Fitch Ratings, a major U.S. credit-rating agency, has just downgraded Ukraine’s credit rating to ‘restricted default.’ This decision came after Ukraine missed a crucial payment deadline on a $750 million Eurobond that was due on August 1, 2023. The country had a ten-day grace period to make the payment, but when that expired with no payment made, Fitch dropped the rating to ‘D’ from ‘C,’ signaling severe financial trouble.

Ukraine’s government recently passed a law allowing them to tempo...