Source Pravda.Ru

Russia to continue supporting Belarussian economy, Putin says

President Vladimir Putin on Monday hailed an agreement that ended a bitter oil dispute with neighboring Belarus, saying it meant a reduction in subsidies by Moscow for the ex-Soviet ally.

Putin said the deal would prompt the Belarusian government to carry out free-market reforms.

"Russia will continue to provide direct or indirect support of the Belarusian economy for a long time to come, but its volume will be reduced significantly beginning this year," Putin told his Cabinet in televised remarks.

The spat between the two formerly close allies ended Friday when the countries' prime ministers reached agreement on export duties, transit fees and other disagreements that resulted in Russian shutting off oil to Belarus last Monday, disrupting supplies to Germany, Poland and other European countries.

The halt added to European fears about Moscow's reliability as an energy supplier - a reputation that had already been damaged by last year's price dispute with Ukraine and temporary shortages of Russian gas to European customers.

Both disputes and energy price hikes for other ex-Soviet nations have drawn criticism of Russia from Western nations, which have accused Moscow of using its vast mineral wealth as a political weapon, the AP reports.

Under the agreement reached Friday, the two countries agreed to lower Russian export duty by about 70 percent. Also, Russia will get the lion's share of profits from refined oil products Belarus makes using Russian oil and then sells to Europe.

Belarus' authoritarian president, Alexander Lukashenko, has long been a pariah in the West for extending his rule through flawed elections and stifling dissent. He has relied on cheap Russian energy resources and resisted free-market reforms.

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