December 18, 2015 - 16:25 AMT
Prime Minister says Ukraine won't repay Russia's debt by weekend

Ukrainian Prime Minister Arseniy Yatsenyuk said on Friday, December 18, that his country won't repay a $3 billion debt owed to Russia after Moscow's refusal to accept repayment terms already offered to other international creditors, the Associated Press reports.

The "moratorium" on outstanding debt repayments to Russia effectively means that Ukraine is defaulting on the $3 billion debt due Sunday.

It's the latest spat between the two neighbors following a run of gas supply disputes, the Crimea issue and support for separates in eastern Ukraine.

"After Russia refused to accept our offer despite our attempts to reach a restructuring deal, the government is imposing a moratorium on the repayment of the $3 billion debt to Russia," Yatsenyuk said at a televised government session.

He did not indicate when Ukraine would be ready to repay the debt. Moscow has previously said it will take Ukraine to court if it fails to pay on time.

Ukraine's economy has struggled over the past few years and the country has negotiated repayment terms with creditors, but not with Russia.

In November, Russian President Vladimir Putin proposed a debt restructuring, saying Moscow would be willing to agree to payments of $1 billion a year between 2016 and 2018.

Ukraine turned down the offer, saying it cannot legally offer Russia a better deal than the one it has negotiated with other debt holders. That deal has seen countries accept a 20 percent write-down of their Ukrainian bond holdings, a move which has cut Ukraine's sovereign debt from $19 billion to $15.5 billion.