Kiev's intransigence on eurobond status blocking talks, says Kremlin

MOSCOW, Jan. 25 - Russia and Ukraine have informally exchanged opinions about the possibility of launching negotiations on the settlement of Ukrainian debt with the German Finance Ministry acting as intermediary, but those talks have not yet begun because Ukraine is unwilling to recognize the official status of the debt, Deputy Russian Finance Minister Sergei Storchak told reporters.

"With the mediation of the German Finance Ministry, an informal exchange of opinions took place on the possibility of such talks. But, due to the uncompromising position of Ukraine in its unwillingness to recognize the official status of the debt and offer the Russian Federation terms better than those offered to private creditors, it has so far not been possible to agree to start the talks," Storchak said, regarding Ukrainian Finance Minister Natalie Jaresko's statement about debt talks with German participation.

Negotiations between Ukraine and Russia on restructuring of Ukraine's state debt may take place in Berlin in the near future, Jaresko said on Friday. "We are always open [to negotiations with Russia on debt restructuring]. I am in the process of negotiations with our friends and partners in Germany," she told reporters at the Ukrainian Breakfast in Davos.

Jaresko recalled that German Finance Minister Wolfgang Schaeuble helped organize a meeting with Russian Finance Minister Anton Siluanov in Lima, Peru, in October at a meeting of the International Monetary Fund and the World Bank and participated in it.

Commenting on the negotiations with Schaeuble in Davos on January 21, Jaresko said he will help organize meetings with the Russian Finance Ministry in the future.

Jaresko also expressed regret that she could not meet with representatives of the Russian delegation in Davos. She said Kiev is still open to negotiations on debt restructuring, but its conditions do not have to be better than the conditions on which debt was restructured for private creditors.

"We are open to possible restructuring, despite all our cases in various courts," Jaresko said. This is doable is the other side wants that, she added.

The $3 billion debt in eurobonds, which Russia acquired with National Welfare Fund funding in late 2013, was to be paid off by Ukraine by the end of December 2015. Ukraine declared a moratorium on the servicing of this debt. In response, Russia said it intended to defend its interests in court.

Ukraine failed to make a payment in the amount of $3.075 billion in Eurobonds held by Russia by January 1, 2016. In that regard, the Russian Finance Ministry turned to the company Law Debenture Corporation, which is the creditor's guarantor, in accordance with the Eurobond issue documentation, and initiated procedures needed to begin litigation. A lawsuit will be filed with a British court.

Siluanov earlier said Russia did not believe that dialogue with Ukraine was impossible, despite the start of the litigation. (om/ez)