Ukraine criticises creditors over debt talks

Cash-strapped Ukraine said Tuesday its debt restructuring talks were moving slowly and criticised its creditors for a lack of willingness to engage in negotiations.

"The process is difficult and not fast," Finance Minister Natalie Jaresko told journalists.

"I hope our creditors understand (our problems) because we need to reach an agreement on the second tranche" of the bailout loan in June.

The IMF wants Ukraine to reach a deal with creditors that will achieve $15 billion in savings ($17 billion), giving the government more fiscal space to proceed with reforms, in order to get more money under its $17.5 billion four-year loan programme.

The Ukrainian finance ministry later issued a statement criticising the negotiators for its foreign debt holders, criticising "their lack of willingness to engage in negotiations".

It criticised the fact the creditors committee has in a highly unusual move refused to reveal its membership, with the one known committee member refusing to meet Jaresko and speed up talks.

The ministry also expressed concern "that instead of engaging directly in constructive negotiations, the committee chooses to communicate unconstructively through the media."

The finance ministry said it "is determined to negotiate with the debtholders in a process which fully respects the commonly accepted principles of transparency, responsiveness and good faith."

Ukraine's Western-oriented government has found itself under mounting economic pressure.

A pro-Russian rebellion and a cut in trade relations with Russia has pummelled the economy, which was already dragging due to years of corruption and mismanagement under pro-Moscow leaders.

The World Bank estimates Ukraine's recession will grow worse this year, with the economy contracting by 7.5 percent.

The crisis has sent the value of the national currency, the hryvna, plummeting in value. This has in turn sent the value of the country's debt, much of which was in dollars, skyrocketing in terms of the nation's economy.

At 40.6 percent of the national output in 2013, it is expected to hit a high 94 percent of the economy this year according to the IMF.

To continue lending to nations in difficulty the IMF insists that their debt level is sustainable.

Ukraine received the first $5 billion under the rescue programme in March.

The state-owned rail operator said Tuesday it could no longer make payments and called for a restructuring of $1.5 billion in debts.