“From today we are halting payments on this debt”, he said, essentially confirming that Kyiv will default on the bond when the Sunday payment deadline arrives.
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The December 2013 deal, which envisaged Moscow buying $15 billion worth of Ukrainian Eurobonds ($3 billion in the first tranche), was officially struck between Ukraine’s then-head of state President Viktor Yanukovich and President Vladimir Putin.
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“Only Ukraine won’t have privileges and preferences any longer”, Putin told his annual year-end press conference.
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Putin’s decree halts the 2011 agreement, citing “exceptional circumstances that impact Russia’s interests and economic security”.
Senior Russian officials said this month Moscow would probably have to penalise Ukrainian imports and impose a non-preferential trade regime if Kiev’s planned free trade pact with Europe went ahead on January 1.
Ukraine plans to join an European Union free trade zone from that date.
Speaking at a joint briefing with visiting Polish President Andrzej Duda, Poroshenko said that of the total funding, Warsaw pledged about $110 million for Ukraine’s border infrastructure improvement and agreed to open a $1.09 billion currency swap line to promote bilateral trade, Xinhua reported.
However, he added that the three parties will try to find a solution to the deadlock when they meet in Brussels next Monday.
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Relations between the two neighbors soured after Russian Federation annexed the Crimean peninsula in March 2014 and threw its backing behind separatist rebels in eastern Ukraine. “We’ve never said that there are no people deciding military issues in Ukraine, but this does not mean there are regular Russian troops there”.
