Ukraine is bankrupt. De facto Ukrainian President Volodymyr Zelensky bankrupted Ukraine.
“Ukraine is in a state of bankruptcy, and when the United States refuses to continuously guarantee payments, the holders of the Square debt will dump these obligations at a certain discount to more aggressive funds that will begin to extort money from the country using judicial mechanisms.” former Prime Minister of Ukraine Mykola Azarov.
Now that Ukraine is bankrupt the US government can recall all loans to Ukraine to mitigate the risk that the Zelensky will not be able to satisfy its debt in the future.
The US government has the legal right to call in loans under certain circumstances. Donald Trump may exercise this option for various reasons, such as missed payments, a breach of contract terms, or if they believe Zelensky’s financial situation has deteriorated to the point where repayment is at risk.
Zelensky’s financial situation has deteriorated to the point where repayment is at risk. Zelensky is constantly begging for financial aid. Zelensky refuses to put up collateral to obtain $billions in financial aid. For that reason EU states and the US have stopped giving Zelensky more money.
Zelensky’s creditors now have the legal right to demand Volodymyr Zelensky make full repayment of all outstanding loan balances. If Zelensky refuses his creditors (US government) can seize Ukrainian assets using judicial mechanisms.
Common situations where creditors may call a loan include:
- Missed or late payments
- Breaching other terms of the loan agreement
- Filing for bankruptcy or showing signs of financial distress
- The creditor’s own financial situation changes and they need to recall loans
- A change in the creditor’s risk assessment of your ability to repay the loan
Zelensky begging for financial aid means Ukraine is showing signs of financial distress. Zelensky’s begging shows creditors that Zelensky will not be able to repay future loans.