European Forum

Russia ends loan to Belarus; Lukashenka wants distance

In a meeting in Minsk on Thursday 28 May between the Belarusian President and Russian Prime Minister, Russia said it will not extend a 500 dollar million loan requested by Belarus. As response to this, today (29 May) in a Cabinet session Belarusian President Aleksandr Lukashenka stated Belarus will not bend for Russia and if needed the country will find other partners.

The statements came after talks on Thursday between Lukashenka and Russian Prime Minister Vladimir Putin and Finance Minister Alexei Kudrin. During this meeting the two countries failed to agree on the last tranche of a stabilisation loan to Minsk. Moscow’s growing reluctance to finance its one-time Soviet ally follows Lukashenka’s rapprochement with the West through the EU’s Eastern Partnership. Despite this on Thursday Kudrin said that Belarus had refused to accept the money in Russian rubles, and had asked for U.S. dollars. He also criticized Minsk's economic policies, saying that Belarus was spending too much of its gold and foreign currency reserves to keep the exchange rate stable. Russian Finance Minister Kudrin now predicts the collapse of the economy by the end of this year or in early 2010. Lukashenko accused Kudrin of taking sides with Belarus's opposition, whom he said have been "funded by the West," and pointed to Russia's own economic failures.

In today’s cabinet session on the social and economic development of Belarus, Lukashenka warned Prime Minister Syarhei Sidorski and head of the National Bank of Belarus Pyotr Prakapovich to “ stop bowing for Russia as well as to stop begging from the powerful neighbour”. He also stated in public that if Russia does not want to provide the loan it promised a long time ago and that Belarus included in its budget “Belarus will look for happiness in another part of the planet”.

Late last year Russia handed over more than a billion euros in crisis credits, and another 700 million this spring. Much of the money was ear-marked by Lukashenka to finance a nuclear plant to reduce his country’s dependence on Russian gas. Now Lukashenka’s apparent desire to distance his country from Russia has irritated his powerful neighbour, which seems ready to cast Belarus adrift.


Sources: Charter97; Kommersant; RianNews; Naviny.by