Debt restructuring is the second largest source of outside financing for Ukraine’s new IMF program
. The Fund itself brings $17.5 billion over four years; $9.6 billion comes from governments and other multilaterals (including Europe, the United States, and most recently, China), leaving $15.3 billion for the "debt operation." The jargon makes debt restructuring sound like a mix of surgery, conspiracy, and military campaign, which together pretty much sum up Ukraine's challenge.
, the surgery. The IMF has been unusually prescriptive about the debt deal parameters, even as it tells Ukraine and its creditors to get there voluntarily ... by the first program review in June 2015. On top of $15.3 billion in cash flow savings (out of $19.9 billion in scheduled payments, see table), Ukraine has to get its debt stock under 71% of GDP by 2020, and avoid payment spikes long after the program ends. Gross budget shortfalls cannot exceed 12% of GDP in any given year and 10% on average through 2025. This is quite a turn-about from less than a year ago, when IMF staff and management described Ukraine’s debt as “sustainable with high probability” subject to “uncertainties that come from geopolitics” (aka who knows, but keep paying for now). Over 2014, public debt went from 40.6% to 72.7% of GDP; it is headed for 94% in 2015—up from projections of 63.5% a year ago.