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Russia, In Nod To New Kyiv Government, Suspends Debt Demands

Russian Finance Minister Anton Siluanov says Moscow is giving Kyiv a reprieve on its debt repayment.
Russian Finance Minister Anton Siluanov says Moscow is giving Kyiv a reprieve on its debt repayment.

Russia said it temporarily suspended its demand for full repayment of a $3 billion loan to Ukraine to give the new government in Kyiv time to decide what to do about it.

"We have given the new Ukrainian government an extension to assess the situation with a clear head, to reevaluate its position, and open negotiations with Russia on its debt," Russian Finance Minister Anton Siluanov said on April 22.

The move follows "a request from Ukraine" that Russia take Kyiv's current "political instability" into account, he said.

Ukraine's parliament last week approved pro-Western speaker Volodymyr Hroysman as prime minister and he and President Petro Poroshenko are still assembling their cabinet.

Poroshenko on April 22 appointed Leszek Balcerowicz, the architect of Poland's "shock therapy" economic policies and successful post-Soviet privatization drive, as a top economic adviser.

The appointment follows the naming of former Slovak Finance Minister Ivan Miclos to the cabinet and signals that Poroshenko is reaffirming his commitment to the economic reforms prescribed by the International Monetary Fund.

In view of the changes in Kyiv, Siluanov told reporters in Moscow that Russia has agreed to Ukraine's request to delay court hearings in a lawsuit Moscow filed in February over the disputed debt, which was issued in 2013 to the government of Russia-backed Ukrainian President Viktor Yanukovych weeks before he was ousted from office.

"We gave the new Ukrainian government a reprieve," he said. Ukraine had asked London's High Court of Justice twice to postpone hearings.

The loan was a eurobond issued on the Irish Stock Exchange and governed by English law, so Russia's lawsuit was filed in London.

The lawsuit against Kyiv was filed after the two sides failed to reach a settlement of the debt, with Russia insisting on full repayment and Ukraine demanding a 20 percent writedown like it obtained from commercial creditors last year.

Kyiv missed a December 21 payment on the debt and has been in default on it ever since. While Russia has rejected any writedown of the debt, it has offered to spread out its repayment over three years.

With reporting by AFP, Interfax, and TASS
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