Ukraine threatens to file a lawsuit against Russia in connection with its $3 billion debt, which needs to be restructured by Moscow. Ukrainian Prime Minister Arseniy Yantsenyuk said his government is ready to file judicial proceedings against the Russian government if it does not agree to restructure the $3 billion debt on October 29.
During a press conference on Thursday, Prime Minister Yantsenyuk said, “We again ask Russia to decide whether they want to receive the same conditions as the other creditors, or they think they are unique. If they think they are unique, we are prepared for a court case against the Russian Federation. Russia will not be given any other conditions.” He urged the Russia to “join normal countries that made the decision to restructure [Kiev’s debt].
Private creditors hold majority of the Ukraine’s $19 billion worth of sovereign or sovereign-guaranteed debt. A creditor committee led by Franklin Templeton, which owns around $7 billion or Ukraine’s bond) signed a restructuring agreement, which reduced the country’s debt by approximately $3.6 billion.
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According to Ukraine’s Finance Ministry, the restructuring agreement included a 20% write-off and an extension of repayments.
Russia is not interested in restructuring Ukraine’s debt
Russia is not interested in restructuring Ukraine’s debt. Moscow repeated expressed its position and emphasized its intention to use the money for infrastructure projects in its territory.
Russian President Vladimir Putin and other t officials reiterated that they expect Ukraine to pay its $3 billion debt in full.
During a government meeting on Tuesday, Pres. Putin said, “They should return the money to us.” He added that the International Monetary Fund (IMF) could lend money to Ukraine to repay its debt to Russia.
“Why does the IMF not want to give another $3 billion to Ukraine so that it could pay off the debt? Why change the rules for a specific country, disturbing, in fact, the system itself and the rules of the IMF,” said Putin.
The Russian government insists that Ukraine’s debt is not to a private creditor, but to state. Currently, the IMF policy allows member states only to miss payments to private creditors. If the Ukraine government fails to repay Russia, there is a risk that it may not obtain the $17.5 billion loan from the international creditor.
Russia is preparing a plan of action once Ukraine misses its payment
Russian Finance Minister Anton Siluanov informed Pres. Putin that the IMF is preparing to change is policy to allow Ukraine to skip its payment to Moscow. Siluanov said, “It is clear that this is done exclusively to freeze payments to Russia.
According to the Russian Finance Minister, they are preparing a “plan of action” in case Ukraine fails to repay its debt in December. Siluanov said the plan included filing a lawsuit against the Ukrainian government.
Ukraine demands compensation from Russia over Crimea
Meanwhile, Ukraine is demanding Russia to pay a compensation of one trillion hryvnia ($46 billion) after losing Crimea. It is also accusing Moscow of creating confusion in Donbass.
In response, Russian Presidential Spokesperson Dmitry Peskov said, “Crimea is the territory of the Russian Federation. Donbass is the territory of Ukraine. How did they get that one trillion? It is not clear.” Once again, Peskov pointed out that Moscow will declare Ukraine in default if it fails to repay its $3 billion debt in full.