Russian PM: Kyiv won’t repay debt because ‘they are crooks’
His comments came the same day that Secretary of State John Kerry said that he would be traveling to Moscow in the coming days to discuss the situation in Syria and Ukraine with Russian President Vladimir Putin and Foreign Minister Sergey Lavrov.
On the debt repayment, Putin ordered to “take them (Ukrainians) to court then”, according to an online Kremlin transcript of the president’s meeting with government officials.
The Kremlin reacted sharply after the Washington-based Fund announced it was changing its lending rules to allow it to continue supporting countries if they fail to repay official creditors, a change that would help Ukraine if it misses payment on the Moscow-held Eurobond, falling due on December 20. Russian Federation bought $3 billion worth in December 20, 2013, and the debt is supposed to be repaid by December 20, 2015.
But in an unexpected move, President Vladimir Putin offered a restructuring deal last month that would allow Ukraine annual repayments of $1 billion for the next three years, starting in 2016.
But Ukraine wants the bond to be restructured under an agreement reached with its commercial creditors that would write down the principal of the debt.
Until now, the International Monetary Fund could not provide financing to a member country that was in arrears to an official creditor, such as a government.
“We won’t put up with this”. Its war-torn economy is expected to shrink 12 percent this year with a budget deficit of 4.1 percent of gross domestic product.
Medvedev said that nobody believes in Ukraine’s solvency.
“There are nearly no chances that we will agree”, said Medvedev. “We will seek a default on the loan. They washed their hands and said – let it pay on its own”.
Ukrainian Prime Minister Arseny Yatsenyuk on Wednesday remained defiant saying the country was ready to fight back if Moscow took legal action. “We will fight for a default on all Ukraine loans”.
“Our restructuring plan remains on the table”.
Following Russia’s annexation of Crimea previous year, Hodges said Russia maintains a force of approximately 25,000 troops there, and said that while he did not see any imminent offensive on eastern Ukraine by the Russian military, they still maintain a capability in the region to mount an offensive on “short notice”.