Belarus and Greece: The tale of two bailouts

[poiuytrewq0987]

Greece and Belarus are two largely Orthodox Christian nations in Central Europe. Both have roughly the same size populations. And both, according to international bond ratings agencies, are now virtually bankrupt.

Over the past year, European Union officials have laboured to persuade Greece to accept a $161 billion aid package under International Monetary Fund supervision. Greek politicians have hemmed and hawed. In June, as many as 500 000 Greeks at one time took to the streets to protest IMF conditions. (In Athens, a favourite anti-IMF rallying cry refers to the New York hotel incident involving former IMF chief Dominique Strauss-Kahn: "The maid resisted. What do we do?")

Contrast that to Belarus.

For almost a year, Belarus president Alexander Lukashenko has asked for $8 billion in aid from Russia, his partner in a customs union.

Last week, the cheque finally arrived – for $800 million. (And $42 million of that was to come straight back to Moscow to pay Belarus’ overdue electricity bill. This money did not come back, and Moscow turned off the power on June 29).

And like any good banker, the Kremlin tied the loan to property that can be seized. In this case, the aid money is tied to Russian negotiations to take over 100 per cent control of Soviet-era pipelines that carry Russian gas to Western Europe.

On Friday in Minsk, Martin Raiser, the World Bank Country Director forUkraine, Belarus and Moldova, saw no reason for hand holding. At the conclusion of a three-day visit to Belarus, he told reporters: "Notwithstanding the social achievements of the past, Belarus’s economic model has run out of steam."

The IMF is equally cool to Belarus.

In early June, Belarus asked the IMF for $8 billion in aid. This money would follow $3.5 billion that the fund provided in 2009-2010. Many economists say president Lukashenko squandered most of this money on boosting salaries and pensions, trying to buy the December 2010 presidential elections.

Chris Jarvis, the head of the IMF team in Belarus, recently told reporters in Minsk that any new aid would be contingent upon "a strong programme" to restructure Belarus’s state-dominated economy. He warned: "We would also have to be sure that all actors – the president, government, and national bank – are committed to that programme."

This prompted Bloomberg to headline: "Lukashenka must choose between Belarus control or IMF aid."

Hoping to prolong his 17-year stay in power, Lukashenko now is preparing to sell what many Belarussians call "the family silver" – the rent-producing gas lines and Belaruskali, a state-owned potash giant that brings in about $1 billion a year in revenue to the treasury. In a recent rambling five-hour "press conference," Lukashenko tried to soften up public opinion, saying that Belaruskali, the nation’s largest enterprise, should not be made "into a Holy Grail."

If the Belarusian president meets his goal of selling this fertiliser giant for $30 billion, he could keep the "Belarus miracle" afloat for a few more years.

Given Belarus’ near total isolation, this may be the only route open to Lukashenko.

European taxpayers are prepared to lend Greece $14250 for each Greek man, woman and child. In contrast, Russia’s aid to Belarus amounts to $84 a person.

The difference boils down two intangibles that economists like to talk about: goodwill and brand.

Read more: http://www.sofiaecho.com/2011/07/15/...f-two-bailouts

[W. R.]

European taxpayers are prepared to lend Greece $14250 for each Greek man, woman and child. In contrast, Russia’s aid to Belarus amounts to $84 a person.

This makes especially difficult to understand what the Greeks are bitching about.

[Absinthe]

What you quoted is false. I mean it is just statistics, not reality.

The aids are going straight to the banks and government. The average citizen not only does not receive any aid but has to suffer severe cutbacks, ruthless and irrational taxation, unemployement, downsizing of their already small salaries, etc.

[W. R.]

The average citizen not only does not receive any aid but has to suffer severe cutbacks, ruthless and irrational taxation, unemployement, downsizing of their already small salaries, etc.

Is there any alternative?

[Treffie]

The aids are going straight to the banks and government. The average citizen not only does not receive any aid but has to suffer severe cutbacks, ruthless and irrational taxation, unemployement, downsizing of their already small salaries, etc.

Exactly. The average Greek isn't going to see any of the money, however large the bailout will be. I really feel sorry for the Greeks, they've got a choice; either die or be killed.

[Absinthe]

Exactly. The average Greek isn't going to see any of the money, however large the bailout will be. I really feel sorry for the Greeks, they've got a choice; either die or be killed.

That is exactly the choice!

Someone in the foreign pressed expressed the choice marvellously:

it's like asking turkeys if they prefer to starve or be fed so as to be roasted for Christmas...