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Russia moves on debt restructuring

November 16, 2015

On the sidelines of the G20 meeting in Turkey, Russia has made a proposal to the International Monetary Fund on Ukraine's debt to Moscow. The IMF welcomed the Kremlin's move, calling it "a positive step."

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Ukraine flag DW/Evgenij Shulko
Image: DW/Evgenij Shulko

In a surprise announcement at the G20 summit in Turkey on Monday, Russian President Vladimir Putin said his country was willing to restructure the $3-billion (2.8-billion-euro) debt owed to Moscow by Ukraine.

Putin said that rather than seeking full debt repayment this year, Russia would consider receiving installments of $1 billion a year between 2016 and 2018.

"We're ready not to receive any money this year," Putin said in a statement.

The International Monetary Fund welcomed Russia's offer. "The proposal made by the Russian authorities regarding debt restructuring for Ukraine is a positive step," the global lender commented, adding that the details would now have to be debated between Moscow and Kyiv.

Breaking the deadlock

Originally, Moscow had insisted that Ukraine repay by December the $3 billion it issued to former President Viktor Yanukovich ahead of pro-European protests that led to his ouster in February 2014.

The Russian authorities' proposal was widely viewed as a crucial step towards more stability in Ukraine as fighting between government forces and Russia-backed separatists in eastern Ukraine died down.

The debt restructuring dispute had been hampering the IMF's $17.5-billion rescue plan for Ukraine which restricted Kyiv's ability to renegotiate billions of dollars in debt.

hg/nz (Reuters, AFP, AP)