Page 72 - bne_Magazine_February_2019

72 I Eastern Europe bne February 2019
Belarus president Alexander Lukashenko accused Russia of using oil subsidies to annex his country
Belarus-Russia energy dispute snowballs
"Russia is willing to move further in the development of the Union State [between Belarus and Russia], which would include the establishment of
a common issue centre, a common customs agency, a common court and a common accounts chamber in the sequence specified in the [...] 1999 treaty on the formation of the Union State," Medvedev said. "In this respect, it is necessary to implement common tax and pricing policies in the areas that are beyond the competence of
the Eurasian Commission."
The statement has immediately trig- gered worries in Minsk over possible Moscow's attempts to launch a new eco- nomic, trade and military aggression in the region against its post-Soviet neigh- bour, which could follow the Kremlin's annexation of Ukraine's Crimea in 2014 and fuelling of the Donbas military uprising.
Multi-billion losses
The Russian government is about
to implement a crushing change for Belarus' battered state budget by cancel- ling exports of petroleum products. The so-called 'tax manoeuvre' in the Rus- sian oil industry envisages a gradual reduction in the rate of export duty on oil and petroleum products from 30%
to zero in the period from 2019 to 2024 and a proportionate increase in mineral extraction tax on oil production.
Minsk’s newly-appointed ambassador to Russia Vladimir Semashko said in November that the oil and gas negotia- tions with Moscow have brought little progress so far.
bne IntelliNews
Russia has refused to discuss with a high-level delegation from Minsk possible ways of compen- sating Belarus for its multi-billion losses from the so-called 'tax manoeuvre' in the Russian oil sector that will effectively cut energy subsidies to Belarus.
Russian Deputy PM Dmitry Kozak told journalists on December 13 that he did not consider it right to discuss this issue and the gas price issue "before funda- mental decisions are made on progress towards further integration between Russia and Belarus".
The end of the oil subsidies could derail the nascent Belarusian recovery and will cost Minsk billions of dollars in lost income. Belarus president Alexander Lukashenko caught the headlines over the weekend by claiming Russia was attempting to annex Belarus by using energy as a tool.
The Belarusian leader believes that under the pretext of "deep integration" Moscow wants to include his country in Russia. He stressed that he clearly
www.bne.eu
understands all the hints, but believes that sovereignty for Belarus is “sacred.”
“If they want us, as [Russian nationalist and LDPR leader Vladimir] Zhirinovsky proposed, to be made a regions and shoved into Russia, this will never happen. And if the leadership of Russia is thinking in these terms, this is to the detriment of Russia itself... For us, remember, sover- eignty is holy, ” the Belarusian leader said.
These statements appeared against a background of a meeting between Rus-
“The end of the oil subsidies could derail the nascent Belarusian recovery and will cost Minsk billions of dollars in lost income”
sian Prime Minister Dmitry Medvedev with his Belarusian counterpart Sergei Rumas in Brest the same day, who were discussing progress in creating a com- mon market under the auspices of the Eurasia Economic Union (EEU).
At the same time, Minsk and Moscow seek to secure energy deal by December 15. "There are doubts as to whether [an agreement will be reached] by Decem- ber 15, but we will agree sooner or later," he added amid growing worries in