Impact of sanctions on Belarus

RUSSIA / FSU POLITICS - In Brief 02 Jun 2021 by Alex Teddy
On May the EU banned Belarusian airlines from flying in EU airspace. The EU encouraged its airlines to desist from flying over Belarus. Belarus earns about USD 40 million from overflight fees from EU airlines. That is 0.4% of the budget.The EU has promised Belarus EUR 3.7 billion if Lukashenko leaves office. That includes a EUR 1.5 billion loan. On May 30 the US announced it would sanction 9 state-owned enterprises. This will take effect on June 3. The 9 companies have not been named. The Belarusian Oil Trade House, Belneftekhim, a tire maker and a fertilizer factory are likely to be on the list.The US is also urging its airlines to avoid Belarus. The EU and US are discussing sanctions on Belarusian officials who were behind the forcing down of a Ryanair flight in May 2021. EU foreign ministers are due to meet on June 21. We expect announcements then.The Belarusian opposition is pleading for sanctions on 24 state enterprises. Belarus' exports are potash, oil, petrochemicals, metals and wood. They also want investment in the country forbidden.25% of the EU's potash comes from Belarus. The EU is unlikely to impose sanctions so severe that it hurts itself.There is a rumor that the EU will ban Russian gas transits through Belarus. The pipeline is owned by Gazprom. If the ban is imposed then Russia will have to send more gas out via Ukraine, which is exactly what Russia wants to avoid. Ukraine will then earn more in transit fees. In the long run this would strengthen the case for completing Nord Stream 2.20% of Belarusian trade is with the EU. The EU is the country's biggest trade partner after Russia. The EU exported USD 4 billion worth of items to the EU. US trade with Be...

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