Saturday, January 10, 2015

Russia “highly likely” to demand early repayment of Ukraine’s $3bln debt

Russia looking to get its loan back early as the stand-off continues

So says Russia’s RIA Novosti agency this morning, citing an anonymous government source who said that Ukraine was in violation of a “whole series” of conditions for Russia’s loan.
In these circumstances it is highly likely that Russia will be forced in the near future to demand from Ukraine the early repayment of the $3 billion debt
Russia lent the money in December 2013 by buying Ukrainian Eurobonds, before the overthrow of   pro-Moscow Yanukovich in February last year.
The comments seem to contradict remarks made in November by President Putin, who told German media that Russia did not intend to demand early repayment of Ukraine’s debt as this would cause a financial collapse. I guess though now that their need is a little more urgent.
Earlier this week I reported that the EU were considering another EUR 1.8 bln loan to Ukraine, proving once again that what the left hand receives the right hand may well have to give away.

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