EU Ambassadors Extend Economic Sanctions On Russia By Six Months
The moratorium means that Ukraine is likely to default on the debt, which is due on Sunday.
Kyiv’s decision to declare a moratorium on its debt to Russia does not cancel its obligation to repay the loan, Russian Finance Minister Anton Siluanov said Saturday.
On Twitter, he added: “From now on payments of debts for the Russian Federation [will] stop, [until] the adoption of our proposals on restructuring, or [a] judicial decision”.
Mr. Yatsenyuk said at a government meeting on December 16 that Ukraine’s Cabinet of Ministers had decided that “the supplying of goods, work and services to Crimea and from Crimea” will be banned within 30 days. The fact that Ukraine failed to pay back $3 billion plus $75 million of loan interest should be officially recognized upon expiry of a 10-day grace period after the payment deadline.
It followed the overthrow of a Moscow-allied president in Kyiv and Russia’s annexation of the Crimean peninsula from Ukraine in what grew to be the biggest spat between Moscow and the West since the Cold War.
The dispute is further complicated by fears that Ukraine is heading for a wider default after the parliament rejected a new tax code and the draft 2016 budget, both considered essential elements of the restructuring demanded by the International Monetary Fund as the price of its loan. That involved a 20 percent write-down of bond holdings, which cut Ukraine’s sovereign debt from $19 billion to $15.5 billion.
Russian President Vladimir Putin
“Ukraine remains committed…to negotiating in good faith a consensual restructuring of the December 2015 Eurobonds”, it said in a statement.
“We proceed from only one thing, which is we can not abandon the people who live in the southeast of the country to nationalists to eat them up”, Putin told the state-run Rossia television network.
The default “is just confirmation of the unimproved relations between the countries”, said Simon Quijano-Evans, the London-based chief emerging-market strategist at Commerzbank.
But many of Kyiv’s government troops which are battling the insurgents also speak Russian, belying Moscow’s claim.
Ukraine’s President Petro Poroshenko interpreted the comment as an admission of Russia’s military involvement.