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Ukraine finance minister hopes to settle debt dispute with Russia off court

December 18, 2015, 21:35 UTC+3
"Ukraine is doing everything it can to match the IMF program. I hope we will succeed in reaching an agreement with Russia before trial," Ukraine’s Finance Minister Natalie Jaresko says
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© ITAR-TASS/Maxim Nikitin

MOSCOW, December 18 /TASS/. Ukraine’s Finance Minister Natalie Jaresko told Bloomberg TV on Friday that she hoped for settling the debt dispute with Russia off court.

"Ukraine is doing everything it can to match the IMF program. I hope we will succeed in reaching an agreement with Russia before trial," she said.

December 20 is the final deadline for Ukraine. Earlier on Friday, the Ukrainian government announced a moratorium on paying the debt to Russia.

"Ukraine has officially acknowledged its default. Russia is going to demand the return of 3 billion dollars in court," Kremlin Spokesman Dmitry Peskov told journalists on Friday in connection with Ukraine’s decision.

"It may be said that the Ukrainian side officially acknowledged its default after announcing a moratorium on paying this sovereign debt. It means the acknowledgement of a default situation," Peskov said.

According to him, the court option is the most probable way for Russia to get its money back.

The Ukrainian government has also imposed a moratorium on paying $507 million, which two Ukrainian companies are owing to Russian banks.

For his part, Russian Deputy Finance Minister Sergey Storchak said that Ukraine had no chance to win a trial vs. Russia over the $3 billion credit.

"When the fact of non-payment is easily established by a British court, it will mean a very quick and concrete procedure of making the final decision. In this sense, the Ukrainian colleagues, who are potential litigators, stand no chance to win the trial," Storchak explained.

In December 2013, the presidents of Russia and Ukraine, Vladimir Putin and Viktor Yanukovych, agreed that Moscow would issue a 15-billion-dollar credit to Kiev by placing Ukrainian securities. Under that agreement, Ukraine placed its securities worth $3 billion at the Irish Stock Exchange on December 20, 2013. Russia used the money from its National Welfare Fund to purchase the securities.

Later, Ukraine tried to argue the loan’s status and equalize it to a commercial credit subject to restructuring. Russia disagreed with that approach.

In November 2015, Russian President Vladimir Putin said Russia was ready to restructure Ukraine’s debt in case the United States, the European Union or a major international financial institution provided guarantees to Russia. No guarantees have been received.

On December 17, the International Monetary Fund (IMF) confirmed the official status of Ukraine’s $3 billion debt to Russia.

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