In December, a multi-billion-dollar loan [variously stated as $3-$3.5 billion] to Ukraine comes due, which Ukraine had received from Russia. The IMF has provided a new debt plan, however, dictating that existing loans to Ukraine that have an expiration-date are to be subjected to a haircut. Thus, the resource gap of the country totaling $40 billion is to be reduced.

Since the crisis, Ukraine has received several loans from the IMF and the EU [and the U.S.]. These loans must be repaid in a few years from now. However, the financial situation of the country remains vulnerable. Over the next four years overdue loans totaling $15 billion need to be paid [they’re mostly loans from Russia]. Only three billion of them are an old loan Russia that has to be paid in December of this year. The IMF might prevent it [from being repaid in full, even though it has seniority over the new loans that are coming from the West].

The IMF has developed a program for Ukraine, under which the current financial hole is to be filled in the amount $40 billion. The due debts [the senior debt] are part of the plan, and will be restructured, according to the IMF. Exactly how it is to happen, the IMF does not explain. Experts say that the IMF believes that Russia should participate in a haircut. The Financial Times reports [“Bailout projections indicate Ukraine will not repay Russia debt” 5:21 PM, 22 March 2015] that the IMF requires that Russia’s $3.5 billion bond issue be included in the restructuring. Charles Blitzer, a former IMF employee, has informed the FT of this.