Ukraine says it can’t pay off debt to Russia

“Considering that Russia has refused, despite of our efforts, to sign an agreement in the restructuring and to accept our proposals, the cabinet is imposing moratorium on payment of the Russian debt worth $3 billion”, Yatsenyuk reportedly said during a cabinet meeting Friday.

The moratorium on outstanding debt repayments to Russian Federation effectively means that Ukraine is defaulting on the $3bn debt due on Sunday.

“But we are ready to pay this price for our freedom and our European choice”, he told reporters in Brussels, flanked by EU president Donald Tusk and European Commission chief Jean-Claude Juncker.

Tensions between the countries have been high since Russian Federation annexed Ukraine’s Crimean peninsula past year.

“We have stated again and again that Russian Federation is present with military personnel in eastern Ukraine and that is based on our own intelligence sources”, Stoltenberg said as he met Ukrainian President Petro Poroshenko at North Atlantic Treaty Organisation headquarters in Brussels. Putin said at a televised news conference that once the Syrians decide it’s time to stop fighting and launch talks, “we aren’t going to be more Syrian than the Syrians themselves”, and Moscow will wrap up its military action.

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Putin’s decision to suspend a 2011 free trade deal with Ukraine was set out in a decree which cited “extraordinary circumstances affecting the interests and economic security” of Russian Federation.

The Finance Ministry sounded a more conciliatory note, saying in a statement: “Ukraine remains committed…to negotiating in good faith a consensual restructuring of the December 2015 Eurobonds”. That involved a 20 percent write-down of bond holdings, which cut Ukraine’s sovereign debt from $19 billion to $15.5 billion.

Asked about the murder of opposition politician Boris Nemtsov earlier this year, Putin said the crime would definitely be solved and the killers punished.

That cease-fire agreement, reached in the Belarus capital, calls for the withdrawal of heavy weapons, the withdrawal of foreign troops (in this case Russia’s), ending hostilities, changes to Ukrainian law and local elections in separatist-held eastern Ukraine.

Kiev also sought to give a political dimension to the debt, hinting that Russian Federation bought Ukrainian bonds in December 2013 in an act of clandestine bribery of then President Viktor Yanukovych who was facing massive anti-government protests at the time.