Tweet
U.S.-BASED ARMENIAN THINK TANK SLAMS YEREVAN OVER EUROBOND ISSUANCE
ECONOMY | 25.03.15 | 10:37
Policy Forum Armenia (PFA), a Washington-based group of Armenian
economists, political scientists, journalists, legal experts and
others, considers the recent issuance of Eurobonds by Armenia's
Government "irresponsible" and "damaging for the country".
In a statement released on Tuesday, the PFA suggested that Armenia
needs economic reforms rather than issuance of expensive foreign debt,
something that it believes will result in "even bigger losses".
Last week, the Armenian government issued its second Eurobond worth
$500 million at a yield of 7.5 percent. The 10-year dollar bonds
were sold in international financial markets through Deutsche Bank,
HSBC and JP Morgan on Thursday.
In approving the measure in January the Cabinet led by Prime Minister
Hovik Abrahamyan cited the need to finance Armenia's budget deficit
and "neutralize" the Russian recession's spillover effects on the
Armenian economy.
But the PFA has criticized the Armenian government for the move and
its "desire to avoid policy changes".
"Deep reforms are needed to move Armenia's economy from an imminent
collapse. Issuing expensive foreign debt and attempting to pay one's
way out of the crisis will only delay the inevitable and result in
even bigger losses for consumers, banks, and the sovereign balance
sheet," the organization's Executive Board said.
The PFA, which is known to question the legitimacy of the current
Armenian government and alleges large-scale government corruption
in Armenia, also called on the international community and capital
market participants "to cease funding the regime in Yerevan".
"Future democratic governments of Armenia will have every reason
to declare these debts illegitimate and stop servicing them,"
it concluded.
The Armenian government carried out the first dollar bond issuance in
September 2013, raising $700 million at a yield of 6.25 percent. It
was then touted as a successful operation.
http://armenianow.com/economy/61737/armenia_eurobond_issuance_pfa
From: Baghdasarian
ECONOMY | 25.03.15 | 10:37
Policy Forum Armenia (PFA), a Washington-based group of Armenian
economists, political scientists, journalists, legal experts and
others, considers the recent issuance of Eurobonds by Armenia's
Government "irresponsible" and "damaging for the country".
In a statement released on Tuesday, the PFA suggested that Armenia
needs economic reforms rather than issuance of expensive foreign debt,
something that it believes will result in "even bigger losses".
Last week, the Armenian government issued its second Eurobond worth
$500 million at a yield of 7.5 percent. The 10-year dollar bonds
were sold in international financial markets through Deutsche Bank,
HSBC and JP Morgan on Thursday.
In approving the measure in January the Cabinet led by Prime Minister
Hovik Abrahamyan cited the need to finance Armenia's budget deficit
and "neutralize" the Russian recession's spillover effects on the
Armenian economy.
But the PFA has criticized the Armenian government for the move and
its "desire to avoid policy changes".
"Deep reforms are needed to move Armenia's economy from an imminent
collapse. Issuing expensive foreign debt and attempting to pay one's
way out of the crisis will only delay the inevitable and result in
even bigger losses for consumers, banks, and the sovereign balance
sheet," the organization's Executive Board said.
The PFA, which is known to question the legitimacy of the current
Armenian government and alleges large-scale government corruption
in Armenia, also called on the international community and capital
market participants "to cease funding the regime in Yerevan".
"Future democratic governments of Armenia will have every reason
to declare these debts illegitimate and stop servicing them,"
it concluded.
The Armenian government carried out the first dollar bond issuance in
September 2013, raising $700 million at a yield of 6.25 percent. It
was then touted as a successful operation.
http://armenianow.com/economy/61737/armenia_eurobond_issuance_pfa
From: Baghdasarian