December 31 may become Ukraine’s default date, as debt is not redeemed: Finance Ministry

To avoid bond default, Ukraine still has time until December 31 – the so-called “grace period” - to repay the US$3 billion debt to Russia. Otherwise, event of default may be announced on the last day of the passing year, EADaily is told at the Finance Ministry of Russia. 

The Ministry said Ukraine was to redeem the debt by the end of the business day on December 21. “Ukraine failed to redeem its government domestic loan bonds. Actually, it preferred a bond default to negotiations on the basis of the Russian president’s proposals,” the source reported. The Ministry hopes Kiev will fulfill its liabilities by December 31.

Earlier, EADaily reported that Prime Minister Dmitry Medvedev charged the government to prepare a legal action against Ukraine over its refusal to pay the US$3 billion debt to Russia. 

Addressing Sergey Prikhodko and other officials, the prime minister said: “We must use protective measures to make Ukraine pay its debt. We must draft all the necessary papers to address a legal body that was elected on the basis of our agreement with Ukraine for handling this dispute. We must hire lawyers and start the procedure to make Ukraine pay everything, including fines,” Medvedev said.

Earlier, on December 18, Ukraine’s authorities imposed a moratorium on the payment of the debt to Russia, which was actually an announcement of default. The fact on non-payment is recognized in 10 days after the deadline for payments – on December 20. Russia’s Foreign Ministry will appeal to the international court over Ukraine’s debt on December 31, deputy minister of finance Sergey Storchak said. Starting that date, Russia will get a legal right to claim the debt to be repaid.