BELARUS NEWS AND ANALYSIS

DATE:

12/05/2006

Newspaper: Kremlin Threatens To Cut Subsidies To Belarus

Russia is poised to cut vital subsidies to its heavily-dependent neighbour Belarus if the leadership in Minsk resists Kremlin plans for a unification of the countries, media in Moscow reported Friday.

President Vladimir Putin on May 9 gave instructions to prepare a cessation of favourable trade and financial terms for the republic, the business paper Kommersant reported, citing a Kremlin source.

There was no official confirmation by the Russian administration.

Russia subsidies, primarily in the energy, have driven the largely state-controlled Belarusian economy under the authoritarian President Alexander Lukashenko.

In contrast with other former Soviet republics like Moldova, Ukraine and Georgia that nurture ties with the EU before Russia, Belarus receives oil and gas at knock-down prices from its eastern neighbour.

Plans to unite the two countries have faltered in recent years as frictions emerged between Putin and Lukashenko.

After the Belarusian leader's re-election in controversial polls in March, Moscow announced a considerable increase in fuel prices.

Lukashenko, who is regarded as Europe's last dictator, still claims to support the idea of unification but is thought to be unwilling as it would certainly mean his exit from top office.

Meanwhile, unification would theoretically allow Putin to run as leader of the new country when his third and last term as Russian leader expires in 2008, according to the Constitution. The Kremlin chief has given repeated assurances that he will stand down.

c 2006 DPA

Source:

http://www.playfuls.com/news_0000000629_Newspaper_Kremlin_Threatens_To_Cut_Subsidies_To_Belarus_.html