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US, EU realise Ukraine nears default — source at Russia’s Finance Ministry

December 05, 2015, 23:49 UTC+3 MOSCOW
Earlier in the day, the Finance Ministry said that it had received an official refusal from the U.S. government over loan guarantees to Ukraine
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MOSCOW, December 5. /TASS/. Western countries realise clearly that Ukraine is nearing bankruptcy, an official at Russia’s Finance Ministry told TASS on Saturday in comments on U.S. refusal to provide guarantees on Ukraine’s state debt.

"The European partners are likely to voice a similar position soon," he said. "What does that approach mean? Only one thing - both the United States and Europe realise clearly that Ukraine is nearing bankruptcy and so they are not eager to shoulder its liabilities."

Earlier in the day, the Finance Ministry said that it had received an official refusal from the U.S. government over loan guarantees to Ukraine. Along with this, the ministry said Russia was set to file a lawsuit against Ukraine if Kiev failed to repay the $3-billion debt on December 20.

"This week, we received an official refusal from the U.S. government to provide loan guarantees to Ukraine," the ministry said in a statement. "Therefore, we have nothing to do but to file a lawsuit against Ukraine if the borrower fails to fulfil its liabilities in full on December 20, 2015, which will mean Ukraine’s sovereign default."

In December 2013, the presidents of Russia and Ukraine, Vladimir Putin and Viktor Yanukovych agreed that Moscow would grant Kiev a credit worth $15 billion through the placement of Ukrainian securities. Under this program bonds for 3 billion dollars were placed on the Irish Stock Exchange on December 20, 2013. Russia purchased the bonds using the funds from its National Welfare Fund.

Finance Minister Anton Siluanov said Russia's proposal to restructure the debt of Ukraine will help the IMF avoid creation of a precedent when the order of providing financial aid by the institution must be changed. After Kiev had reached agreements on debt restructuring with all but for Russia, Siluanov reiterated that Moscow was ready to sue Ukraine at international arbitrary courts and at the IMF as well in case Kiev failed to repay its debt in December.

In November, speaking on the G20 summit in Turkey, President Vladimir Putin said that Russia had offered Ukraine to repay its $3 billion debt by $1 billion annual instalments in 2016-2018. Putin stressed that Russian not only offered the restructuring but also the terms which are better than those that were asked by the IMF.

Last time Ukraine made bond interest payments in June 2015.

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