December 22, 2008 / 6:58 AM / 9 years ago

No word of breakthrough in Belarus-Russia gas talks

MOSCOW (Reuters) - Belarussian President Alexander Lukashenko failed on Monday to secure a firm promise of preferential gas prices from Russia in 2009 despite warning the Kremlin that undermining its ally’s economy could backfire.

Low gas prices and financial help from Moscow are crucial for Lukashenko’s efforts to keep afloat the economy of Belarus, a former Soviet republic which is Russia’s partner in plans to build a Slav “union state.”

Belarussian officials had said before Lukashenko held talks with Russian President Dmitry Medvedev that they were counting on a price of $160 per 1,000 cubic meters of Russian natural gas in 2009 compared with the current rate of $128. Russian officials have suggested the price will be no less than $200.

Interfax news agency quoted an unnamed source in Lukashenko’s delegation as saying: “We agreed a price which is quite acceptable for Belarus.”

But no figure was announced, and the Kremlin account of the talks signaled Lukashenko had not achieved the breakthrough he had hoped for.

“An agreement was reached during the talks about the main principles of work as far as supplies of gas and payment for next year are concerned,” Medvedev’s spokeswoman Natalya Timakova said.

She gave no details but a Kremlin source told Reuters: “It will certainly be a market price.”


Pressed hard by economic problems, Lukashenko has asked Moscow for emergency loans and wants Russia to hold off on plans to raise the gas prices in 2009. But he said his country was not asking on bended knee.

“I want to dispel insinuations that Belarus is all but crawling to the Kremlin on its knees to ask for something ... We are not at all going to ask for anything today,” Lukashenko said at the start of the meeting with Medvedev.

“But if the Belarus economy halts, that will mean 10 million more fully or partially jobless in Russia ... I do not think this is in the interests of either Belarus or Russia. In that sense we are seeking support from Russia.”

Lukashenko has alarmed Moscow in recent months by making political overtures to the West, where he has been ostracized for years over his record on democracy.

He has not recognized the independence of South Ossetia and Abkhazia, two rebel regions at the heart of Russia’s brief war with Georgia in August. He has said parliament will examine the issue, but it has taken no action.

The war and Russia’s recognition of the two provinces drew international condemnation and only Nicaragua has followed Moscow’s example in recognizing South Ossetia and Abkhazia.

Russian Deputy Finance Minister Dmitry Pankin said separately that Belarus had asked Moscow for a 100 billion rouble ($3.61 billion) loan if Minsk switches to accounting for bilateral trade in roubles.

Russia gave Belarus a $2-billion preferential loan this year. Minsk also hopes to win an International Monetary Fund credit.

Russian business newspaper Kommersant suggested on Monday Belarussian recognition of South Ossetia and Abkhazia could be part of the trade-off. It also said Minsk could offer to sell Russia a stake in its state gas transit firm Beltransgaz.

Neither leader mentioned the issues in their public remarks.

Additional reporting by Dmitry Solovyov, editing by Timothy Heritage and Elizabeth Piper

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