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Russia expects Ukraine's $3 bln debt payment

December 21, 2015, 10:59 UTC+3 MOSCOW
If there is no payment on Monday December 21, on December 31 Russia will appeal to the international court
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© Alexandr Demyanchuk/TASS

MOSCOW, December 21. /TASS/. On Monday Russia expects a debt payment from Ukraine in the amount of $3 bln that was received in December 2013. Last Friday, Ukraine’s decision to impose moratorium on payment of its debt to Russia is virtually a default, although the moratorium does not affect Ukraine’s obligations to repay debt and Russia continues to expect it to be executed in full. If there is no payment on Monday, on December 31 Russia will appeal to the international court.

In December 2013, Russian President Vladimir Putin and the then Ukrainian President Viktor Yanukovych reached an agreement that Moscow would extend a $15 bln loan to Kiev through placing Ukrainian securities.

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 installments 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.

Putin added that Russia had asked for guarantees on Ukraine’s debt from either the United States government or from the European Union, or from one of the international financial institutions.

On Thursday, December 17, the Ministry of Finance of Ukraine said that the Government of Ukraine was ready for further negotiations to reach agreement on the restructuring of the Russian debt.

"Ukraine agrees to negotiate in good faith to reach mutual agreement on restructuring the debt on the bonds, maturing in December 2015," the statement said.

According to Kiev, "achieving this agreement will allow Ukraine to continue to meet the financial targets agreed with the IMF under the mechanism of extended financial aid with the simultaneous performance of its contractual obligations to other bondholders of Ukraine.

The Ministry added that Ukraine cannot repay Russian Eurobonds without breaking the primary conditions of the loan.

"Eurobonds maturing in December 2015, irrespective of their status, are debt obligations of Ukraine, which the country cannot repay in accordance with their original terms, while respecting the financial targets defined by the IMF’s mechanism of extended financial aid," according to the Ministry’s statement.

Later on Friday, December 18, Ukrainian Government imposed moratorium on payment of the Russian debt worth $3 bln. Ukrainian government also imposed moratorium on the payment of $507 mln by 2 Ukrainian companies to Russian banks.

According to Russia’s Economic Development Minister Alexey Ulyukayev, Ukraine’s decision to impose moratorium on payment of its debt to Russia is virtually a default announcement though it will not influence Russia’s position in talks on Ukraine-EU association.

"Moratorium aka default… Of course not, those are different things," he said when answering the question whether the decision will change Russia’s negotiating position.

On Monday, December 21, the next ministerial meeting within trilateral consultations between Russia, Ukraine and the European Union is planned to be held in Brussels where practical solutions to Russia’s concerns over implementation of the trade and economic part of the Agreement of Ukraine-EU association in various spheres will be discussed.

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