Russia's external debt: infinite rescheduling?☆

Since Russia defaulted on her sovereign domestic debt in the aftermath of the August 1998 crisis, questions were raised as to whether she would do the same for her huge external liabilities. Creditors worry about the possibility that Moscow will try to confront them either with a unilateral moratorium or will try to achieve an “infinite” debt restructuring. The latter would eventually mean the same since the original claims would not be serviced, but kept on the books whereas written off claims get erased. Given the economic resources of that country such a solution cannot be recommended despite some voices that Russia needs even more aid. To relieve the debt service burden the West should, however, agree to reschedule the payments.