BELARUS NEWS AND ANALYSIS

DATE:

01/06/2009

Russia may still lend to Belarus despite row: minister

Russia could still loan half a billion dollars to Belarus, Russia's finance minister said on Monday, after a bitter dispute over the loan led to acrimony between the two close allies.

Finance Minister Alexei Kudrin, quoted by Interfax and RIA Novosti news agencies, said "the possibility remains of issuing a 500-million-dollar tranche" as long as Belarus improves its economic situation.

The comments came after a tirade from Belarussian President Alexander Lukashenko in which he declared that his country would no longer "bow down" to its long-time supporter Russia.

Lukashenko's colourful outburst was prompted at least in part by the dispute over the loan, and it came amid moves by Minsk to improve ties with the European Union that have angered Moscow.

Last week, Kudrin said that Belarus had refused the next 500 million dollar (358 million euro) tranche of the multibillion-dollar Russian loan because it had insisted on receiving the money in dollars and not in Russian rubles.

On Monday, Kudrin called the Belarussian leader's reaction "unexpected" and said that talks on the possibility of Russia loaning the next tranche of the loan in dollars had not stopped.

Belarus -- which borders EU members Latvia, Lithuania and Poland -- has been a close ally of Russia since the Soviet collapse and has close military ties as well as a joint customs union with its giant eastern neighbour.

But in recent months it has joined the Eastern Partnership plan, an EU initiative to boost ties with six ex-Soviet republics that Russia regards with suspicion.

Source:

http://news.id.msn.com/business/article.aspx?cp-documentid=3351353

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