Ukraine views $3 bln loan as Putin`s bribe to Yanukovych to give up EU integration plans

Kyiv authorities consider a $3 billion loan from Russia negotiated between then-President of Ukraine Viktor Yanukovych and Russian President Vladimir Putin in 2013 as a `political bribe`, which the Kremlin paid to encourage Ukraine to give up its EU integration plans.

In this regard, Ukraine is ready to defend its position in court, Ukraine`s Finance Minister Oleksandr Danylyuk said in an interview with a Ukrainian TV channel.

”We have commitments made to the IMF regarding the conduction of consultations on `Yanukovych`s debt`. But we have a clear position in court and we are conveying it. We are focused on defending our position in court,” the minister stressed.

”Meanwhile, according to statements of Russian Finance Minister Anton Siluanov, the Russian side is not ready to negotiate, they put forward new conditions. But it is their right,” Danylyuk added.

Earlier, the Ukrainian finance minister stated that the country would adhere to integrity liabilities to the International Monetary Fund in terms of conducting negotiations on `Yanukovych`s debt`.

As UNIAN reported earlier, Russia lodged with the London High Court a suit against Ukraine after it defaulted on paying the principal amount and interest on a $3 billion loan. The fact that the bonds were purchased via the Irish Stock Exchange makes the disbursement a private creditor debt. However, the Russian side insisted that this was an interstate debt, as the buyer was the state-owned National Wealth Fund. Ukraine wanted the $3 billion eurobond to be restructured under sovereign and sovereign-guaranteed bonds, but Russia reiterated it did not consider the debt to be commercial.

In the course of negotiations, Russian authorities insisted on better restructuring terms than those offered to other creditors, which is prohibited by the bond swap memorandum between Ukraine and the bond holders.

Ukraine has restructured the debt under the IMF`s Extended Fund Facility program approved by the IMF Executive Directors in March last year. In December 2015, the IMF decided that the claim arising from the $3 billion eurobond issued by Ukraine on December 24, 2013, and held by Russia`s National Wealth Fund was an official claim for the purposes of the fund`s policy on arrears to official bilateral creditors. At the same time, the fund revised its lending policy with respect to debtor countries with payment problems, including Ukraine, enabling the IMF to continue its lending program even in the case of non-repayment of Russia`s loan.

Following Russia`s refusal to participate in the debt operation, Ukraine on December 18 announced a moratorium on any payments of the Russian debt, including repayment of $3 billion, which was due in December 2015. The Justice Ministry was tasked to hire lawyers to defend Ukraine in court. Subsequently, Ukraine`s parliament declared that the moratorium had no fixed term.

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