Russia opposed to restructuring of Ukraine’s debt – finance minister

(Interfax – Istanbul, February 10, 2015)

Ukraine has asked Russia to agree to a restructuring of its debt, but it is in the Russian Federation’s interest to recover the currency assets it invested in Ukrainian eurobonds, and Russia is not willing for the repayment of these debts to be deferred or delayed, Russian Finance Minister Anton Siluanov has told journalists.

“Ukraine has asked for its debt to be restructured. I had talks with my Ukrainian counterpart,” he said.

“Recovering the money we have previously invested in another country’s bonds is really important, and so we’re not willing to go for a delay or deferral,” he stressed.

Siluanov noted that the talks took place last month.

According to the minister, the Russian side expressed bewilderment with the fact that the budget Ukraine adopted for the current year does not earmark any money to settle 3bn dollars of debt due to be repaid to Russia in December. “Our Ukrainian counterpart assured us that thi! s money is in the budget, but then they approached us with a proposal for this debt to be restructured,” he said.

“Russia’s position is that we have the right to demand early recovery of the debt, since there has been a breach of the covenant (a condition which makes it possible to demand that a debt be repaid early if state debt exceeds 60 per cent of GDP – Interfax), but for the time being we are not making use of this. On the other hand, we are counting on and expecting Ukraine to pay off the debt it is due to repay us in December,” the minister also noted.

According to him, any currency earnings received by the budget are important. The monies that Ukraine should be paying in December in repayment of this debt have been accounted for “in our plans, in our balance of payments and in our budget”. “We’re not currently in the sort of situation where we can easily part company with debts that we are owed,” Siluanov said.

According to him, since his Ukrainin counterparts have confirmed that money has been earmarked in the budget to repay the debt, “we have reacted on the basis that the word of the Finance Ministry counts for a great deal, and we’re expecting this money in December”.

In 2014, Ukraine’s external debt increased by 1.224bn US dollars, or 3.3 per cent, and now stands at 38.8bn US dollars.