IN THE tense, uncertain days of late 2013, when Ukrainians filled Kiev’s Independence Square in protest at their government’s turn towards Russia, the then president, Viktor Yanukovych, grabbed a lifeline. To bolster his resolve in resisting the demands of pro-EU protesters, Russia lent Ukraine $3bn in the form of a bond. Mr Yanukovych was subsequently ousted anyway. Russia and Ukraine went to war. The money was never paid back.
So Russia took legal action against Ukraine. The bond was issued under English law, and a hearing began this week in London. Those on the Ukrainian side say the country has no case to answer. In 2015 a group of creditors agreed to a debt restructuring on favourable terms: Russia refused to take part. And Russia itself made it much harder for Ukraine to repay the bond by annexing Crimea and stoking war in the Donbass. Moreover, it has fiddled with gas supplies to the country and slapped on trade sanctions. In 2013-15 Ukraine’s GDP dropped by 15%. The purchasing power of ordinary folk has fallen far more. In 2013 eight hryvni bought one American dollar; it now takes more than 25.
It is not clear, however,…Continue reading