Source AP ©

Belarus president pledges to pay USD 460 million gas debt to Russia - 2 August, 2007

The Belarusian president said Thursday his country will pay $460 million (EUR 337 million) to settle its gas debt to Russia in the next few days and that the president of Venezuela may help to pay the bill, the Interfax news agency reported.

"Today I ordered money taken from our reserves and payment of $460 million," President Alexander Lukashenko said.

On Wednesday Gazprom threatened to cut natural gas supplies to Belarus by nearly half unless the debt was repaid by Friday.

"Of course, we are draining our resources, but our good friends, in particular (Venezuelan President) Hugo Chavez, said they are ready to extend a loan at advantageous terms," according to Interfax. He added that western banks were also prepared to provide funds.

"Today we pay from our reserves but loans will replenish them within a month. Let them take it and live in peace," Lukashenko said.

The announcement triggered bitter memories of a pricing dispute with Ukraine that saw supplies to the EU drop in the first days of 2006 as Ukraine siphoned gas from a transit pipeline after Gazprom halted direct shipments.

Gazprom supplies a quarter of the gas used by Europe, and the incident drove home Europe's dependence on Russia for energy.

In a statement Thursday the European Commission called on Russia and Belarus "to find swiftly an amicable settlement ... and in any event not to disturb, neither directly nor indirectly, the gas supply to EU Member States."

Over 20 percent of Russia's gas supplies to Europe go through Belarus, reaching buyers in Germany, Poland, Lithuania and Ukraine as well as the Russia's Baltic enclave of Kaliningrad.

The current gas standoff grows out of a hard-fought deal signed in the last minutes of 2006 that obliged Belarus, to pay US$100 (EUR 73) per 1,000 cubic meters of gas instead of US$46 (EUR 34).

The agreement allowed Minsk to pay US$55 (EUR 40) per 1,000 cubic meters for the first half of the year, but required payment of the balance of US$456 million (EUR 334 million) to Gazprom by July 23.

When the bill was submitted to Congress on August 2, the reason for imposing the new sanctions on Russia was based on Russia's alleged interference in the US presidential election in 2016, but then something clicked

US sanctions to kill Russian banks and sovereign debt?
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