DUSHANBE, January 11, 2014, Asia-Plus – Russian media sources report that Moscow may ask for early repayment of its $3 billion loan to Ukraine.
They quoted Russian finance Minister Anton Siluanov as saying on January 10 that Kyiv has violated the conditions of this loan, specifically that Ukraine’s public debt has exceeded 60 percent of its gross domestic product (GDP).
“Ukraine has definitely violated the terms of the loan, and in particular (the condition) not to increase its state debt above 60 percent of GDP,” Russian minister said, according to Interfax news agency.
“So Russia definitely has the right to demand early return of this loan. At the same time, at present this decision has not yet been taken.”
According to AFP, Russia had agreed to provide a massive $15 billion bailout loan to Ukraine in December 2013, before its ex-president Viktor Yanukovych was toppled. It then froze the loan after the first $3 billion installment.
The terms of the loan deal included a condition that Ukraine”s total state debt should not exceed 60 percent of its annual gross domestic product (GDP).
Reuters reports that Siluanov was commenting on earlier remarks by an anonymous government official saying that Russia was likely to demand early repayment as Ukraine had violated many of the loan terms.
According to Reuters, rating agency Moody”s last month estimated that Ukraine”s debt amounted to 72 percent of GDP in 2014 and would rise to 83 percent in 2015. It also said “the risk of default is rising.”
AFP reports that Russian President Vladimir Putin said in an interview with German channel ARD in December that Russia has the right to demand early repayment, but added that Moscow would refrain from this course of action. “If we do this, the entire financial system will collapse,” he said. “We have made a decision: we will not do this. We don”t want to worsen the situation. We want Ukraine to finally be steady on its feet.”
International medial sources report that the Russian remarks on the debt come ahead of key peace talks to resolve the conflict in eastern Ukraine and may be intended to increase economic pressure on Kyiv with a view to influencing those talks.
The foreign ministers of Russia, Ukraine, Germany and France will meet in Berlin on Monday to discuss the conflict, with a summit between the four countries” leaders in Kazakhstan provisionally scheduled for January 15.
