In an interview with a German newspaper, Handelsblatt, Ukraine’s Prime Minister, Arseny Yatsenyuk has stated that his government has no intention of paying back the country’s $3 billion (€2.71 billion) loan from Russia if Moscow refuse to agree to a restructuring deal. 

Russia is the only creditor of Ukraine to refuse any restructuring deal, and in fact did not send a representative to recent debt negotiations held in London.

He went on to say that Russia will have to take Ukraine to the international courts, with Yatsenuk giving Thursday as a deadline to reaching an agreement.

IMF Relationship

Whilst Ukraine has previously stated it will not pay back the loan to Russia unless it is restructured, there had been concerns as to the status of Ukraine’s relationship with the IMF if this happened. Officially, the IMF cannot loan to countries who default on their debts.

Ukraine’s Finance Minister, Natalie Jaresko has said an exception will be made by the IMF in this case.

Finally, Yatsenuk has claimed that the loan from Russia was taken as a ‘bribe’ by former ousted President, Viktor Yanukoyych to stop the signing of the association agreement with the EU. These words are only likely to only inflame the situation between the two countries further.