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You're reading: Moscow turns the screw on Belarus

Note that the market assumption had been that Moscow might provide a one-off $1 billion loan, with $2 billion also provided by the EurAsEc entity in addition. Kudrin indicated that the $3 billion loan package might not be enough and that the authorities in Minsk may need to look into other financing options, including raising funds from state asset sales – the figure of $2 billion was mentioned – plus perhaps even seeking financing from the International Monetary Fund.

Russia wants access to real assets in Belarus, which the government in Minsk is not willing to dispose of cheaply.

Net-net, the news is disappointing, suggesting that both sides are still playing very hard to get. Russia wants access to real assets in Belarus, which the government in Minsk is not willing to dispose of cheaply. Russia seems to have given the authorities in Minsk, the minimum it could while still maintaining the façade of solidarity within the CIS Economic Union which Moscow is still trying to forge. Interestingly, Eurobond prices have rallied on the news, but disappointment will likely eventually set in as the reality dawns that the financing made available via Russia falls significantly short of the mark.

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