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December 21, 2018 www.intellinews.com I Page 3
Vladimir Putin during an EEU summit in Saint Petersburg.
"I draw attention to the fact that today the price is $129 per 1,000 cubic metres for Belarus and will be $127 next year, while it is $250 for Germa- ny," Putin said during the event. "This is certainly a great advantage for our allies within the EEU, although we should definitely try to make prices completely the same. But this requires time and a different degree of integration between our countries, which is a subject of negotiations."
"You are right, but our main trading partner is not Germany but Russia, and it is important to us that there are equal conditions, primarily in Belarus and brotherly Russia," Lukashenko fired back immediately, adding that Belarus advocates the comprehensive and unconditional fulfilment of obligations by all the EEU member countries, according to BelaPAN news agency.
Lukashenko underlined that an agreement had been reached to create single markets of natural gas, oil and petroleum products within the EEU by 2025.
"We made this decision and we have to do eve- rything within the set timeframe and ensure that there are stable and fair conditions in the fuel and energy sectors within the EEU," he said. "There are no interests of suppliers and consumers of energy resources in allied relations. There is an integral system – the Eurasian Economic Union."
He said that he completely agreed with the Russian president that it was necessary to develop new areas of cooperation, including
in the fields of nuclear power and renewable sources of energy. "But the lack of consensus on
principles for creating a single market of oil and gas does not allow the EEU to progress at a faster pace," Lukashenko added.
'Plan B'
In November, the International Monetary Fund (IMF) warned the Belarusian government to pre- pare "contingency plans" if energy negotiations with Russia fail. "Although the government sees a low probability of less than full compensation for the tax manoeuvre losses, contingency plans would be helpful if such an event were to materi- alise," the IMF said in a statement.
According to the multinational lender, in such an event, oil-refining activity would be reduced, dampening export revenue and growth. Tax rev- enues would also be hit due to lower economic activity, lower transfers from Russia, and lower customs duties.
The policy response should aim to mitigate the impact on the balance of payments and facilitate the reallocation of resources in the economy, including structural reforms. "The loss of energy discounts would underscore the need for faster and deeper reform to boost productivity in SOEs, not least in the refineries," the statement reads.
Meanwhile, the IMF believes that exchange rate flexibility to allow the needed adjustment in the balance of payments, supported by fiscal discipline to refrain from untargeted and costly subsidies to the refineries, and with additional measures as needed to maintain debt in a downward trajectory.
At the top of that, tighter monetary policy to main- tain inflation within target and limit undue volatil- ity in the foreign exchange market, the multina- tional lender added.