Ukraine Declines To Pay $3 Billion Debt To Russia: PM Arseniy Yatsenyuk
Ukraine’s Finance Minister Natalie Jaresko said the country was “committed to working in good faith to finding a resolution”, and that talks with the Russian side were continuing.
Prime Minister Arseny Yatseniuk said on Friday that Ukraine would not repay the Eurobond when it matures and that Kyiv was geared to fight the issue in court.
“The December 2015 Eurobonds constitute debt obligations which Ukraine can not pay in accordance with their initial terms”, the ministry said in a statement.
The moratorium will be in place “until the acceptance of our restructuring proposals or the adoption of the relevant court decision…”
The default comes after Russian Federation refused to participate in an $18bn restructuring with commercial creditors earlier this year, arguing it should receive better terms since it’s a sovereign lender.
Cash-strapped Kyiv is in dire need of further worldwide funding and was required by the IMF to restructure a total of 15.3 billion of debt to unlock the next installment of the 17.5 billion aid package.
“We propose postponing the government’s tax code until the first quarter of the next year, so that it will be implemented by 2017”, said Yuriy Lutsenko, the head of the party. On Thursday, Ukraine announced that it can not make the bond payment without violating a debt-restructuring deal with other global creditors.
Ukraine is about to default on a $3 billion loan and its creditor, Russia, says it is prepared to go to global court.
Still, William Jackson, a senior emerging markets economist at London-based Capital Economists consultancy, said Friday’s announcement “does feed into broader concerns that the country’s International Monetary Fund program is now at risk”.
Many – including the president of Ukraine and the head of North Atlantic Treaty Organisation – interpreted Putin’s words as effectively an acknowledgement that Russia did send regular troops across the border to buttress Russian-speaking rebels in eastern Ukraine, a claim the Kremlin has always denied.
“Any exchange has got to be an honest one: everyone for everyone”, he said, Meduza reports, saying he supported Ukrainian President Petro Poroshenko’s approach regarding a swap.