Russian PM: Kyiv won’t repay debt because ‘they are crooks’
Siluanov said Ukraine had 10 days after the Eurobond falls due on December 20 to either repay the $3 billion or accept Putin’s restructuring proposal for the debt to be paid back in $1 billion installments, backed by Western guarantees, over three years.
“Go ahead, take it to court”, Putin told Finance Minister Anton Siluanov at a government meeting while discussing the loan given to former Kremlin-backed president Viktor Yanukovych in 2013, which must be repaid this month. Defaulting on the Eurobond, which matures on December 20, could have put the program at risk. The IMF accepted to date Arrears on private creditors, but not for States. “It’s taken exclusively to the detriment of Russian Federation and in order to legalise Kyiv not repaying its debts”.
Prime Minister Dmitry Medvedev accused the IMF of meddling and said the Fund’s decision had no legal basis but had been taken for political reasons.
In response to Russia’s statements, Ukrainian Prime Minister Arseniy Yatsenyuk said Kyiv is “ready to pursue in court fully armed”, reiterating that no other terms would be provided to Moscow than the agreement reached in August between Ukraine and its other worldwide creditors.
The International Monetary Fund will change its lending rules to allow it to keep supporting countries if they fail to repay official creditors, a move that would help Ukraine if it misses payments on a $3 billion (£2 billion) debt to Russian Federation.
Russia’s finance minister immediately criticized the decision.
“The precedent for us is absolutely not acceptable, and the main thing is that it is quite risky because we have created a unsafe precedent for permitting the non-payment of sovereign debts”.
During Wednesday’s meeting, Putin also asked Economic Development Minister Alexei Ulyukayev to continue trilateral consultations with Ukraine and the European Union on Kyiv’s free trade regime with the EU. “We are preparing documents for a court appeal”, he said.
He warned that Russia’s privileged trade regime with Ukraine will end, in particular with tariffs to be raised for different categories of goods from 3 to 9 percent, or 6 percent on average.