Lukashenko met Putin but fate of $2bln loan still on table

8d87putin lukashenko loan Lukashenko met Putin but fate of $2bln loan still on table

Officially President Lukashenko came to Saint Petersburg to meethis Russian counterpart for a session of the Supreme State Councilof the Union State. The two heads of state have signed a number ofdocuments there, binding the neighboring countries across a broadrange of spheres – from joint budget to trade and culturalcooperation. The joint budget of the Union State is estimated at4.87 billion roubles, or around $160 million with Moscowcontributing 65% of it.“More than 40% of this money will help finance 38 jointprojects in high technology, telecommunication, aerospace andpharmaceutical industries,” Russian president Vladimir Putinsaid.Heads of Union State have also summed up results of trade andeconomic cooperation, where trade turnover grew by 9.6% and reachedits record high $43.8 billion compared to $38.6 billion in 2011 and$27.9 billion in 2010.Besides that, a number of other intergovernmental agreementshave been reached, but there has been no official information onwhat was rumored to be the initial goal of President Lukashenko’svisit to St Petersburg – Minsk has been negotiating with Moscow a$2 billion loan that it needs to modernize Belarus’ economy, orfive enterprises, in particular, in which Russian investors havetheir interest.Russia invests heavily in the Belorussian economy with Gazpromand Sberbank among the leaders. The total bankroll accounts for$5.74 billion with direct investment making the bigger part of it -$5.2 billion. Russian businessmen are involved in more than twothousand various organizations operating in the neighboringcountry. Belarus’ contribution to the Russian economy stands ataround $370 million.The loan that Lukashenko is asking for is in fact rumored to bedesigned to save Belarus’ national currency from collapsing. Minskhas to massively pay off its lenders in 2013-2014, primarily theInternational Monetary Fund for the credit it allocated in2008-2009. But with negative external trade balance there are nottoo many options on the table – cutting national gold reserves,devaluing national currency or asking for another loan. The IMF hascut all credit programs for Belarus, blaming it for “blindlyignoring” calls for economic reforms, so basically Russia is theonly lender left President Lukashenko can turn to for help.However Minsk can manage on its own if it carries out theprivatization of its state property worth $2.5 bln, Russia’sFinance Minister Anton Siluanov said Friday, talking to journalistsahead of the session. The minister confirmed the two countries werein talks over allocating the $2 billion loan and only said it wasan ongoing process. He noted, however, that the privatization of anumber of state companies was an obligatory move for Minsk if itwants to get help from EURASEC Anti-crisis fund.

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Lukashenko met Putin but fate of $2bln loan still on table


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