On the way to becoming a union state: Putin controls Lukashenko more and more

On the way to the Union state
Putin controls Lukashenko more and more

By Denis Trubetskoy, Kiev

Putin and Lukashenko actually wanted to meet in Minsk today to talk about the integration of their two countries into a “union state”. The project has been running for years. It now forms the framework for Lukashenko’s dependence on Putin.

The real meeting is canceled. If Russian President Vladimir Putin speaks to his Belarusian colleague today, it will only be in a virtual meeting. Originally, Alexander Lukashenko wanted to greet Putin in Minsk today, on Russian Unity Day, a public holiday. Instead, the Russian President visits Sevastopol, the base of the Black Sea Fleet in the annexed Crimea.

In terms of content, the video conference is about 28 programs to deepen mutual integration. The so-called union state of Russia and Belarus has existed since 1999, so far more on paper than in political reality. However, Belarus is becoming more and more dependent on Russia’s economic support.

The so-called Union programs have been drawn up since 2018, when they were still called “Road Maps”. Its aim was and is to accelerate the longstanding integration process of the countries. Originally there were 31 such programs, which both sides agreed on in principle in September 2019. Although its contents were still officially unknown at the time, there were rumors that one of them was about political rapprochement between states and the creation of supranational, joint authorities.

At the time, this caused a wave of outrage in Minsk and the surrounding area. The Belarusians expressed concern above all because the creation of a common currency or a genuine Union parliament could mean the loss of Belarusian independence. In response, the road maps were renamed “Union Programs” and their number was reduced to 28.

First economic, then political integration

These programs did not play a significant role until the Belarusian presidential election in August 2020. That changed when the West did not recognize Lukashenko’s questionable election victory and the Belarusians demonstrated en masse against the president, who has ruled since 1994. He was now forced to work even closer with Russia, and Putin always gave him public support – even if Lukashenko is considered an unreliable partner in the Kremlin. Putin therefore insists on a constitutional reform that would limit Lukashenko’s power. This should also be discussed today. So far, however, there is no trace of a proposal that would satisfy Russia.

The Union programs are not only intended to consolidate economic concessions to Minsk, but also to bring Belarus under even greater Russian control. The political integration that was widely suspected prior to the meeting between Putin and Lukashenko on 9 September is supposedly not yet at issue. “We assume that for political integration an economic basis is necessary in order to continue on this political path,” Putin said in September.

What is it specifically about? By 2023, the main aim of the Union state is to standardize economic legislation, pension and tax systems, a common financial market and a common macroeconomic policy. Difficulties arose with the agreement on a uniform gas market and a common tax system. As part of the new agreements, Moscow pledged Lukashenko the lower gas price of the current year for 2022 as well. The signing of the final agreement on the common gas market is not expected until December 1, 2023.

Lukashenko’s debt to Russia is growing

Basically, Minsk claims to purchase Russian resources at domestic prices while avoiding the additional production costs, which is unfavorable for the Kremlin. According to various estimates, this could save Belarus more than a billion US dollars a year. But even now the purchase price for Minsk is at least three times lower than for the EU countries.

First and foremost, however, Lukashenko is hoping for new loans. By the end of the year, Minsk will in fact receive $ 630 million from Russia, the last part of a $ 1.5 billion loan committed last year on top of its previous debt of approximately $ 8 billion.

It is doubtful that Russia is permanently financing the Belarusian economy in the course of deepening integration without benefiting from it itself. The integration in the area of ​​taxes and customs is particularly exciting for Moscow. If Russia gets access to the Belarusian tax system, it can prevent, among other things, common machinations such as the resale of Russian petroleum products under the guise of other goods. Even if political integration is initially left out and the practical implementation of economic integration is likely to take several years, the actual exchange is clear: Lukashenko’s loans and gas discounts for a clear pro-Russian course with a prospect of more.

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