Saturday, May 23, 2015

Russia Says Ukraine Debt Repayment Law Amounts To Default


Thu., May 21, 2015
Russia on Wednesday demanded the timely repayment of all debts owed to it by Ukraine and accused Kiev of effectively preparing the way for default with a new law. It threatened to take the issue to international courts if necessary. The law, approved by Ukraine's parliament on Tuesday, gives the government the right to miss payments to its international creditors as it wrangles over the terms for restructuring $23 billion worth of foreign debt. Russia holds a $3 billion Ukrainian Eurobond whose full repayment is due by the end of the year. Moscow, whose relations with Kiev have been wrecked by a year-long conflict in eastern Ukraine, has declined to join the debt restructuring talks. President Vladimir Putin, speaking at a meeting with government ministers, said he found the new law "strange". "To effectively announce an impending default shows a poor level of professional responsibility, all things considered," said Putin, noting that the International Monetary Fund does not lend to countries in default. Ukraine, its economy battered by recession and rampant graft as well as by the conflict in the east, hopes to secure the next tranche of a $17.5 billion bailout programme with the IMF this summer to shore up its foreign currency reserves.

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