Russia has inflicted a potentially-damaging blow on its neighbour Belarus, witholding a 700 million euro loan and predicting the collapse of the economy by the end of the year. Moscow’s growing reluctance to finance its one-time Soviet ally follows President Alexander Lukashenko’s flirtation with the West through the EU’s new Eastern Partnership scheme.Late last year Russia handed over more than a billion euros in crisis credits, and another 700 million this spring. Much of the money was ear-marked by Lukashenko to finance a nuclear plant to reduce his country’s dependence on Russian gas.
But earlier this week he denounced Moscow for rowing back on previously-agreed deals. Now his apparent desire to distance his country from Russia has irritated his powerful neighbour, which seems ready to cast Belarus adrift.