Opposition slams govt. over domestic debt restructuring

Expressing strong opposition to the proposed domestic debt restructuring programme announced by the government, Prof. G. L. Peiris, MP, yesterday (26) accused the Wickremesinghe-Rajapaksa administration of being insensitive and irresponsible in addressing the issue.

Instead of working on a social security net to protect the needy, the government was taking a dangerous path that would cause further deterioration of public life, the former External Affairs Minister alleged. He said so while addressing the weekly media briefing at the Nidahasa Janatha Sabhawa Office at Nawala.

Prof. Peiris warned of the negative impact the domestic debt restructuring process could have on the local banking sector, both public and private, at a time the country was struggling to come to terms with the disgraceful bankruptcy status.

Prof. Peiris said that the government had sought to downplay the developing crisis by calling the debt restructuring domestic debt optimisation. The declaration of a five-day bank holiday from Thursday 29 June to Tuesday, 04 July, the closure of the Colombo Stock Exchange on Friday and the summoning of Parliament over the coming weekend underscored the gravity of the situation, he added.

Prof. Peiris warned that debt restructuring could cause massive losses to the EPF and the ETF as they had invested heavily in Treasury Bills and Treasury Bonds. The former minister estimated the total EPF and ETF investments at 85 percent of their total assets.

Opposition MP Patali Champika Ranawaka claimed that the government intended to announce both foreign and domestic debt restructuring programmes on 28 June. The SJB MP who recently established ‘Eksath Janaraja Peramuna’ said that the government was required to finalise agreements with all its creditors before September.

Ranawaka said that the country was heading for a massive crisis as the debt restructuring programme would affect all and the impact on state banks would be devastating.

Opposition MPs pointed out that the government had repeatedly assured that domestic debt wouldn’t be restructured until very recently. (SF)