Peskov: Ukraine will be the default if the debt to Russia will not be repaid

Peskov: Ukraine will be the default if the debt to Russia will not be repaid

MOSCOW, December 8. The Kremlin warns that Ukraine will be the default if it does not repay the debt to Russia.

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© Of Mykhaylo palinchak/press service of President of Ukraine/TASS

The Minister of Finance of Ukraine admits the possibility of default in case of non-payment of a debt of Russia

“Further default situation, what we speak”, – told reporters the President’s press Secretary Dmitry Peskov.

“Russia offered the option of restructuring (debt), (Russian President Vladimir) Putin spoke in Antalya (on the summit) with this initiative”, – said the representative of the Kremlin. In his words, “with this initiative, unfortunately, our opponent did not agree.”

“Any other proposals from the Russian Federation not, respectively, by all standards of international financial relations, because it is sovereign debt – is the default,” – said Peskov.

In mid-November, Russian President Vladimir Putin said that Moscow offered to the over payment on the debt of Kiev for years 2016-2018 $1 billion dollars a year.

The President emphasized that Russia not only agreed to restructure the Ukrainian debt, and offered the best conditions, as requested by the IMF. Russia also asked about guarantees from either the US government or from the EU or from international financial institutions.

Later, Deputy Finance Minister Sergei Storchak said that the IMF and creditors of Ukraine must respond to the proposal of the Russian Federation until December 8, 2015.

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© AP Photo/Efrem Lukatsky

The Minister of Finance of Ukraine did not rule out the rejection of the return of the debt of Russia

Last week, the Finance Ministry has received an official refusal from the U.S. government to provide guarantees for the obligations of Ukraine.

The Ministry also stressed that Russia intends to sue Ukraine if Kiev fails to pay debt by $3 billion up to December 20 this year, which would mean a sovereign default of Ukraine.

In December 2013, the presidents of Russia and Ukraine Vladimir Putin and Victor Yanukovych have agreed that Moscow will give Kiev a loan of $15 billion through the placement of Ukrainian securities. Under this program, bonds for $3 billion were placed on the Irish stock exchange on 20 December 2013 and bought by Russia at the expense of the national welfare Fund.