"Mikhail, our total national debt is only one hundred billion US dollars. The government's goal is to pay off our debts as soon as possible, but now you want to issue two hundred billion in new government bonds all at once. Will we really be able to repay that in the future?"
One committee member asked anxiously.
Many of Russia's debts had been "inherited" from the Former Soviet Union era. Most creditors were members of the Paris Club and London Club—in other words, European investors.
Whether for the sake of appearances or national credibility, even during the hardest economic years, Russia had gritted its teeth and repaid its debts, unwilling to default.
Once a country defaulted on its sovereign debt, it was tantamount to its international reputation going bankrupt. The consequences would be severe...
Thus, several successive governments had all aimed to clear the country's debts.
But now, before the old debts had even been repaid, Wang Ye wanted to issue another two hundred billion US dollars in new debt!
Naturally, many committee members felt immense pressure and worried that the debt issuance plan would fail.
They feared no one would be willing to buy the new bonds, and they also worried that the debt could not be repaid later.
Since this new bond plan had been led by the Economic Committee, if something went wrong, they would be unable to shake the blame. Wouldn't that severely damage the committee's reputation?
Wang Ye smiled faintly. Since he had dared to put forward this plan, he had naturally considered every aspect of it.
He patiently explained to the committee members present:
"When it comes to issuing debt, we need to look at it from different angles.
Some countries are impoverished and can only survive by borrowing money. Naturally, such sovereign bonds