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Ukraine Declines To Pay $3 Billion Debt To Russia: PM Arseniy Yatsenyuk
“We are prepared for court action from the Russian side”.
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Ukraine is also set to cancel payments on $507 million of Ukrainian commercial debt held by Russian banks, according to the prime minister. Payments are frozen “until our propositions on restructuring are accepted or until a relevant court decision is made”, he said.
“We propose postponing the government’s tax code until the first quarter of the next year, so that it will be implemented by 2017”, said Yuriy Lutsenko, the head of the party.
The moratorium does not affect Ukraine’s obligation to repay the debt.
Kiev has refused to meet Sunday’s due date on a $3 billion (€2.77 billion) loan that Moscow gave to authorities led by former Ukrainian president Viktor Yanukovich in December 2013, when they were rocked by huge street protests.
Ukraine has insisted that the loan should be considered private and should, therefore, be exempt from the International Monetary Fund’s rules that require Kiev to make good on its sovereign debt as part of its IMF bailout package, which the country desperately needs to overhaul its struggling economy.
Many – including the president of Ukraine and the head of North Atlantic Treaty Organisation – interpreted Putin’s words as effectively an acknowledgement that Russia did send regular troops across the border to buttress Russian-speaking rebels in eastern Ukraine, a claim the Kremlin has always denied.
Diplomats say European Union states have agreed to extend sanctions on Russian Federation for another six months from Monday, due to its continuing failure to fulfil a deal aimed at ending an 18-month conflict in eastern Ukraine that has killed more than 9,000 people.
“Russia has refused, despite our repeated attempts to sign the agreement for restructuring, to accept our proposals”, Yatsenyuk said during the Friday speech. That deal involves a 20 percent write-down of bond holdings, which cut Ukraine’s sovereign debt from $19 billion to $15.5 billion.
William Jackson, an emerging markets analyst at Capital Economics, said the implications of the moratorium were unclear.
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“It’s not hard to envisage any debt talks breaking down”, added Jackson.