Ukraine's conflict with Russia has continued on since Russia annexed Crimea in 2014. During the 2013 protests in Independence Square, then-President Victor Yanukovych received a $3 billion bond from Russia to deal with the pro-EU protesters' demands. Even after Russia and Ukraine's conflict, the money was never paid back.
The bond was issued under English law, and Russia has taken legal action against Ukraine in London courts. Issues facing Ukraine's repayment of the bond has come from Russian aggression and resistance. In 2015, Russia refused to partake in a group of creditors' attempt to restructure the debt; the annexation of Crimea and war in the Donbas region has made repayment to Russia extremely difficult; furthermore, Russia has put sanctions on Ukrainian importation and has slowed gas supply to Ukraine. Because of these Russia actions, the GDP in Ukraine has fallen by 15%, and the hyvnia has fallen from 8:1 USD in 2013, to 25:1 USD.
On the bright side, there has a been a resurgence recently as the hyvnia has fallen, making exportation more favorable. Ukrainian citizens are viewing the recession's end, and markets are beginning to flourish (regardless of pro-Russia Trump's election).
Pressure on the hyvnia will begin again with the repayment of the bond, as well as anger Ukrainian citizens. In order to repay the bond, Ukraine will have to pay approximately $15 billion, equivalent to their current reserves of foreign exchange.
Ultimately, Russian aggression and insistence to have control over its sphere of influence in Eastern Europe comes as their power diminishes: its removal from the G8, EU sanctions causing a tank in the economy, and the United States' beginning self-reliance on gas, which is Russia's largest export, has caused gas prices to fall dramatically. With this, and a need to exert power and nationalist sentiment in Russians living outside of Russia as NATO and the EU continues to expand, it is not surprising that Russia is being seen as the bad guy- this has always been their foreign policy.
As for Ukraine, the stretch of the looming debts that need to be repayed is daunting. The market for agriculture was supposed to be expanded by foreign investment, but has fallen through. Per capita GDP is one-tenth of the United States', and like many other countries under the sphere of influence of Russia, the 2019 election will have a loud populist voice, following the worldwide trend of embedded liberalism's demise.
"Ukraine's Economy: The Other War." The Economist. The Economist Newspaper, 21 January 2017.
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