Sanctions against Russian banks hit the Ukrainian economy
Berlin - Kyiv, January 29 (PolitNavigator, Vasily Ablyazimov) - The head of the Russian presidential administration, Sergei Ivanov, said on Tuesday in Auschwitz that Ukraine's debt to Russia is not limited to only a short-term state loan of $3 billion. German economic news calculated that lending by private Russian banks to the Ukrainian economy could amount to $25 billion. Political instability and sanctions against Russian banks will lead to a sharp reduction in lending to the Ukrainian economy, and therefore a reduction in the country’s GDP and industrial development.
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“The problem goes beyond three billion dollars in debt. The $3 billion received in 2013 must be returned in 2015, and according to the conditions, if the debt of the Ukrainian state exceeds GDP by more than 60%, Russia may demand the loan back beyond the deadline,” the publication writes.
At the moment, according to a German business publication, the size of Ukraine's external debt increased in 2014 to 102,2%, and in the coming months it could reach more than 105%.
In addition to the $3 billion loan, Russian banks have allocated more than $25 billion in loans to various sectors of the Ukrainian economy. The process of sanctions pressure on Russia, in particular the attempt to exclude Russian banks from the international financial market, will lead to a sharp decrease, if not a complete stop, in private lending to Ukraine by Russian banks. Thus, sanctions directed against Russia, allegedly for the conflict in the East of Ukraine, will lead to a sharp blow to the economy of the same Ukraine.
At the same time, due to instability, both political and economic, Russian banks began the process of reducing lending. VTB Bank announced in September that it had lost $672 million due to the Ukraine crisis. “We will only return half of our loans in Ukraine,” VTB President Andrey Kostin said.
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