Russia should accept Ukraine’s offers to restructure “Yanukvych’s debt” because it will not get a better deal, Prime Minister of Ukraine Aresniy Yatseniuk wrote on Facebook, August 28.
“Either Russia accepts our proposals for the loans or (it needs to understand) there will be no better deals,” he wrote. “Those who took these funds from Russia have received political asylum there. Let (Russia) call the thugs it has sheltered and take the money from them. Or let it turn these thugs over to us and we will gladly prosecute everyone who has received money and has plundered the funds of the Ukrainian state,” he added.
On Thursday, August 27, Ukraine reached an agreement with creditors to write off 20% of the state debt. At that time Prime Minister Yatseniuk stated that Russia would not receive better terms in restructuring the “Yanukovych debt” than members of the committee of creditors. In other words, Russia will have to agree to the 20% restructuring.
“Russia has not joined the committee of creditors. Under no circumstances will Russia obtain other terms than the other creditors,” he said.
Economist Borys Kushniruk believes that after the restructuring Ukraine now has the winning hand regarding the debt.
“If Russia sues Ukraine in the European courts then Russia risks losing time because it is not clear how long it will take to consider this matter. That is the first thing. Second, Russia risks opening itself up to counterclaims. In that case, Russia could pay much more that the $3 billion owed by Ukraine,” he said.
According to Kushniruk, Russia has the option of selling the debt to a private entity.
“I expect that one of the options is to sell the debt to some private entity, probably foreign, so that it could act as a lender in a trial against Ukraine. As soon as this debt ends up in the hands of a private lender, Ukraine will immediately be able to say that it has a signed agreement with most of the lenders and one of the provisions is that other lenders may not be offered better terms than the ones who signed the agreement.
However, he believes there will be some negotiated agreement.
“Undoubtedly, the closer we get to December and the deadline for repaying this debt, the more chances there will be that Ukraine will obtain one of the options to the agreement with Russia,” Kushniruk said.
As reported previously, Ukraine has reached an agreement with its creditors to write off 20% of the some $18 billion in bonds held by foreign lenders and to postpone the next payment deadlines until 2019. Russia said it is not prepared to write off 20% of the $3 billion in Eurobonds due from Ukraine in December.