Ukraine 'cannot pay off debt to Russia'

The Ukrainian government says it cannot pay off its $3bn debt to Russia without violating its debt-restructuring deal with other international creditors.

Ukraine is supposed to pay down the debt by Sunday, and Russia said it would sue Ukraine if it does not get its money back on time.

The Ukrainian finance ministry said in a statement on Thursday that it has “negotiated in good faith” with Russia but it “cannot pay” the bond debt without violating its deal with other international creditors.

In November, Russian president Vladimir Putin proposed restructuring the debt, but Ukraine turned down the proposal, saying that it cannot offer Russia anything better than the deal it had negotiated with other debt holders which involved a 20% write-off.