Finance Minister of Russian Federation: “We can face Belarusian economy’s non-creditworthiness”

Alexei Kudrin has stated that pumping with loans could make an irreversible effect on Belarus.

Alexei Kudrin has said that issuing of the second $500 million installment in a loan to Belarus could be decided upon only after Russia would assure itself of Minsk’s adequate actions, RIA Novosti informs.

The statement has been made by Kudrin when addressing journalists before the session of the Council of Ministers of the “union state”. Kudrin hasn’t explained what is meant by “adequate actions”.

Kudrin has also told that the agenda of the session of the Council of Ministers does not include the loan issue. “It is a question for bilateral talks,” he said.

At the same time, as said by the Finance Minister, Russia had proposed to Belarus to take the last installment of the loan in Russian rubles, but Belarus refused.

“I offered Lukashenka, and our president (Dmitry Medvedev) supported issuing the $500 million loan in Russian rubles, if Russian rubles are needed in mutual payments, but Belarus refused,” A. Kudrin said.

As said by Kudrin, the Belarusian economy could break down under loan debt burden.

"We can see non-solvency of the Belarusian government and of the economy as a whole due to insufficient reserves, possibly as early as at the end of this year, or maybe in a year..." Kudrin told reporters.

He underlined that giving the $500 million loan depends on the economic policy carries out by Belarus.

“The government of Belarus takes insufficient measures to provide its stability and financial solvency of its economy,” A. Kudrin said.

He also said that the Belarusian government asks Russia for a nine-billion-dollar loan for the construction of a nuclear power plant.

He reminded that the decision to construct the plant hadn’t been adopted yet.

“We already have an application from the Belarussian government and we are looking into it,” Kudrin said. “In order to make a decision we must make sure that the power plant will be built, that sales markets for its electricity will be determined and that these markets will make it possible to return this credit,” Kudrin noted.

The Vice Premier reminded that Russia had granted loans to Belarus at most favourable conditions as compared to other loans received by Minsk: for 15 years with a grace period of 5 years at LIBOR+3% (less then 4% at this stage). The IMF loans, for example, are given for a short term, for 3 years, he noted.

“But even these conditions have become intolerable already,” Kudrin said, having in mind credit commitments of Minsk.