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UKRAINE’S
DEFAULT NOW
HOURS AWAY
Ukraine
has until January 1 to repay its $3 billion debt to Russia to avoid a
default.
©
REUTERS/ Valentyn Ogirenko
1
January, 2016
Originally
appeared at Sputniknews
The
Russian Finance Ministry announced on Wednesday that Ukraine’s
formal default would occur on December 31 after the
expiration of the 10-day “grace” period, during which
Kiev was still able to make a payment.
If
Ukraine fails to make payments under the Eurobonds Russia
bought in late 2013, Moscow warned it would bring the matter
before an international arbitration court.
The
Ukrainian Eurobonds matured on December 20, but Ukraine had
a 10-day grace period before it would be considered to be
in default.
Meanwhile,
on Wednesday the Ukrainian government confirmed its decision
to impose a moratorium on the payment of the $3
billion it owes to the Russian Federation.
It
argued that Russia, just like private holders of other
Ukrainian bonds, should restructure the debt and partially write it
off.
Russia
insisted on the sovereign nature of the Ukrainian debt and
said it was ready to give Kiev an additional three years
to repay it.
On
December 17 the executive board of the International Monetary
Fund recognized Ukraine’s $3 billion debt to Russia
as official and sovereign – a status Kiev has been attempting
to contest.
On
December 18, Ukraine announced a moratorium on any payments
of the Russian debt. This moratorium also encompasses Ukraine’s
sovereign-guaranteed loans for Ukravtodor and Yuzhnoye owed
to Russian banks.
The
total debt subject to the moratorium exceeds $3.58 billion.
In
a conciliatory move, Russia’s Finance Minister Anton Siluanov said
that Moscow was still ready to resolve the matter amicably.
The
Ukrainian side dug its heels though with Prime Minister Arseniy
Yatsenyuk saying that Ukraine was ready for a legal showdown and
that there were no debt repayment provisions in the country’s
2016 budget
Russia to sue Ukraine over $3 bn debt
Russia's
finance ministry said Friday it was suing Ukraine for defaulting on a
$3-billion debt to Moscow, following an order by President Vladimir
Putin.
"Russia's
finance ministry (...) has initiated procedures required for an
immediate lawsuit against Ukraine," the statement said, adding
that the lawsuit would be heard in a British court.
Ukraine
announced last month it would not make the payment on its debt to
Moscow after Putin vowed to sue Kiev if it failed to pay by the end
of 2015.
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