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. Last Updated: 07/27/2016

Minister Blames Kiev For Failed Debt Talks

MOSCOW -- Ukraine's decision to assume its share of the former Soviet Union's $70-billion debt ruined an all but complete agreement with creditors to reschedule the debt for 10 years, a top Russian trade official said Monday.


Sergei Glazyev, the foreign trade minister, told The Moscow Times that Russia and the Paris and London Clubs, representing government and private creditors, "had almost agreed on a 10-year extension for the debt", but that the Ukrainian decision had wrecked this accord.


Ukraine decided early this year to refuse the so-called "zero option", under which Russia would assume ownership of all the Soviet Union's overseas assets and take responsibility for repaying the debts. Instead it wants to service its own share of the debt, about 16 percent of the total, and maintain a share of foreign assets.


Glazyev said Ukraine's decision had been the result of the "personal ambitions"of politicians in Kiev.


Glazyev said foreign creditors supported the zero option and Ukraine would eventually see that a resolution of the crisis was in its best interests.


"Progress is possible", he said. "It is more advantageous for Kiev to turn over its part of the debt to Russia, it will clean out their accounts. The Paris Club supports Russia taking over all debts, because it is easier to negotiate".


About $21 billion of the $70-billion debt came up for repayment in 1992 and since January of this year Russia has formally been in default.


Glazyev said Russia wanted to restructure the debt so that it paid $2. 5 billion in 1993, while the Paris Club wanted repayments of $5 billion.