BELARUS NEWS AND ANALYSIS

DATE:

30/04/2009

Belarus seeks more loans - foreign minister

* Belarus seeks more loans to cushion economy

* Credit crunch hitting country's exports

* Minister hails new climate in relations with EU

By Adrian Croft

LONDON, April 30 (Reuters) - Belarus is seeking more international loans to help its economy deal with a slump in exports caused by the credit crunch, Foreign Minister Sergei Martynov said on Thursday.

Belarus escaped the initial effects of the global financial crisis but its exports are now being hit because customers were having trouble obtaining credit, Martynov told Reuters in a telephone interview from Minsk.

Belarus has negotiated a $2.4 billion loan from the International Monetary Fund and a $2 billion loan from Russia.

"We are working to have further loans because we want to have a cushion of security in our economy," Martynov said.

"The economy cannot just stop running, even though our customers have problems with paying for our goods, so we are working to have credit facilities ...," he said.

He said Belarus was seeking international credits from "different sources" but gave no details.

Belarus's central bank deputy chairman Vasily Matyushevsky told Reuters this month Belarus had approached one of its European trading partners with an offer of a currency swap as a way of boosting reserves and stimulating trade.

The central bank has raided its coffers to support the Belarussian rouble, under pressure from sharp falls in exports, which were down nearly 50 percent in January and February.

Belarus's need for help to overcome the financial crisis was not the reason why it was seeking closer relations with the European Union, Martynov said.

NEW CLIMATE

Two major developments this month have marked a significant opening in Belarus's relations with western Europe.

Belarussian President Alexander Lukashenko, long shunned in the West, was given an invitation for his country to attend an EU summit with ex-Soviet republics in Prague next month.

Then Lukashenko ended more than a decade of diplomatic isolation this week by travelling to Rome to meet Pope Benedict and Italian Prime Minister Silvio Berlusconi.

For years, Lukashenko faced Western accusations of human rights abuses and the United States once labelled ex-Soviet Belarus the "last dictatorship in Europe".

Since arguing with ally Russia in 2007 over energy prices, Lukashenko has tried to improve relations with the West.

Martynov said Lukashenko's visit to Italy was a "very important indication of a new climate" in EU-Belarus relations.

He said Belarus would attend the EU's May 7 "Eastern Partnership" summit, which will discuss aid to the six former Soviet republics, but said no decision had been taken on whether Lukashenko or someone else would lead the delegation.

Belarus was working with the European Commission to make sure the "Eastern Partnership" was "not just a political shell, but a meaningful, project-oriented exercise," he said.

Belarus and the EU had an "obvious mutual interest" in developing a much closer relationship in areas such as energy transit, illegal migration, fighting organised crime, agriculture and the environment and Belarus hoped to negotiate a partnership and cooperation agreement with the EU, he said.

But he said Belarus was not going to choose between Russia and the European Union as its main ally.

The EU has suspended sanctions against Belarus but any EU-Belarus cooperation agreement is likely to depend on improvements in human rights in the country. (Additional reporting by David Brunnstrom in Brussels; Editing by Andy Bruce)

Source:

http://www.guardian.co.uk/business/feedarticle/8482698

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