No compensation. Belarus should appreciate Russia’s loan support – PM Medvedev

MOSCOW, RUSSIA – JANUARY 7, 2019: Russia's Prime Minister Dmitry Medvedev crosses himself during a Christmas liturgy at the Cathedral of Christ the Saviour. The Russian Orthodox Church celebrates Christmas according to the Julian calendar. Sergei Bobylev/TASS

Moscow never promised any compensation for the losses from the Russian tax maneuver to Minsk, Russian Prime Minister Dmitry Medvedev said on Monday.

He urged Belarusians to ‘appreciate’ Russia’s poviding their country with loans.

“Of course, we realize why they are concerned, and the talks on the subject are still in progress. But I want to reiterate that we never promised to compensate for other countries’ revenues that they have not received, even if we consider these countries our closest friends,” he said during a meeting with deputy prime ministers.

According to the Russian PM, Moscow is lending massive credit support to Belarus while it has no access to the Western financial markets, and Minsk should appreciate it.

The loans provided total to $6.5 bn, excluding those for the construction of a nuclear power plant in Astravets, he stated.

In his opinion, Russia is helping Belarus at the expense of its own economy.

“We do not demand the back of these loans, we may extend their terms at the request of our partners when. I would stress once again – the financial markets of Western countries remain closed for you,” Medvedev added.

Earlier, Belarusian president Alyaksandr Lukashenka warned Russia might lose its ‘only ally in the western direction’.


At the end of 2018, the Belarusian-Russian relations significantly deteriorated. In late December there were some meetings of Alyaksandr Lukashenka and Vladimir Putin. The Russian leader pressed for ‘further integration’ while his Belarusian counterpart insisted on reducing gas prices and getting compensation for the tax maneuver. The talks seem to have ended in deadlock.

The tax maneuver. Russia counts on completing it by 2025. It provided for a gradual zeroing of export duties on oil and an increase in the tax on the extraction of natural resources. The tax maneuver is not in the interests of the Belarusian budget, since it entails an increase in the price of oil for Belarus. This will result in the Belarusian refineries receiving raw materials at world prices and losing their advantages over competitors outside the Eurasian Economic Union. According to Belarusian Finance minister Maksim Yermalovich, Russia’s tax maneuver is likely to result in Belarus’ losing BYN 630 mln in 2019 and $8-12 bn by 2024 unless the problem is resolved through negotiations and compensations are awarded. However, the Russian side keep refusing to provide any compensation.

Gas price. today Belarus paid $129 per 1,000m3 of Russian natural gas in 2018 and id to pay $127 this year. The price for gas Belarus will purchase in 2020 has not been settled yet. According to Alyaksandr Lukashenka, Gazprom charges nearly $3 per 1,000m3 per 100km for transporting natural gas from Yamal-Nenets Autonomous District all the way to the Belarusian border while the internal Russian tariff is about $1. Due to these circumstances natural gas at the border with Russia’s Smolensk Oblast is priced at nearly $130 per 1,000m3 while the wholesale price for consumers in Smolensk Oblast is $70 or nearly half of what Belarus pays. “A simple question: how are we supposed to compete in this situation?” Lukashenka wondered. However, Moscow will be ready to give credence to him if Belarus complies with the so-called Medvedev’s ultimatum.

Medvedev’s ultimatum. The topic of integration and the creation of a union state under the 1999 treaty was widely discussed after the statement by Russian Prime Minister Dmitry Medvedev in December last year in Brest.

“I want to emphasize: Russia is ready to continue to move along the path of building the Union State, including the creation of a single emission center, a single customs, court, and a chamber of accounts in the manner prescribed by the agreement on the creation of the Union State of December 8, 1999,” said Dmitry Medvedev during the Union Council of Ministers in the city above the River Buh.

Alyaksandr Lukashenka became outraged by the statement. “I no longer say a brotherly state, because, as they report to me, in Russia this is not perceived as such. Apparently, new people came [to power] for whom this concept is unacceptable. Well, then we will be partners,” he said.

‘Stupid questions’: Belarus president about uniting with Russia

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