BELARUS NEWS AND ANALYSIS

DATE:

15/12/2006

Russian, Belarusian leaders meeting in Kremlin - 1

MOSCOW, December 15 (RIA Novosti) - The presidents of Russia and Belarus are meeting in the Kremlin Friday, with talks on the future of the Union State among the subjects to be discussed.

Vladimir Putin and Alexander Lukashenko are expected to approve the Union State's 2007 budget at a session of the Supreme State Council of the Russia-Belarus Union, which will focus on integration.

The two ex-Soviet neighbors have been in talks since 1997 over a Union State with a common economic, customs and political space, but the negotiations have been complicated by a host of issues, including energy and financial disputes.

Belarus' main energy supplier, Russia, announced Tuesday the imposition of an oil export duty for Belarus at $180.70 per metric ton as of January 2007.

Russia has sought to prevent losses being inflicted on its budget from crude deliveries to its ex-Soviet neighbor. Belarus refines oil and re-exports it to third countries, paying no taxes to the Russian budget.

Russian officials said the volume of crude supplied to Belarus significantly exceeds the country's domestic needs, encouraging re-exports.

The introduction of tariffs is a follow up to Moscow's move to raise nearly four-fold the gas price for Belarus as of 2007. The country currently pays the lowest post-Soviet rate of about $50 per 1,000 cubic meters.

The move, which would affect the struggling Belarusian economy, prompted bitter remarks by President Alexander Lukashenko, who said Belarus and Russia, as members of the Union State, should enjoy similar energy prices.

Russian energy giant Gazprom has offered to partially compensate Minsk for the price hike if Belarus' Beltransgaz were to sell it its main gas pipelines, which pump Russian gas to Europe.

The countries are reportedly considering joint ventures to run the pipelines.

Speaking on the sidelines of a summit of post-Soviet leaders in Belarus' capital Minsk in November, Russian President Vladimir Putin said: "Gazprom and Beltransgaz will set up joint ventures on a parity basis."

Russia exported 19.3 million tons of crude (141.86 million barrels) and 20.2 billion cubic meters of natural gas to the country in 2005. Deliveries this year are expected to exceed the 2005 figures.

As part of the unification plan, Russia and Belarus have also been seeking to introduce a common currency, but the question of currency issuing centers remains the main stumbling block in the negotiations.

The introduction of the Russian ruble as a single currency has been postponed many times since negotiations to re-establish a union began in 1997. Talks have been complicated by a host of issues, including energy disputes and a tug-of-war between the leaderships.

Albert Stepanov, deputy state secretary of the Russia-Belarus union, told journalists earlier that Russia sees the Central Bank as a single issuing center under the management of the unified bank's board, while Belarus is insisting on setting up two issuing centers, in Moscow and in Minsk.

Differences between Moscow and Minsk continued to grow Wednesday as the Belarusian election authorities complained about Moscow changing its election laws and thus hindering legal harmonization within the union state project.

"So long as we rewrite laws and alter the legal structure inside each country, the gap between us will continue to widen, and that is great danger," Lidiya Yermoshina, head of Belarus' Election Commission, told a conference on the development of the Union State in Moscow.

Russia recently abolished the 20% threshold for voter turnout, canceled early voting and the "against all candidates" option on election ballots at all levels, but Yermoshina said her country was not ready to follow suit.

Yermoshina said Belarus was ahead of Russia in terms of forming a common legal base for the Union State. "But we cannot rewrite our draft laws every time to suit Russia's volatile election laws," she said.

Source:

http://en.rian.ru/russia/20061215/56976187.html