Thursday, December 31, 2009

Belarus Falling Out With Russia

Once not long ago, the leaders of Belarus and Russia fawned over each other and talked glowingly of their coming fusion in one union, with even one currency.  Those days are fading now as relations fray and the EU and Washington nudge into the picture, trying to pry away away one of Moscow's last true allies.   The latest sign of souring relations is the failure of Moscow and Minsk to agree on oil deliveries for 2010.

On the last day of the year, the two sides announced no agreement had been reached.

To the relief of people in Germany and Poland, spooked by the possibility of another oil cutoff like the one in 2007 in a similar spat, Moscow said oil supplies will not be cut to Belarus despite the lack of an agreement. 

Belarus gets some 400,000 barrels of oil a day from Russia through the Druzhba pipeline.  Interestly, most of that oil doesn't go to the folks at home.  Belarus refines most of the oil and sells those refined products to the West. 

A source close to the talks said the Belarusians are taking a tough, almost unrealistic, stance. 

Minsk wants not only duty-free oil for fuel consumed in the country, but for all Russian crudge supplied to the country.

"The Belarussian side is de facto sticking to absolutely groundless demands that Russia must continue subsidising its economy," Interfax and RIA Novosti agencies quoted the source as saying.

It's hard to criticize the Russians for being more than fair with the Belarusians.

Moscow has agree to raise gas prices to Belarus by only 12 percent to $168 per 1,000 cubic metres in 2010, much lower than any Russian gas customer in Europe or the former Soviet Union pays.

Late December 31, the Belarus government said Russia was going ahead and imposing tariffs. According to Interfax, Minsk denounced the "unprecedented pressure" put on its delegates due to hold talks in Moscow.

Ominously, a source in Minsk said, "Russia's offers practically torpedoed the customs bloc set up by Russia, Belarus and Kazakhstan" due to be launched July 1."

Belarus leader Alexander Lukashenko feels he's holding a strong hand.  No longer is Moscow his only suitor.

Now Brussels has come calling. 

In May at a landmark summit in Prague, the EU announced its ambitious "Eastern Partnership" to accelerate political association and further economic integration" between its 27 members and Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine.  Politicospeak aside, Brussels is willing to shell out 600 million euros for the program.   

European Commission chief Jose Manuel Barroso said at the time the program was not aimed "at building new areas of influence."

If you believe Barroso, it's all just European do-gooding, and altruistic, meant to increase "stability and prosperity."

Who could have a problem with that?  Moscow for some funny reason feels Brussels in concert with Washington and its ever expanding NATO and military bases, are bent on boxing in Russia.

Not coincidentally, all the states in the "partnership" are key energy and pipeline players.  "Energy security" is a top EU priority.  NATO has made energy security one of its new 21st tasks.

Lukashenko has ruled Belarus's 10 million people since 1994, and has been dubbed Europe's last dictator.

To scrub up his image, however, Lukashenka has hired a well-heeled British p.r. firm. 

It seems to be having an effect. 

Last month, the EU suspected sanctions against Belarus, however, one the condition, a whopper, that it improves democracy, human rights and the rule of law. 

Lukashenka, however, likes to do the dictating not be dictated to.

Always good for a colorful quote, Lukashenka said Dec. 30, "I said to the Europeans, if you plan on continuing this policy, this game of game of cat and mouse with us, say so."

That same day, Lukashenka came out with a headline-worthy announcement that his country would build a nuclear power plant

He said the plant would be built in Ostrovets in western Belarus near the Polish border.

Puffing up his chest, Lukashenka said the plant will make Belarus not only less dependent on Russia, but the EU, too.

It could all turn out to be a bluff, but Lukashenko is playing his hand to the hilt.  Question is whether he's overplaying it?
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