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Banking

Belarus: Russia blows hot and cold

After last year’s gas war with Ukraine, Russia began 2010 with the opening of a new front in its energy disputes with former Soviet states. At the start of the year the Kremlin cut off oil supplies to Belarus via the Druschba (Friendship) pipeline in a spat over prices and transit fees. The pipeline supplies Belarus as well as 75% of Poland’s oil and 15% of Germany’s. The dispute, which pushed oil prices to a two-month high of $81, once again highlights the hot/cold relationship Russia has with some of its neighbours.

In mid-December relations between Russia and Belarus looked far warmer when the two governments signed a treaty on further political and economic integration. At the same time Russia’s biggest lender, Sberbank, bought the fourth-biggest bank in Belarus, Belpromstroibank (BPS-Bank), for about $295 million. Sberbank has also committed itself to increasing BPS-Bank’s equity base by $300 million to $350 million in the period 2010-14 as well as agreeing to arrange a further $2 billion in supplementary financing. "We’re investing a huge amount in the Belarusian economy and see the potential for it to develop and our business to grow," says German Gref, Sberbank’s chief executive.

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