Belarus’ economy is – once again – sinking, this time perhaps deeper than ever before. In less than 30 days the country devalued its currency by 36% (the biggest devaluation in 2011 globally) and froze the prices for items such as tea, coffee, cheese and fish. After the government failed to obtain a direct loan from Moscow, on 1 June, Minsk officially applied for an emergency loan from the International Monetary Fund, stating that a loan from the IMF would be under more favourable conditions than the Russia-backed $3.5 billion rescue package from the Eurasian Economic Community (Eurasec), which was offered to Belarus last week.
Provided that Minsk’s IMF request is not just a bluff to nudge its Eurasec partners into granting more favourable conditions for Belarus (which it may well be – the decision will be taken on 4 June), it is the ‘perfect storm’ for beefing up the EU and the US policy on Belarus: it comes at the time when the West is running out of options for influencing Minsk’s actions. Following the fraudulant presidential elections in December last year, and subsequent violent crackdown on the opposition and NGOs, both Brussels and Washington severed their contacts with the regime and imposed travel bans and asset freezes on more than 150 officials. But these steps brought no results: most of the opposition presidential candidates remain behind bars or received suspended prison sentences, while the activities of the NGOs that work on anything that could be remotely seen as potentially political continue to be obstructed by unfavourable laws and closely monitored by the Belarus secret service.
The main reason for the lack of success of the Western actions is the simple fact that the presence – and thus the influence - of both the EU and the US in Belarus is relatively small, especially compared to that of Russia. One of the few ways Brussels could effectively pressure the Belarusian leadership to end political repression was imposition of economic sanctions on several Belarusian companies that generate the cash for the regime – but the step found little support among the EU member-states. Belarus’ economy is still much more intertwined and dependent on Russia than on the EU (though energy deliveries to the EU customers are important for the state budget). This also explains why Russia has much bigger say in the country than the EU or the US has. If there is a lesson to be learned from the past six months in Belarus, it is that in order to be able to effectively influence the behaviour of its eastern neighbour, the EU first has to increase its presence in the country. The IMF loan would be a step in this direction.
Blocking the IMF package for Belarus [as some commentators already suggested) would not best serve the EU’s interest in building a ring of well-governed, prosperous and democratic neighbours. If the currently ongoing IMF mission concludes that such a loan is feasible, to obtain the funding, Minsk will have to undertake more structural reforms of its economy. These will, in the mid-term, reduce the state control of the economy and thus limit the regime’s grip on power. As the previous experience of IMF in Belarus shows (the country received a loan in 2009), Minsk is willing to listen to and comply with the IMF advice. And while formally, IMF loans come with no political strings attached, the EU and the US should use the opportunity and quietly approach Minsk to explain the peculiarity of the decision to lend funds to a country where people are held behind bars just because they took part in the presidential contest. At the same time, the West should also be realistic: an immediate release of political prisoners is unlikely – as it would portray the regime as beholden to foreign pressure. However, phasing out the repressions and gradual release of those imprisoned for political reasons in a next couple of months is a feasible option. While this is by no means an ideal scenario, it is much better than the status quo.
In order to negotiate a meaningful treaty, Europeans need to unify around a negotiating mandate that reconciles their different interests.
Improved cooperation constitutes a possible danger for the EU
Given public opposition, the EU should make a fresh start in winning support for TTIP.
The fifth edition of ECFR's Foreign Policy Scorecard examines EU's response to a year of crisis.
Europe needs to work towards new rules for digital surveillance