President Putin and his Belarusian counterpart Aleksandr Lukashenko have met in the capital Minsk. Russia has announced it won’t sharply increase gas prices for Belarus and will provide a state loan of $US 1.5 billion. Besides, several bilateral economic

The talks lasted for four hours, and one of the major achievements was the statement of President Putin who said that Russia is ready to allocate a state stabilisation credit to Belarus.

“Both countries need to comply with their energy-related contract and gradually shift to free market rules. To enable this, Russia has decided to provide Belarus with the state loan of $US 1.5 billion,” commented President Putin.

The request for this credit came from Belarus in February following the increase in gas prices which caused dispute and disruptions in gas deliveries.

The Russian President also said all increases will be fluctuated in accordance with the contracts.

Worker, Yamal-Europe gas pipeline

Aleksandr Lukashenko added Belarus is ready to fulfill its obligations concerning gas transit, and both presidents have confirmed that the gas deliveries to the EU will be stable.

As far as the Union State is concerned, the talks produced no breakthrough on the issue.

Miraculous idea

Back in the 1990s, the Belarusian President started the formation of the Union State of Russia and Belarus, with the intention of bringing more harmony to economic and political differences.

The union is the brainchild of former Russian President Boris Yeltsin and Belarusian leader Aleksandr Lukashenko.

The eventual goal was to form an entity of two states with a common President, parliament, constitution, citizenship and currency.

Tough reality

Since then, Russia and Belarus have lost much of the original enthusiasm.

“All the expectations of the breakthrough in these negotiations would not result in any breakthrough,” said Kirill Koktysh from Moscow State University of International Relations.

Over the years, the relationship between the two countries has been difficult over Russian energy deliveries.

The ultimate cooling of the relationship came with the oil and gas transit dispute in 2006.

Meanwhile, military co-operation is an area of great success between Russia and Belarus.

So far the union is more of a virtual relationship, and its future remains uncertain.