Any country which defaulted on its debts is keen to make any excuse for a debt relief. Unfortunately, Ukraine is no exception. On the one hand, the country declares itself to move toward European values and order. On the other hand, it is not ready to bear responsibility for its debt and obey the international legislation. Ukraine failed to repay a $3 billion debt owed to Russia by December 31, 2015, claiming Russia had refused to accept repayment terms already offered to other international creditors. Recently, Ukraine’s President Petro Poroshenko signed a decree extending the moratorium on the debt settlement. Importantly, the debt burden is worsened by large interest estimated at $75 million.
Tensions between the two former-Soviet neighbors have included arguments over gas supplies. Ukraine’s cabinet of ministers did not acknowledge the debt as sovereign. In response, Russia filed a lawsuit against Ukraine in the High Court in London. Other Ukraine’s lenders were lucky as Kiev admitted its debts and creditors made a concession on debt restructuring. Russia declined to take part in the debt restructuring that Ukraine negotiated with its other Eurobond holders last year. Interestingly, the International Monetary Fund considers Ukraine a sovereign debtor against Russia.
