Kremlin threatens Ukraine with court over $3 billion debt
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After the International Monetary Fund's change in intercountry money lending policies (in hopes of assisting Ukraine), Russia is left no choice but to begin a $3 billion retrieval process from Kiev. As reported by TASS, Anton Siluanov, Russia's Minister of Finance, has stated that the Russian Federation will exercise any means necessary to protect its rights as a creditor.
According to Siluanov, the IMF's decision in lifting the ban on lending to the countries with defaulting sovereign debt, was accepted at Russia's detriment. “The decision appears to be precipitated and preconceived. This decision was made in order to legalize possibility of Kiev not repaying their debts. These conditions have broken down years of development. Sovereign creditors have always been prioritized over the commercial ,” Siluanov stated.
He added that the IMF's offer to negotiate with Kiev on their sovereign debt as principles of commercial debt is unacceptable. EADaily reported that the IMF has lifted the ban on financial support to countries which have not yet paid off their sovereign debts. The IMF's decision will allow Ukraine (which owes Russia $3 billion), to receive additional loans under the implementation of an anti-crisis program. The IMF's Amendment of rules associated with lending, as adopted during their Executive Board meetings, allow the receiving of additional loans in cases where debts with prior creditors have not yet been settled.
Readers are reminded that the Ukrainian Minister of Finance, Natalia Yaresko, stated on December 8th that Kiev will most likely refuse the repayment of $3 billion to Russia. The debt's maturity expires on December 21. Yaresko said that Russia's request for debt repayment under instalment of Western guarantees contradicts the IMF's criteria on financial assistance to Ukraine.
In December of 2013, Russian President Vladimir Putin and former Ukrainian President Viktor Yanukovych agreed upon Moscow's loan of $15 billion to Ukraine through the placement of Ukrainian securities. Under this program, bonds equalling $3 billion were placed in the Irish Stock Exchange on December 20th, 2013 to be bought by Russia, using the Russian National Wealth Fund. Ukraine's last coupon payments on these bonds were made in June 2015. The complete loan repayment was expected in December of 2015.