The Government has decided to impose a moratorium on payment of Russian debt. / Photo from UNIAN
The Cabinet of Ministers has confirmed its decision to impose a moratorium on the payment of debt to the Russian Federation in the amount of $3 billion, taken by the Yanukovych government in 2013, and in Dec 2015 recognized as official debt of Ukraine, said Prime Minister Arseniy Yatsenyuk during a Cabinet meeting.
"We have halted the Russian military aggression, and now we put a stop to the economic, financial and diplomatic aggression. The government has decided to impose a moratorium on the $3 billion that we had not taken. It was nothing but a bribe of the Kremlin to the former president for failure to sign the agreement on a free trade area with the European Union.” said Yatsenyuk. “The government has introduced a moratorium on the payment of $3 billion, and this is due to the fact that Russia refused to restructure these debts. The Kremlin will not get any other conditions but the ones offered to other creditors. Therefore, the moratorium will be introduced until the moment when Russia either accepts Ukraine’s offer, or there is a court ruling. We are fully prepared for legal war with Russia."
As UNIAN reported earlier, on December 16, 2015 the IMF Executive Board decided that the claim arising from the $3 billion eurobond issued by Ukraine on December 24, 2013 and held by Russia's National Wealth Fund is an official claim.
On December 17, Ukraine’s Finance Ministry said the country was not able to repay a $3 billion debt owed to the Russian Federation in accordance with its initial terms without violating the financing targets established under the Extended Fund Facility of the International Monetary Fund (IMF), Ukraine's key creditor, the Ukrainian Finance Ministry said in a statement posted on its website
On December 18, Ukraine announced a moratorium on any payments of the Russian debt, including payment of $3 billion borrowed under Viktor Yanukovych's presidency and which reaches maturity in December 2015. This moratorium also encompasses Ukraine`s sovereign-guaranteed loans for Ukravtodor and Yuzhnoye owed to the Russian banks.
Total debt subject to the moratorium exceeds $3.58 billion.
The Russian Finance Ministry noted formal default would occur on December 31 after expiration of the so-called "grace" period, during which Kyiv is still able to make a payment.
If Ukraine fails to make payments under the bonds in full within the grace period, the Russian Federation will seek to recover the funds owed, using appropriate legal mechanisms, Russia warned.