By Eoin Drea* – POLITICO
Brave and economically ravaged Ukraine needs a debt deal to win the coming peace — and grants rather than loans
European leaders haven’t been shy about trumpeting their €18 billion in loans to Ukraine in 2023 as a tool for“maintain[ing] the macro-financial stability of the country.”For European Council President Charles Michel, such aid shows that Brussels is “very committed to supporting Ukraine as much as we can.”
However, as the war rages and pressure on Ukraine’s economy mounts, basic economics — and centuries of history — paint a much less optimistic portrait of the real impact of Europe’s financial support.
Letters: Yesterday Argentina, today Greece, and tomorrow perhaps France as well: any indebted country can be blocked from restructuring its debt in spite of all common sense;
letter by famous economists like Piketty
Paul Krugman draws attention to the role of exchange rates in the Russian debt. I'd add a few notes on this in addition to yesterday's overview. External Debt Was Cheap For two reasons: QEs and zero interest rates made the dollar and the euro very attractive currencies for borrowing. The ruble appreciated in nominal terms, while…