Russia could really make things miserable for Ukraine soon.
On Tuesday Russian president Vladimir Putin said that Ukraine should repay the $US3 billion loan because Russia needs that money to fight the economic crisis that’s currently ravaging the nation, reports Bloomberg’s Anton Doroshev.
Last week, Russia rolled out a $US34.7 billion stimulus program, which focuses primarily on bailing out banks and big companies.
This “anti-crisis” package aims to cushion the blow from the current economic crisis.
And now Putin says that Russia’s Wellbeing Fund, including the debt due for repayment by Ukraine in December 2015, should be used for “our own needs” because “additional resources are needed to” implement the stimulus program, according to Bloomberg.
But this is hardly surprising. Over the last few weeks, Russia has several times threatened the possibility of calling in the loan.
In early January, the Russian finance minister even announced that Ukraine breached the terms of agreement of the loan, which would give Russia some leverage in this argument.
If Russia’s actually serious about Ukraine repaying the loan, things could soon get ugly because this could push Ukraine into default.
The timing for repaying this loan “couldn’t be worse,” for Ukraine, wrote Business Insider’s Tomas Hirst. “Ukraine is set to hand over $US19 billion over the next three years ($US7.5 billion in 2015, $US4.7 billion in 2016, and $US6.6 billion in 2017) in debt payments that its ailing economy can ill afford.”
For now it looks like Ukraine is safe. Kremlin spokesman Dmitry Peskov told reporters that Putin’s “comments shouldn’t be taken as a demand for early repayment of the Eurobonds bought by Russia,” reports Bloomberg.
Still, Russian Prime Minister Dmitry Medvedev says a decision on whether Moscow will recall the loan early will be taken “soon.”
And that was two weeks ago.