Russia throws $1.5b credit lifeline to ally Belarus

Russian President Vladimir Putin pledged a $1.5 billion loan to Belarus during a meeting with his Belarusian counterpart Alexander Lukashenko on Monday.

The meeting at a Black Sea resort in the southern Russian city of Sochi was the two leaders’ first faceto-face talks since Lukashenko won a sixth term in a presidential election last month.

Putin said he hopes constitutional reforms planned by Lukashenko will help settle the crisis in Belarus.

He reiterated Moscow’s position that the Belarusian people, in a calm atmosphere enabling dialogue among themselves, can reach a common decision, without any prompts and pressure from outside.

He added that Russia views Belarus as its closest ally and will fulfill all the obligations it has assumed in relation to its neighbor.

Earlier, Kremlin spokesman

Dmitry Peskov had said cooperation on oil and gas, state debts and other economic ties in the Belarus-Russia “union state” would be discussed in the meeting, but no joint documents would be signed.

“We have agreed that Russia will provide a state credit amounting to $1.5 billion to Belarus in this challenging situation, and we will do it,” Putin was quoted as saying by Russian state news agency Tass. “As far as I know our finance ministers are addressing that issue at the professional level.”

Putin said he hopes that the announcement of the Russian loan to Belarus will be viewed as positive on the financial markets.

“It is no coincidence that I mentioned the loan that Russia is planning to provide to Belarus in the near future. I hope this will have an effect on the financial markets in a proper manner,” he said.

The Russian president also suggested to his Belarusian counterpart that efforts should be made to restore trade, which had decreased due to the pandemic.

“We now have the opportunity to talk about everything in a calm manner, but first of all, we should discuss economic issues,” said Putin, adding that the two countries will continue to fight the coronavirus together, and jointly overcome the difficulties facing the economy.

Lukashenko thanked Putin and all Russians “who support us during this postelection time”.

He said the Belarusian opposition has not yet overstepped the boundaries of acceptable actions.

Military cooperation

In the meantime, according to the BBC, Putin reiterated the importance of military cooperation with Belarus, and said he has a Russian police force ready to intervene if the protests get out of control.

Peskov stressed to media after the meeting that Russia’s new loan cannot be interpreted as Moscow’s interference in the affairs of Minsk.

Part of the new loan that Russia is to provide to Belarus will be intended to refinance the country’s existing debts, he said.

The pandemic, along with the conflicts between the government and opposition, has sharpened the focus on Belarus’ debt problems.

Lukashenko said at the end of August that Belarus would negotiate with Russia the refinancing of the republic’s state debt worth $1 billion.

Russian Finance Minister Anton Siluanov said later that the terms and amount of the credit were discussed at the level of financial bodies.

Belarusian Finance Minister Yuri Seliverstov said earlier that the country is to repay a total of around $3.6 billion of its foreign exchange debt this year, of which $2 billion has already been paid.

According to data provided by the country’s Finance Ministry, Belarus’ external debt amounted to $18 billion as of July.