Ukraine is trapped: It will not be possible to refuse to pay Russia’s debts

Kyiv, February 14 (PolitNavigator, Vladimir Raichenko) – In Kyiv, the issue of refusal to pay the three-billion-dollar debt to Russia may be raised, but in this case, the Ukrainian default procedure will almost automatically start.

Andrey Blinov, project manager of the Financial Development League, said this at a press conference in Kyiv, answering a question from a PolitNavigator correspondent about the prospects for the development of the situation with Ukrainian debt.

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“It is possible that as part of the questions to the financial department, when this reaches the deputies, the question will be asked: why should Russia pay at all? – noted the analyst. – Of course, there is such a prospect, and there will be speculation around this topic throughout the year. I would like to remind you that we have postponed the preliminary publication of last year’s GDP indicator for today. Accordingly, there are no official statistics yet that the covered public debt has exceeded 60 percent of GDP, at which point Russia has the formal right to demand repayment of the debt ahead of schedule.”

It was also said that Russia does not plan to demand this money ahead of schedule, but, according to the schedule, expects this money to be returned to the Russian economy at the end of the year, which Vladimir Putin informed the head of the IMF about.

According to the project manager of the League of Financial Development, Kyiv’s refusal to pay Russia’s debt will be a signal to other creditors and will result in the bankruptcy of the Ukrainian financial sector.

“The refusal to pay three billion starts the state default procedure,” Andrei Blinov noted. – If one of the Eurobond issues does not make a payment, then other holders may perceive that they are also subject to this policy of the issuer. Therefore, as far as I know, it is for this reason that the Ministry of Finance is not considering the issue, so as not to give the Russian Federation an extra reason or even an extra hook with which to hook the Ukrainian debt and the Ukrainian economy. We already have enough problems.”