Ukraine says it can’t pay off debt to Russian Federation

Dec 18, 2015

President Vladimir Putin on Wednesday signed a decree suspending Russia’s free-trade agreement with Ukraine as of January 1, the same day Kiev is set to enter a similar trade deal with Brussels, AFP reported.

At this, the ministry stressed it hoped for further assistance of the International Monetary Fund and continuation of cooperation with the Fund.

Ukraine has included the two-year bond in the external commercial debt it is restructuring to shore up its war-torn economy.

Poroshenko also urged the European Union: to extend the life of economic sanctions on Russia; grant Ukraine visa-free travel in 2016; and to reconsider building Nord Stream II, a Russia-Germany gas pipeline bypassing Ukraine, which would cost it another $2 billion a year in lost transit fees.

“The holders of the December 2015 eurobonds decided not to participate in the debt exchange which was accepted by all of Ukraine’s other bondholders”.

“A stance voiced by the Ukraine Finance Ministry is, in all probability, closing an opportunity for restructuring this debt and is evident of Ukraine’s inability to meet its commitments”.

“We are ready to pay this price for our freedom and our European choice”, Poroshenko said during talks in Brussels after the announcement by Russian President Vladimir Putin.

Russia has staunchly opposed the EU-Ukraine free commerce pact, saying it might result in a flood of European imports throughout its personal borders and injury the competitiveness of Russian exports to Ukraine. Moscow has repeatedly stated that Kiev’s inability to pay back the debt by December 20 will mean a default.

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 support [Ukrainian President Petro] Poroshenko’s approach – exchange all for all”, he said.

He said foreign investors in Ukraine are not likely to be affected “because you can count them on one hand as it is”.

Ukraine to halt trade with Crimea by mid-January


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