Speaking during a meeting with ministers of Prime Minister Dmitry Medvedev`s cabinet, Putin reportedly told Finance Minister Anton Siluanov: "Go ahead, take them to court."
Siluanov said Ukraine had 10 days after the Eurobond falls due on Dec. 20 to either repay the $3 billion or accept Putin`s restructuring proposal for the debt to be paid back in $1 billion installments, backed by Western guarantees, over three years.
Medvedev said in an interview on state television Wednesday he had a sense that "they won`t pay it back because they are crooks," accusing Western countries to "interfere" in the matter.
Defiant Kyiv
The two-year Eurobond was taken out by the government of Moscow-backed ex-president Viktor Yanukovich just two months before he fled to Russia in February 2014 in the face of street protests over his policy swerve away from deeper integration into the European Union.
Ukrainian Prime Minister Arseny Yatsenyuk on Wednesday remained defiant saying the country was ready to fight back if Moscow took legal action.
"If Russia sues Ukraine, we are ready to fight Russia in court," he told a government meeting. "Our position was and remains the same: we proposed to all our international creditors to participate in restructuring [the debt] . All adequate international creditors accepted Ukraine`s proposal."
The dispute has been hampering the International Monetary Fund`s (IMF`s) $17.5-billion rescue plan for war-torn Ukraine, restricting Kyiv`s ability to restructure billions of dollars in debt, including some held by Moscow.
IMF double standards
Meanwhile, the IMF on Tuesday changed a rule that would have blocked its financial aid program to Ukraine in the event the country defaulted on its debt to Russia.
The Kremlin sharply criticized the Washington-based lender`s decision to continue supporting Ukraine even if it failed to repay official creditors. Prime Minister said Moscow would "fight for a default on all Ukraine loans ."
Until now, the IMF could not provide financing to a member country that was in arrears to an official creditor, such as a government. Russia will have to file any claims in a London court as the Eurobond was drafted under British law.
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