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Putin sees good prospects in Russia-Belarus ties

The Russian president said that Russian-Belarusian relations are strengthening and that bilateral trade will hit a record $24 billion this year.

"Relations between Russia and Belarus are extensive and keep growing. This year, I am certain, we will reach a new level in trade and economic ties - over $24 billion," Vladimir Putin told Belarusian President Alexander Lukashenko during his official visit to Minsk.

Lukashenko said he was surprised by the speculation provoked in the West by the Russian president's visit to Belarus.

"There is no [political] subtext here. We are meeting in Minsk as friendly allied states, and it would have been surprising if you had not come for an official visit," he told Putin.

The two countries are expected to sign an intergovernmental agreement granting Belarus a stabilization loan later on Friday, a Union State official said.

"A $1.5 billion stabilization loan will be granted for 15 years at an interest rate of libor +0.75% and with a grace period of five years," he said.

Belarus's government requested a loan in February citing rises in oil and natural gas prices imported from Russia.

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

In mid-May, Russian energy giant Gazprom [RTS: GAZP] signed a deal to purchase a 50% stake in Belarusian pipeline operator Beltransgaz for $2.5 billion.

Gazprom will make equal payments in four stages from 2007 to 2010, acquiring a 12.5% stake in Beltransgaz at each stage, which will ensure stable gas supplies to Central and Western European consumers.

RIA Novosti


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