Ukraine Declines To Pay $3 Billion Debt To Russia: PM Arseniy Yatsenyuk
“Russia acknowledges yesterday’s decision of Kyiv to announce a moratorium to settle the debt to Russian Federation”, he said.
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.
Prime Minister Arseniy Yatsenyuk said Kyiv is imposing a moratorium on the note due December 20, which Russian President Vladimir Putin bought two years ago as part of an abortive bailout for Ukraine’s former leader just months before he was toppled. “We are prepared for court action from the Russian side”, Yatsenyuk said.
The IMF this week agreed with Moscow that the bond consists of an official loan.
The loan repayment is due on Sunday but Ukraine has another 10 days from then to sign a deal before an official default is triggered, but after an eleventh hour attempt by Germany to broker a deal failed, the two sides appeared on a collision course.
Alongside the sovereign debt, the Ukrainian government has chose to put on hold the repayment of a combined debt of $507 million that two Ukrainian state-owned enterprises owe to Russian banks. Payments are frozen “until our proposals on restructuring are accepted or until a relevant court decision is made”, he said. Moscow said it would file a lawsuit against Kyiv to the worldwide court if the payments were not met. “And in this case problems will emerge for many creditors who gave money to Ukraine and continue to do it”.
He again stressed that the people mentioned were volunteers and it was wrong to describe them as “Russian military specialists“.
Kyiv’s move to impose a ban on debt repayments came as a total surprise as on Thursday the country’s Finance Ministry said it was committed to a dialogue with Moscow over a possible credit relief deal.
The fund meanwhile expressed concerns Friday over parliament’s rejection this week of a draft budget for next year and a new tax code, saying that a balanced budget is a “key condition” for funding and deviating from it would “inevitably disrupt the associated global financing”.
“It’s not hard to envisage any debt talks breaking down”, added Jackson.
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