Ukraine’s Critical Position Towards Russia Raises Doubts Over Debt Solution

While saying that Ukraine reduced gas consumption by 20%, Prime Minister Arseniy Yatsenyuk confirmed his country remains critical of Russian positions despite the recent offer made by Russian President Vladimir Putin. Yatsenyuk’s declaration seems to indicate that there is little room for convergence on the debt issue in the near future. 

“We demand Russia to pay back $16 billion. We consider that Russia fixed an unfair price (for gas – ed.) for Ukraine. And we view that Russia underpays Ukraine for the transit of natural gas via Ukraine’s territory” Yatsenyuk said in a statement published on Friday.  

Yatsenyuk also criticised the South Stream-2 pipeline, saying that the extension of the pipeline connecting Russia with Germany deprives Ukraine of “each transit opportunity and revenue worth 2 billion dollars a year.”

According to Russia’s RIA Novosti, Ukraine does not want to pay the $3 billion debt to Russia, which will become due in December.  

“I said to other lenders there are other conditions to be met or you will not receive the debt. The basic condition is reducing debt by 20%, the transfer of all debts of four years. If you do not like this, then you will receive the decision of the government of Ukraine via a moratorium on paying Russia the $3 billion. It is very easy to explain to our neighbours and the aggressor state: we will not pay $3 billion” Yatsenyuk was quoted as saying. 

On Monday, Putin said that Moscow is open to restructuring Ukraine’s $3-billion debt, adding that it is waiting for guarantees from the U.S., the EU or international financial organisations to proceed. Russia is asking for $1 billion in 2016, 2017, and 2018.