Russia Eases Ukraine Debt Standoff, Discusses New Offer With IMF

Russia is putting forward a proposal for Ukraine to settle its $3 billion debt after refusing to participate in restructuring talks, according to Finance Minister Anton Siluanov.

Russia has talked to the International Monetary Fund about its new proposal, Siluanov told reporters during the Group of 20 summit in Antalya, Turkey. He didn’t disclose any details and said Russia hasn’t held talks yet with Ukraine about this new proposal.

“Russia made a proposal on how Ukraine can pay its $3 billion debt to Russia, which should be settled in December this year,” Siluanov said. “We made a proposal to the IMF and I talked to some European colleagues. This proposal, in our view, would be interesting and may serve as a foundation to resolve Ukraine’s debt problem with Russia.”

President Vladimir Putin and his aides have said that the debt, which comes due in December, is sovereign and not subject to restructuring talks with commercial lenders. Russia purchased the bonds in 2013 as part of a promised $15 billion in aid after Ukraine’s then-president Viktor Yanukovych rejected an association agreement with the EU in favor of closer ties with its neighbor to the east.

“We consider it unacceptable for us to talk about a restructuring that’s similar to commercial lenders, which is why we made our own suggestion,” Siluanov said.

Ukraine has reached a $15 billion restructuring agreement with private foreign creditors, while threatening a default unless Russia accepts the terms. Russia has said that it’s ready to go to court if its former Soviet ally doesn’t make its repayment in full by Dec. 20.

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