Ukraine imposes moratorium on repaying $3 billion Russian bond: PM
Ukraine has imposed a moratorium on repayments of its multi-billion debts to Russia, Ukrainian Prime Minister Arseny Yatsenuk announced here on Friday.
Ukraine’s economy has struggled over the past few years and the country has negotiated repayment terms with creditors, but not with Russian Federation.
He said the IMF’s recent concerns about the Ukrainian parliament’s decision to reject a proposed budget for the next year and a new tax code could indicate a “growing risk that the country’s bailout could be put on hold”.
Moscow and Kyiv have been locked in a bitter showdown over a Russian $3 billion loan granted to the pro-Moscow regime of ex-president Viktor Yanukovych in December 2013, not long before he was ousted and fled to Russia. Moscow claims Russian speakers are persecuted in Ukraine, and said a year ago, during the annexation of Crimea, that it sought to protect Russians and to support the drive of separatist insurgents in Ukraine’s southeast.
Ukraine said it is “ready to pay the price” to join an European Union free trade zone from that date.
Ukraine’s finance ministry sounded a more conciliatory note than Yatseniuk, saying in a statement: “Ukraine remains committed…to negotiating in good faith a consensual restructuring of the December 2015 Eurobonds”. Ukraine has a 10-day grace period before it is considered to be in default.
“Our Ukrainian colleagues have no chance of winning this case”, Russian Deputy Finance Minister Sergey Storchak told state television on Friday. The two sides indicated this month that they were open to negotiations to restructure the debt and have been using German officials to mediate indirect talks.
Heated debates at the Verkhovna Rada in Kyiv have in the past spilled over into scuffles. That increase came on Wednesday, when the Fed said it would raise its short-term interest rates by a quarter of a percentage point.
After the International Monetary Fund changed its rule on debt this month to make it possible to provide funding to a country that is in arrears to an official creditor, Kyiv is more confident that the disagreement with Moscow poses no risks to its aid plan. Ukraine has said it has no intention to replay it.
But during his annual news conference on Thursday, Putin conceded there were “people involved in solving certain issues, including in the military sphere” in eastern Ukraine. “Our accountants must not hang themselves on January 1”.
