Stabilization loan: slow-motion negotiations continue

The next round of the Belarus-Russia talks on credit and financial cooperation was held on 11 April in Moscow.

During the meeting, the parties have identified measures, which could be implemented within the framework of the mid-term economic policy for Belarus, and also agreed to hold consultations between representatives of the Ministry of Finance and the National Bank of both countries in the Russian Finance Ministry starting on 14 April.

Comment

Russia delays the issuance of the stabilization loan to Belarus, forcing the country to accept certain conditions. Namely, unification of economic policies aimed at reducing amounts of subsidies, grants and use of other non-market instruments of economy stimulation, devaluation of the Belarusian ruble and privatization. Obviously, the positions and interests of both countries often differ radically. For instance, the Belarusian National Bank insists on senselessness of devaluation, while Russia considers it justified and offers to discuss it in numbers and speed rate. Belarus wishes to receive an “adequate” price proposal for its assets, while Russia proposes to make non-monetary exchange of shares (an exchange of assets within the holdings). Belarus is not ready to give up on credits and subsidies to state-owned enterprises to maintain high growth rates (which is almost never used in Russia).

At the same time, Russia could not but support the country it created the Union State with. Therefore, in the near future (April-May), Belarus will receive a $ 1 billion loan, while another $ 2 billion of stabilization loan in the framework of EurAsEC will be torpedoed by Russia.