Home Uncategorized Belarus opposition outlines possible EU sanctions against regime

Belarus opposition outlines possible EU sanctions against regime


Belarus opposition outlines possible EU sanctions against regime

Brussels should prohibit EU dealings with two dozen state-owned Belarusian companies, block key exports from Minsk and ban new foreign investment into the country, according to a list of measures prepared by the opposition to lobby the European bloc.

In response to Belarus’s interception of a Ryanair flight, EU sanctions should specifically target the country’s oil, petrochemicals, potash fertilisers, metals and wood industries, which together account for about half its merchandise exports, according to a document seen by the Financial Times.

The EU is Belarus’s second main trade partner, representing almost a fifth of the country’s business in goods. Last year, it exported about €4bn of goods to the EU and imported slightly more than €6bn, according to EU data. Russia is Belarus’s largest trade partner, with an almost 50 per cent share.

The EU is under pressure to announce sanctions quickly given that leaders called at a Brussels summit on Monday for them to be worked up “without delay” after President Alexander Lukashenko’s regime triggered a global uproar by intercepting flight FR4978 carrying dissident Roman Protasevich and his girlfriend Sofia Sapega.

However, the EU’s analysis of potential measures has only just begun and there will be debate over how to strike a balance between hurting the regime while minimising harm to ordinary Belarusian citizens such as job losses, EU diplomats said.

The opposition wants the bloc to prohibit EU companies from dealing with about two dozen state-owned Belarusian companies, including its largest potash producer, Belaruskali, fertiliser group Grodno Azot, and its main oil group Belneftekhim, several refiners and six banks.

The document also proposes a moratorium on new foreign investment in Belarus and on new credit lines for the country’s banks. About €400m of money from the EU was invested in Belarus in 2019.

Map animation showing how flights are avoiding Belarus airspace

EU countries, the UK, and Ukraine all agreed on Monday to ban Belarusian airlines from their airspace. By Tuesday, EU airlines also stopped flying over the country.

The final decision on EU sanctions will rest with member states. Some — notably Germany — are reluctant to pass serious sanctions on whole economic sectors over concerns about their effectiveness and durability against legal challenges.

Amid the flurry of diplomatic activity, France has raised the prospect of inviting Sviatlana Tsikhanouskaya, Belarus’s exiled opposition leader, to participate in next month’s G7 summit if the British, who are hosting the event, agree.

Tsikhanouskaya fled to Lithuania last year after Lukashenko brutally cracked down on protests against his claim to have won a presidential election that was not recognised by the EU or the US.

Protasevich, who left Belarus in 2019, played a key role in reporting on and sometimes directing the protests as then-editor of independent media group Nexta. On Monday evening, a video of him was shown in a Minsk jail with visible bruises on his face confessing to “organising mass disturbances”, which carries a sentence of up to 15 years in prison.

The opposition is also pushing for the EU to respond to the wave of arrests, show trials and torture by pushing for Belarus’s suspension from Interpol and placing an embargo on exports of goods that could be used for oppression, such as riot gear and surveillance software.

If the opposition’s proposals were accepted, EU diplomats would also no longer present their credentials in Belarus and the bloc would refuse to accredit new Belarusian ambassadors to its member states.

Belarus’s state-owned industries are a crucial source of hard currency for Lukashenko’s regime. Belneftekhim made $4.2bn from export revenues from January to the end of November last year, while Belaruskali, which accounts for about 20 per cent of the global potash market, sold $2.4bn abroad last year.

Some of them have already come under pressure after the US resumed sanctions on nine companies in April, including Belneftekhim and Naftan, the country’s largest oil refinery.

“It would be good if the EU took these companies as a starting point, because these companies don’t really trade so much with the US, so the impact of the US sanctions is still quite limited,” said Katia Glod, a non-resident fellow at the Center for European Policy Analysis, a think-tank.

“But if the EU joined, and European companies and banks that trade with these companies, that would hit Belarus quite painfully.”

Belarus’s hard currency reserves have fallen more than 25 per cent in more than a year to $6.9bn as of April, of which just $2.8bn is liquid. Yields on the country’s 10-year sovereign bonds increased by 2 per cent on Tuesday.

Additional reporting by Victor Mallet in Paris

Published at Tue, 25 May 2021 15:15:56 +0000

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