Russia denies Belarus $500-million loan

Russia will not provide a $500-million loan to Belarus, Russian Finance Minister Aleksei Kudrin said on the sidelines of the International Monetary Fund (IMF)’s annual meeting in Istanbul on October 5.

Moscow agreed to lend Belarus $2 billion in late 2008 and has made available $1.5 billion since but now looks set to withhold the final $500-million tranche.

"We are not considering the continuation of the loan for Belarus. We will not make it available on the bilateral basis," RIA Novosti quoted Mr. Kudrin as saying.

The Russian minister said that Moscow also would reject Ukraine’s request for a $5-billion loan but would work to help both Kyiv and Minsk obtain more loans from the IMF, as well as help Minsk borrow from the Eurasian Economic Community (EURASEC)’s recently established Anti-Crisis Fund.

The Belarusian government has been implementing nearly all of the reforms agreed upon in the framework of its stand-by arrangement with the IMF, according to Mr. Kudrin.

Speaking in Istanbul, the Russian minister expressed hope that the economic reforms in Belarus would "bear fruit."

In an interview with the BelTA state news agency on October 5, Belarusian Finance Minister Andrey Kharkavets said that Belarus would continue talks with Russia on the loan tranche. "The agreement that the Russian Federation will provide the loan has not been cancelled. There was a request from us and we have not changed our approaches so far," he was quoted as saying.

Mr. Kharkavets noted that Minsk had been offered to borrow the amount from the EURASEC Anti-Crisis Fund. "This can be implemented in theory but at present the fund is not working," he stressed.

There are still no international procedures in place for a country to approach the fund and the latter does not have enough money so far, Mr. Kharkavets said. "These are mandatory conditions that must be fulfilled before we can ask the fund for money. However, we haven’t yet even applied to the fund," he added.

"We understand this initiative by Aleksei Kudrin. But in this case we see many technical aspects that do not contribute to the resolution of the issue. And the top-level agreements regarding the loan are of a different nature: the loan was to be provided by the Russian Federation’s government, not by the EURASEC fund," the Belarusian minister said.