Poroshenko issues indefinite moratorium on payment of 'Yanukovych's debt'

The President of Ukraine, Petro Poroshenko, signed the law adopted by the Verkhovna Rada of Ukraine that placed an indefinite moratorium on the repayment of Eurobonds on the loan provided by Russia to Ukraine in December 2013.

The corresponding law amending Article 4 of the Law of Ukraine “On specific features of dealing with sovereign and local debt guaranteed by the state” was signed by the President on the 29th of April.

The law excluded a phrase "and will remain in force until the 1st of July 2016" from the paragraph 1 of Article 4, having made the law indefinite. On the 18th of December 2015, the Cabinet of Ministers of Ukraine approved a moratorium on the repayment of the $3 billion debt to Russia.

The Ministry of Finance of Ukraine stated that they agree to start negotiations in order to reach mutual agreement concerning the restructuring of the debt on Eurobonds that matured in December 2015. Ukraine received the loan of $3 billion from Russia under then President Viktor Yanukovich in December 2013.

Kiev insisted on the recognition of the debt as a commercial debt with its subsequent restructuring and write-off of part of the debt. Russia refused to restructure on terms established by the private creditors of Ukraine and demanded recognition of it as a sovereign debt.

On the 16th of December 2015, the IMF Board of Directors recognized the official status of the Russian loan. On the 17th of February 2016, Russia filed a lawsuit in a London Court against Ukraine over the $3 billion debt.

  Ukraine, Russia, Poroshenko, debt