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Expert: Ukrainian PM reloads debt problem to next cabinet as he refuses to pay to Russia

December 09, 2015, 21:57 UTC+3 KIEV
Head of the Institute of Analysis and Management believes that's a tactical task for the government that doesn't have the monies to pay the debt and the penalties
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© Stepan Petrenko/TASS

KIEV, December 9. /TASS/. Ukraine will have to repay its $ 3 billion debt to Russia in any event but this repayment will be the headache for the next cabinet, as the incumbent cabinet led by Prime Minister Arseniy Yatsenyuk is simply reloading the burden of this debt to the shoulders of its successors, Ruslan Bortnik, the director of the Institute of Analysis and Management told TASS.

"This debt will be paid off but after court hearings and not by the cabinet of (Prime Minister) Arseniy Yatsenyuk and (Finance Minister) Natalie Jaresko," Bortnik said. "Quite possibly, that's a tactical task for the government that doesn't have the monies to pay the debt and thus the burden of the indebtedness and the penalties, which may be awarded by the court for non-payment, is relegated to a future economic period and to a future cabinet," he said.

President Vladimir Putin of Russia and Viktor Yanukovych of Ukraine reached agreement in December 2013 on Moscow's loan of $ 15 billion to Kiev through the floating of Ukraine's bonds. As part of the program, the bonds worth $ 3 billion were placed on the Irish Stock Exchange on December 20, 2013, and bought up by Russia.

Moscow allocated monies from the National Affluence Fund for the purpose.

Ukraine made the last coupon payments in June 2015. Now Russia expects a full repayment of the loan.

President Vladimir Putin said at the G20 summit in Turkey Moscow had offered repayment by installments of $ 1 billion a year in the years 2016 to 2018.

"Since our partners are confident the creditworthiness of the Ukrainian state will be growing and we don't have any grounds for doubts over getting we'll get $ 3 billion already next year, our partners shouldn't have any fears about issuing guarantees in connection with the loan," he said.

Putin added Russia had asked for guarantees from the US or the EU or an international financial institute.

Russian Prime Minister Dmitry Medvedev said on Wednesday Ukrainian leaders were ‘scammers’ in the context of Kiev’s refusal to pay the debt.

"Hope dies last but I have a misgiving we won’t get the debt back because they are scammers," he said.

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