as a result of the international aid and military production for Ukraine’s defence. According to media reports, payments of up to $6.6 billion could be due, 2.5 times the original value of the bonds. Owners of the bonds have refused to accept a fair debt restructuring proposed by the Ukrainian government. The bonds are governed by English law.
Artem Tidva, from Ukrainian civil society organisation Sotsialniy Rukh, said:
“These instruments were created for a world that no longer exists. Today, Ukraine is facing an exceptional situation. As long as these bonds are not comprehensively restructured, Ukraine must refuse to make any payments, and it needs the political, legal and financial backing of its international partners to do so.”
Tim Jones, Policy Director at Debt Justice, said:
“The G7 and the United Kingdom in particular have a responsibility to support Ukraine to get these bonds restructured, because they are governed by English law. The UK should pass a law to protect Ukraine from being sued while negotiations are ongoing. Sustainable reconstruction of Ukraine must not fail because of the profit interests of a few.”
In the statement launched today, Sotsialniy Rukh and European partner organisations call for:
- Ukraine to refuse to make any payments until a sustainable restructuring in the interest of a just recovery has taken place.
- The G7 to protect Ukraine politically and legally – in particular by legally blocking action in European courts, above all in the UK.
- The IMF must continue its support for Ukraine – even if Ukraine defaults on the warrants.
Notes
[1] The statement is available at https://debtjustice.org.uk/wp-content/uploads/2025/05/Ukraine-statement.pdf