Updated at 17:19,07-01-2021

Russia Approves $1 Billion Loan Promised By Putin To Belarus

Belarusfeed

Russia Approves $1 Billion Loan Promised By Putin To Belarus
On Monday, 21 December, the governments of Belarus and Russia signed an agreement on the provision of a $1 billion loan to Belarus, the press service of the Belarusian Finance Ministry reported. It will be transferred in several tranches.

According to the terms of the agreement, the first tranche of the loan in an amount equivalent to $500 million will be provided to Belarus by the end of 2020, the second tranche for the same amount – in 2021. The funds will be allocated in Russian rubles, the Ministry of Finance of Belarus specified.

“To approve the draft agreement between the government of Russia and the government of the Republic of Belarus on the provision of a state financial loan to the government of the Republic of Belarus, submitted by the Russian Ministry of Finance, agreed with Russian Foreign Affairs Ministry, Russian Ministry of Economic Development and the state development corporation VEB.RF,” reads the statement of Prime Minister of Russia Mikhail Mishustin.

It is known that Belarusian state debt owed to Russia as of mid-2018 was $ 6,3 billion and 60 billion Russian rubles (which at that time was equivalent to $1 billion). A year later, Minsk’s debt remained almost unchanged.“Russia promises to give this money to the Belarusian authorities so that they pay off Russian debts. This can be viewed as insurance against Belarus declaring a default. If the Belarusian authorities suddenly declare a default, then Russia will not receive any money at all.

And this is more than 10 billion, which they gave to Lukashenko over the past ten years. If one gives the current government some money so that it does not declare itself in default, then one may come to an agreement with the new government later. They recognise the new government if it recognises the debts,” explains a financial analyst.

Recall that Russian President Vladimir Putin at a meeting with Lukashenko in Sochi in September promised Belarus a loan of $ 1,5 billion. In October, the Russian-controlled Eurasian Fund for Stabilization and Development transferred a $500 million loan to Belarus. According to the Russian Ministry of Finance, Belarus needs additional funds to finance the projected deficit of the consolidated budget, as well as to ensure high-quality medical care and balanced fiscal policy.