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Belarus won't pay with state property for Russian loan - Lukashenko

January 08, 2008 | RIA Novosti

Belarus's president said Sunday he did not promise to pay for the Russian $1.5 billion loan with state property.

Russia and Belarus signed December 20 an intergovernmental agreement to grant Minsk a $1.5 billion stabilization loan. The agreement was reached at bilateral talks in Minsk a week earlier. The loan has been granted for 15 years at an interest rate of libor +0.75% and with a grace period of five years.

"There can be no talk with Lukhashenko about renouncing sovereignty or becoming part of another country... No property will be given away," the controversial leader, dubbed by the U.S. "Europe's last dictator", told journalists.

"Lukashenko was not on his knees when asking for a loan," he added. "We will sell shares and privatize our enterprises honestly and openly."

Lukashenko said the loan is beneficial for Belarus. "We were given a loan for 15 years with a grace period of five years and at a normal interest rate. It is beneficial for Belarus," he said.

The Belarusian president said China and Venezuela are ready to grant Belarus $2 billion loans each.

Belarus requested the $1.5 bln loan from Russia in February to pay for energy supplies.

On January 1, 2007, Russia raised the price of its gas supplies to Belarus to $100 per 1,000 cubic meters from $46.7 in 2006. The increase sparked an energy dispute between the two countries and triggered more accusations in Europe that Russia was using oil and gas as a political weapon.

Russia and Belarus, the ex-Soviet neighbors, have been in talks since 1997 over building a Union State, but the negotiations have been complicated by a host of issues, including energy and financial disputes, as well as division of power.

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