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24 Oct, 2014 19:52

Putin: Russia’s plans to solve Ukraine’s debt problem rejected

Putin: Russia’s plans to solve Ukraine’s debt problem rejected

President Putin said Moscow offered numerous solutions to Ukrainian gas debts which have been rejected by Kiev and the IMF as complicated and difficult procedures. He expects a solution to be found soon otherwise it could lead to a crisis.

Talking about Russian gas delivery to Europe at the Valdai international discussion club meeting on Friday the President explained all the concessions Russia has made and is ready to make to see gas flow into Ukraine and urged the Western partners to co-operate.

Ukraine’s debt to Russia is 5.6 billion dollars for gas delivery and 3 billion dollars of credit. Russia has revised the sum of the debt and now demands only 4.5 billion. In January Ukraine is to receive a tranche from the IMF. The final sum will be reconsidered by the IMF after October, 26.

Putin said Russia suggested several variants to Kiev and IMF of how the debt should be covered.

The first option, that was voiced by Russia, is the IMF credit approved for January should be transferred in December. In this case Ukraine would be able to process pre-payment for gas. But the answer of the IMF was negative because of the complicated procedure of taking decisions.

It was the same answer for another proposition to provide Ukraine a 1.5 billion dollars bridge credit or a high rank bank guarantee.

The third idea proposed by the President also involves bridge credit from the West.

The Russian president compared Ukraine with a girl.

“In Ukraine and in Russia if a man invites a girl to a restaurant he generally pays for her,” he said. “With you it is Hamburg reckoning, everybody should pay for oneself. But in this case it is another situation. The European Union offered an association with Ukraine and took certain responsibilities. So, help Ukraine! At least a month! Give it a bridge credit.”

Unfortunately IMF officials rejected this idea saying it was impossible.

The president recalled last year’s situation. Russia offered to grant Ukraine a credit and to keep the gas price low for the first quarter of the year. The price could be frozen if the Ukrainian part kept on paying punctually and paying the whole debt. But it did not happen.

Recently, Ukrainian officials stated they have only 3.1 billion dollars though the current debt for Russia is 4.5 billion. Kiev officials suggested Ukraine should pay only a part of the debt but then it would not be able to process pre-payment. Or Ukrainians could process pre-payment and pay the debt later in March or April. The Russian president considered both variants unacceptable because he was sure Russia would not get the money.

“We have passed this already many times,” he said. “So we are not going to do it like that anymore.”

President Putin has also turned down plan presented by the European Commission. According to it, Russia should provide gas to Ukraine at the credit of future gas transit costs or without pre-payment which is also a commercial credit.

“We told our friends in Ukraine and in European Commission we were not doing it like this anymore,“ added the president.

Finally, President Putin said he still believed the problem would be solved in the near future.

The next trilateral talks are to be on October, 29.

European Commission President Jose Manuel Barroso stated the EC was ready to provide 790 million euros to help pay debt to Russia, the Wall Street Journal reported Friday.