MOSCOW - Russian President Vladimir Putin and his Belarusian counterpart Alexander
Lukashenko smoothed feathers over the introduction of a common currency and
a heated dispute over gas at a summit meeting.
After talks in the Black Sea resort of Sochi, southern Russia, on Sept. 15
Lukashenko confirmed that a common currency would be introduced on Jan. 1,
2005, completing the economic union between the two states.
Putin gave assurances that Moscow understood Minsk's misgivings and was
ready with a helping hand.
"If Belarusians feel like more work should be done, we must not pressure
them and hurry the process along," Putin said, explaining that the
currency's production would be up to both countries. "If there is not
enough, Russia guarantees it would help Belarus," he added.
Lukashenko, who wants to preserve his power while harnessing his
economically destitute state to its much larger and richer neighbor, has
resisted ceding monetary control to Moscow.
Commentators have also linked the recent decision by Russian gas monopoly
Gazprom to hike prices on its gas supplies to Belarus with Lukashenko's
reticence in adopting the Russian ruble in 2005.
The two leaders said they reached accord on the gas dispute that had
recently strained ties between Moscow and Minsk.
Putin stressed the need for "a change to market relations in this sector
without stopping talks on setting up a joint venture to build a common
pipeline," the Interfax news agency reported. The Russian president also
pledged to "consider Belarusian companies' participation in Russian gas
The conciliatory mood was an abrupt change from the situation prevailing
just before the talks, when Lukashenko lashed out at Russia over its
withdrawal of gas subsidies, warning Putin that it could irreparably harm
ties between the two countries and urging him to force the Gazprom gas
monopoly to reverse its decision.
Russia has sought to expand its economic presence in its diplomatically
isolated neighbor, ruled with an iron rod by Lukashenko, who has maintained
a socialist-style command economy and kept a tight lid on opposition and the
media. Gazprom in particular wants to take control of Belarus's state-owned
gas pipeline operator, Beltransgaz, which is now being privatized and is a
major conduit for Russian gas exports to Western Europe.
Gazprom boss Alexei Miller said the decision followed the "total freeze" of
talks on creating a joint company with Beltransgaz after Belarus refused to
allow Gazprom a controlling stake in the new company.
The two sides are also haggling over price ‹ Minsk values the company at $5
billion, while Gazprom insists it is worth only $1 billion.
Belarusian Economy Minister Andrei Kobyakov has warned that the end of the
Russian gas subsidies could prompt retaliatory measures, pointing out that
Minsk could hike its tariffs for the transit of Russian gas to Europe by 150
But Belarus, which is almost totally dependent on Russian gas for its energy
supplies, could lose up to $700 million a year by 2004 if Gazprom charges
the same price as for Latvia the newspaper Kommersant noted.
Some 60 percent of all Russian gas delivered to Belarus was sold at the
subsidized price of $30 per 1,000 cubic meters, as compared with a $50
tariff offered to Ukraine and $100 demanded from Western markets.