Russian media outlet Radio Sputnik quoted economist Sergei Tolkachov, who stated that in new debt agreements with the EU, the collateral value of Ukrainian land will be lowered due to “increased risks.”
Tolkachov mentioned land while commenting on Ukraine’s debt restructuring negotiations. In his opinion, it is unlikely that Ukraine will announce default in August.
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“As a result of agreements between Kyiv and the EU, collateral assets for already issued and unpaid loans and for new loans replacing old ones will be reviewed… The most valuable collateral remains natural resources, land, and minerals,” he said.
This is not true for two reasons.
Ukraine is currently negotiating private debt that has nothing to do with the European Union.
The country requested new conditions of payment and has presented two options for a $20 billion Eurobond debt restructuring for creditors, which include Amundi, BlackRock, and Amia Capital, according to Bloomberg. These are primarily American investment funds.
The debt Ukraine owns to the European Union is sovereign debt, and there is no need to negotiate it.
Another falsehood regarding Ukraine’s debt negotiations mentioned by the Russian economist is that land, natural resources, or minerals are “collateral assets” for these agreements.
This is untrue due to the nature of securities such as bonds. They are fully cash-anchored since the country issues them for internal and external investors – they buy them for cash, and the country pledges to return the money with interest.
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No other assets participate in the process. This applies not only to Ukraine’s securities but also to US Treasuries or bonds issued by other countries.
This is why it is also impossible to “lower the price” of land since its price is not connected to bonds, and Ukraine does not have a mature stock exchange to create any financial instrument anchored to the price of land. Not to mention that this is an independent market.
The “sale of land in Ukraine” is one of the eleven narratives spread by Russian disinformation channels, according to Grunt.media.
The Russian media outlet Baltnews even named a specific beneficiary once, claiming that the assets would be bought by the international investment company BlackRock – the very same BlackRock now negotiating a new debt agreement with Ukraine.
The assumption is based on signing a memorandum between BlackRock and the Ministry of Economy, although the document refers only to consultations.
Russian media have a track record of spreading fear that corporations will massively buy land in Ukraine. But the volume of land sales in Ukraine has declined since the beginning of the full-scale invasion, KSE Agrocenter researcher Roman Neiter told Grunt.media.
Other narratives that Russian media use to spread fear and misinformation include:
- Ukraine’s bankruptcy and inability to repay all its debt forever,
- abandoning wages for the vulnerable,
- hopeless situation of Ukraine’s economy without any plan to get better,
- artificial overvaluation of the hryvnia exchange rate and the purchase of currency from Ukrainians,
- using the salaries of the military to repay the country’s sovereign debt,
- selling electricity abroad and forcing Ukrainians to live without it,
- selling state property and land to Western companies for nothing,
- a collapse of the economy without Western aid,
- profits state officials get from economic weakening,
- “stable times” under corrupted ex-president Viktor Yanukovych.
While not all of these narratives are entirely false, Russian media deliberately frames them in a way to suggest that Ukraine is a failed state and is not working on solutions to sustain itself.
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