Economic integration

Russia, Belarus agree to closer energy and economic integration

MOSCOW, Sept. 9 (Reuters) – Russian and Belarusian leaders agreed on Thursday to build a unified oil and gas market and deepen economic integration in the face of what they see as unwarranted Western sanctions on the against their two savings.

The deal, reached after talks in the Kremlin between Russian President Vladimir Putin and Belarusian leader Alexander Lukashenko, is likely to be seen as Putin’s latest show of support for Lukashenko who last year used force to break huge demonstrations against his regime.

The West hit Belarus with sanctions to punish the authorities for the crackdown. Russia is also under Western sanctions for its treatment of Ukraine.

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Moscow and Minsk have long been officially part of a “state of union” and have had talks on further integration. This raised concerns from the beleaguered Belarusian opposition that Lukashenko would trade chunks of sovereignty in return for even greater Kremlin support for the West.

The two leaders said at a press conference that they had agreed on 28 integration roadmaps that covered common approaches to macroeconomic policies, including monetary policy, taxes and customs rules.

They also announced their intention to integrate their energy markets.

Putin said the two countries will sign a document before December 2023 to create a unified gas market and reach similar deals for oil and electricity.

He said Moscow would also leave its natural gas prices for Belarus unchanged at the current $ 128.5 per 1,000 cubic meters in 2022.

“And we are not even going to index the price of Belarus in terms of dollar inflation, although it is important,” Putin said.

Russia, which views the former Soviet republic of 9.5 million as a strategically important buffer for its west, has helped keep Lukashenko in power with loans and political support.

Such support has helped him overcome last year’s protests which were widely seen as the biggest challenge to his 27-year reign and were called in to try to overturn what the opposition called his rigged electoral victory.

Lukashenko denies that last year’s presidential election was manipulated in his favor.

Putin said Russia will provide Belarus with around $ 630 to $ 640 million in loans by the end of 2022.

He said the two countries were focusing on economic integration before discussing possible political integration.

The talks took place on the same day that Russia and Belarus officially opened large-scale joint military exercises, a week-long exercise on the territory of the two countries and in the Baltic Sea that alarmed some NATO countries. Read more

Putin said it made sense for Russia and Belarus to hold the exercises near their western borders given what he said were NATO steps to strengthen its presence in the wider region.

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Reporting by Vladimir Soldatkin, Andrey Ostroukh, Gabrielle Tétrault-Farber, Darya Korsunskaya and Tom Balmforth; Editing by Andrew Osborn

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