Russian President Vladimir Putin has instructed the Finance Ministry to take Ukraine to court if the country defaults on its $3 billion debt to Moscow.
"Go ahead, take it to court," Putin told Finance Minister Anton Siluanov at a government meeting on December 9.
"If Russia sues Ukraine, we are ready fight Russia in court," Ukrainian Prime Minister Arseniy Yatsenyuk said later.
The comments come a day after the International Monetary Fund revised its policy, allowing the Washington-based institution to continue lending to countries that fail to pay debts held by other countries.
That means financial aid to Ukraine may continue if the country doesn't repay the $3 billion Eurobond Russia bought in December 2013.
Last month, Moscow offered to restructure the bond, which matures on December 20, by spreading out payments over three years.
But Ukraine wants the bond to be restructured under an agreement reached with its commercial creditors that would write down the principal of the debt.
