BELARUS NEWS AND ANALYSIS

DATE:

22/12/2008

Belarus seeking $3.5B loan from Moscow

By VLADIMIR ISACHENKOV

Associated Press Writer

(AP:MOSCOW) Russia's President Dmitry Medvedev and his Belarusian counterpart held tough talks Monday focusing on Russia's gas supplies to its ex-Soviet neighbor and Belarus' request for $3.5 billion in loans.

Belarusian President Alexander Lukashenko began the Kremlin meeting on a defiant note, saying he wanted to publicly reject "insinuations that Belarus has come crawling down on its knees to the Kremlin to beg for something."

Belarus has a Soviet-style economy that depends on cheap imports of Russian oil and gas. It also serves as a key transit corridor for Russian natural gas headed to Europe. But the countries have clashed sharply over gas price contracts in the past.

Russian Deputy Finance Minister Dmitry Pankin told reporters that Belarus requested a loan equivalent to $3.5 billion to help shift bilateral trade from dollars to Russian rubles, Russian news agencies reported.

Russia earlier granted a $2 billion loan to Belarus and transferred half of it last month to help Lukashenko's government deal with its financial crisis.

The business daily Kommersant reported Monday that Moscow wanted Belarus to recognize two breakaway Georgian regions as independent nations as a condition for providing the money. After Russia's August war with Georgia, Moscow recognized South Ossetia and Abkhazia. But, so far, only one other nation _ Nicaragua _ has followed suit.

Medvedev and Lukashenko did not mention the issue in their public comments at the start of Monday's talks.

Belarusian lawmakers said Monday that they have postponed the issue of the breakaway region's recognition until spring. "We must carefully analyze the consequences of that difficult step," speaker Vladimir Andreichenko said.

Russian and Belarusian officials also have been locked in tense talks over the price for Russian gas supplies. Belarus currently pays $128 per 1,000 cubic meters, and Lukashenko has strongly resisted Russia's push for doubling the price next year.

Russia's Gazprom state gas monopoly has pressed to expand its stake in Belarus' gas pipeline network as part of bargaining over price, Kommersant said.

Lukashenko warned Medvedev on Monday that if Belarus' industrial plants were to shut down, 10 million Russian workers at subcontractor plants would also lose their jobs. "That wouldn't be in the interests of Russia, let alone Belarus," he said.

The Kremlin said after the talks that Medvedev and Lukashenko agreed on the "main principles" for gas supplies. The Interfax news agency quoted a member of the Belarusian delegation as saying that Minsk was happy with the agreed price, but would not say what it was.

Lukashenko, dubbed "Europe's last dictator" by the United States and the European Union, has relied heavily on Russia's support. But he has made efforts this year to improve relations with the West, releasing opposition activists and making other overtures.

Last week, Lukashenko announced he was seeking $5 billion in aid from the United States. Belarus is also negotiating for a $2 billion loan from the International Monetary Fund.

Associated Press writer Yuras Karmanau contributed to this report from Minsk, Belarus.

(This version CORRECTS Belarus seeking $3.5 billion loan sted $3 billion)

Source:

http://news.ino.com/headlines/?newsid=689578437980

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