BELARUS NEWS AND ANALYSIS

DATE:

10/01/2007

Russia and Belarus remain at loggerheads

Russia and Belarus remained at loggerheads today in a damaging row that has severely disrupted the flow of Russian oil to Europe as a news report said that Moscow was considering major retaliatory steps to force its neighbour into submission.

Some Russian media and analysts said that the Kremlin appeared determined to tough it out, despite the damage to Russia's reputation as a key energy supplier to the European Union, which has strongly criticised the shutdown of a pipeline that transports crude to Germany and much of Eastern Europe via Belarus.

Taking a harsh stance yesterday, Russian President Vladimir Putin ordered his government to work out a set of measures aimed at Belarus to protect the national economy.

Putin also ordered his Cabinet to consider a possible reduction in oil output - an indication the stand-off could drag on.

Russia has a limited capacity for refining oil and would have to cut crude output if its exports decrease suddenly.

The Vedomosti business daily today reported that Russia was planning to impose duties on more than half of Belarusian imports, in what would deal a heavy blow to Belarus' inefficient, state-dominated economy.

Source:

http://www.sbpost.ie/breakingnews/breaking_story.asp?j=4390935&p=439x95x&n=4391027&x=