Germany suddenly demanded from Kiev Russia to return the debt in three billion
Photo: Zuma/TASS
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Alexey Martynov
Alexey Panin
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Kiev continues to look for ways to avoid the return of three billion dollars from Russia, the period of repayment of which expired in December. 9 February it became known that the Ukrainian side has offered Russia new conditions debt restructuring in January, at the world economic forum in Davos. And did not the Minister of Finance Natalia Jaresko or other representatives of “independence”, and the Minister of Finance of Germany Wolfgang schäuble, who acted as mediator.
However, the Russian side turned down the offer. As announced on 9 February, the assistant Finance MinisterSvetlana Nikitina, this version was even worse than the conditions received trade creditors of Ukraine in the restructuring. Russia insists that according to international practice, official creditors in such a situation, on the contrary, should receive more favorable terms. Thus, the proposal of Ukraine do not take into account the official status of trimelliate debt and, in the opinion of the Russian side, cannot be considered “an attempt to start good-faith negotiations with the creditor”. Nikitin added that so far Russia has not received any written proposals from the Ukraine, and maintains correspondence on this issue with Germany.
Moreover, it appears that even Germany, the persistence of Kiev begins to pall. If you believe in the business publication Bloomberg, after another refusal of Moscow to Berlin urged the Ukrainian authorities to develop a more favorable debt restructuring terms and to compromise. It is reported by the publication, sources close to the negotiations.
Germany’s desire to hurry to settle this matter quite clear. Bonds on the Eurobonds matured on December 20, 2015. Although Kiev and to the last insisted on the opposite, 17 December the IMF has recognized this duty of the sovereign, and, therefore, not subject to restructuring on the General terms agreed with a group of commercial lenders. However, already next day the Prime Minister of “independence” Arseniy Yatsenyuk declared a moratorium on debt repayment, which means actual default. Although the international monetary organizations have not yet fixed the official bankruptcy of the country, in Berlin you can’t understand that this situation creates a dangerous precedent.
1 January the Russian financial authorities began the procedure required to prepare the trial with the neighbors. And despite the claims Jaresko about the high probability of extra-judicial settlement of the question until all goes to the fact that the two sides will meet in court. And there are Ukraine’s chances of success are reduced, because from the legal point of view is no reason not to pay sovereign debt to “independence” is not.
However, experts do not exclude that Kiev would not mind to settle the dispute before the court, but the money for that just yet. And they are unlikely to appear in the near future, especially considering the statement of the head of the IMF Christine Lagarde, who on 10 February said that the organization may cease to lend to Ukraine. “With no significant attempts to revive the state reform … it is difficult to assume whether the support programme of the IMF to continue and be successful,” she said.
It is difficult to imagine what conditions the restructuring of Ukraine can offer Russia, if the financial flow from the Fund will be closed.
In fact the whole debate now boils down to a simple question: does Ukraine have this money? — I agree Deputy General Director of the Center for political information Alexei Panin. — Apparently, they are not. But if we add to this that the current Kiev leadership the return of money to its geopolitical “enemy” equates to a personal insult, we can assume that the negotiations will last long. This is the case, very convenient when the policy will dovetail with economic reality.
Ukraine is now just delays the process and is trying to buy time, although it is not clear what are their prospects and how this will help.
“SP”: — whether the Rights Bloobmerg when he writes that in this dispute Germany sided with Russia and requires Ukraine to revise the terms of restructuring?
— I think this is fully true. Germany now find themselves in a very difficult situation. Berlin need to resolve issues with Syria and Ukraine as soon as possible, and then be taken for the refugee problem. The foreign policy that Angela Merkel spent the past two years, began to turn against her. Cologne became a kind of culmination of this process. A little more, and Germany risks not only losing its capabilities in the foreign policy arena, but also lose stability inside the country. But this is clearly not what was expected of the German elite, when he entered the geopolitical processes in Ukraine in late 2013.
“SP”: — Can Russia get these three billion ago?
— The most likely prospect is an appeal to the court or the development of some mutually acceptable scenario shortly before the first trial. Court of Ukraine did not need. This multi-million costs, which will certainly fall on Kiev, as the losing party. But until such time as this threat will not be quite so obvious and irreversible, Ukraine will pull the time. And this is not only the fact that Russia, supposedly, the enemy. In the end, it does not prevent Petro Poroshenko to build their factories here. Just in Ukraine there is no money.
Director of the International Institute of the newest States Alexey Martynovbelieves that Ukraine will not escape from debt, no matter how it tried.
— This is another act of Ukrainian Comedy, they’re trying to break to the world community. No one is questioning that this is a state, that is sovereign debt. If Ukraine remains a sovereign state, of course, it needs to acknowledge these debts and to pay. Another issue is that to pay them critically nothing. Yes and no particular desire. So they invent different moves and excuses. This should not be surprising. The approach to the Ukrainian debt to Russia is similar to the series, which is not interesting to anyone.
“SP”: — Non-payment of debt means a default, officially why bankruptcy of Ukraine international organizations not recognized?
— The devil is in the details. Of course, if we analyze this situation from the point of view of international law, in case of refusal to pay sovereign debt, a default occurs and, consequently, serious economic and political crisis. But today in favor of a certain political conjuncture at the level of the international community and various European institutions seek out an excuse to delay or prolong this state of the Ukrainian state in their highly specialized purposes.
Not the first time we see this policy of double standards. But it inevitably leads to the destruction of international law, and responsibility for it lies on the Western curators of the Ukrainian project.
“SP”: — So, Kiev can we just give the money back without any consequences for yourself?
— Of course not. Sovereign debt and sovereign, that sooner or later he will be returned. These Ukrainian authorities, the following or those that will come after them. Sovereign debt has no Statute of limitations. The only option in which Ukraine will cease to be to us is if for some reason we will write off the debt. But if we cannot give it, then sooner or later will get it.
In Ukraine many can Crouch, bind his refusal to pay for the obligations that the Crimea back to their harbour or to calculate their mythical loss. The problem is that in this game you can play together. So if you start to freely interpret international obligations, we, too, can put into question some fundamental from the point of view of Ukrainian statehood documents on the basis of which this state is based.
If desired, you can raise the issues of transfer of Soviet property, or even institutions of the Ukrainian SSR by the decision of the party and the government, which is long gone. Yet, of course, is not in question. But in principle, the abolition of the constituent documents of 1924, there is nothing unreal. Then that would make the Ukrainian state, which is based on the fact that the USSR was subjectivity? Abandoning its obligations, Ukraine is on a very dangerous path.
“SP”: — Why Germany, if you believe the media, start to put pressure on Ukraine to repay the debt?
That’s easy to explain. Germany, unlike Ukraine, the state present, and not conditional. In Berlin are well aware of the danger of setting such precedents. If in favor of short-term circumstances apply double standards, on the move change game rules and create a situation where someone may not pay its obligations and becomes bankrupt, then this precedent could be applied to anyone. The more that the West is prevailing case law.
And Germany, incidentally, one of the largest lenders in Europe. Many countries owe them a lot of money. What if tomorrow the same, Greece will begin to say, “Why is it that Ukraine can, but we can’t? We also will not pay”. Then from their obligations will begin to decline and will collapse the entire system. The German authorities understand that this cannot be allowed, and put pressure on Ukraine.
But Kiev is trying to balance between all your interests — between France, Germany, Brussels and the USA. It’s their favorite game is to run between the streams. You can also compare this policy with the game in thimbles. In the world it has become obvious to all. The only question is how much time all ready to tolerate it. It seems to me that the patience of the leading European countries already on the wane.
Anna Sedova
