EU Offers Minsk Loan With Strings

The European Union could offer Belarus economic assistance if it meets similar conditions to those set for a loan package by the International Monetary Fund, an EU official said Tuesday.

But EU officials also made clear after talks with Belarus that the country would have to make more progress on democracy and human rights before it could receive such assistance to combat the global economic crisis.

"We could unlock the full potential of our relationship if indeed convincing and irreversible reforms will be there," Benita Ferrero-Waldner, EU commissioner for external relations, told a joint news conference with Belarussian Foreign Minister Sergei Martynov.

"We are : considering macrofinancial assistance and the possibility for Belarus to receive EIB and EBRD loans in the future," she said, referring to the European Investment Bank and the European Bank for Reconstruction and Development.

"We stand ready to support and re-engage with Belarus if indeed Belarus shows itself to be very serious in pursuing moves towards democracy and fundamental freedoms," she said.

But it is far too early to say how much money Belarus might receive, she said. Asked about the conditions attached, she said: "The conditionality is, so to say, the IMF conditions."

The IMF approved a $2.5 billion emergency loan package with Belarus in December to help it through the financial crisis.

It said Belarus had agreed to measures including a strengthened monetary and exchange rate policy framework, fiscal restraint through cuts in public investment and directed lending by banks, and strict public-sector wage restraint.

The fund increased financing support for Minsk last month by $1 billion under a revised economic program.

Martynov said after the talks that "both sides understand the need to work together and the wish to work together."

(Reuters, AP)



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