Putin proposes Ukraine debt restructuring

Russian Federation is prepared to take $1 billion per year from 2016 through 2018 from Ukraine, and to defer any payment this year, Putin told reporters at a news conference at the G-20 summit in Antalya, Turkey, on Monday.

Moscow had made the proposal to try to ensure full repayment and “not to put Ukraine in a hard situation”, said Putin, adding he had asked Western partners and the International Monetary Fund itself to guarantee debt repayment.

The worldwide Monetary Fund welcomed Russia’s offer.

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.

Moscow argues that Ukraine’s $3 billion debt to Russian Federation, which comes due in December, is sovereign and not subject to restructuring talks with commercial lenders.

On Friday, Ukrainian Prime Minister Arseny Yatsenyuk reiterated that Kiev would not offer Moscow “better conditions” than to private creditors, who in October agreed to write down $3.6 billion and restructure future debt worth $8.5 billion.