Russia Can Not Block IMF Reform Allowing Aid to Ukraine in Case of Default

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A reform of the International Monetary Fund (IMF), which will allow continuous financial aid to Ukraine in case of a default, will not be blocked by Russia, Aleksei Mozhin, IMF Executive Director for Russia said.

WASHINGTON (Sputnik) – Ukraine’s overall state debt amounts to $70 billion, of which about $40 billion is owed to international money lenders.

"A simple majority is needed here, Russia only has 2.5 percent. So I expect that the reform will be passed. But further discussions on the issue will be held," Mozhin told RIA Novosti, adding that Russia has no veto power in this case.

Visitors are silhouetted against the logo of the International Monetary Fund at the main venue for the IMF and World Bank annual meeting in Tokyo in this October 10, 2012 file photo. - Sputnik International
IMF Urges Ukraine, Russia to Discuss Debt Restructuring

Ukraine has been increasingly reliant on external help in order to restore its economy, which was significantly weakened by the 2014 change of power and the subsequent outbreak of hostilities in the country’s southeast.

The seal of the International Monetary Fund is seen at the headquarters building in Washington, DC on July 5, 2015 - Sputnik International
IMF Starts Second Assessment of $17.5 Billion Financing Program for Ukraine
Russia issued a $15-billion loan to Ukraine in December, 2013, having bought $3 billion-worth of Ukraine's Eurobonds. The rest of the loan was cancelled following the regime change that took place in Ukraine in February, 2014.

Russia maintains that Ukraine must repay its debt in full by the end of 2015.

The IMF has agreed to allocate $17.5 billion to Ukraine as part of a four-year financial aid program.

According to the IMF arrears policy, countries borrowing from the fund continue to receive loans if they miss payments to commercial creditors, but if a payment to a sovereign creditor (such as Russia) is missed, the borrower cannot get any more aid from the IMF.

Now, the IMF is reassessing its lending-into-arrears policy aiming to change the lending requirements.

Mozhin took part in the Russia Direct's round table discussion on the future of BRICS and new landscape of globalization at the Embassy of the Russian Federation to the United States.

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