Putin, Lukashenko to discuss gas issues in Sochi on June 5

Vladimir Putin and Alexander Lukashenko discussed the introduction of a common currency for the Russia-Belarus Union and relations in the gas sphere in Sochi (a resort on the Black Sea) on September 15, 2003.

Vladimir Putin said that the ruble introduction in Belarus entails no special guarantees because "it has nothing to do with the sovereignty of Belarus".

Mr. Putin gave the euro zone as an example. "As you know, in the euro zone that common currency operates without diminishing the sovereignty of France, Germany or other countries. On the contrary, it has become stronger and more solid. This is why their economies have only gained from the introduction of a common currency", the Russian president said.

"It can be said that there are special conditions there and something is balancing something else. Recent history can provide more examples, such as Benelux. As we know, Luxembourg used the Belgian currency which has not harmed its sovereignty. It is an economically stable state, small but respected in Europe and the world", Mr. Putin said.

As regards gas issues, Vladimir Putin and Alexander Lukashenko reached agreement on turning to the market-economy relations.

"We have come to the conclusion that there is a need to switch over to the market-economy relations in this sphere without ending the negotiations on a joint venture, a joint gas pipeline system", Mr. Putin said.

"We shall transfer to the market-economy relations on January 1, 2004", the president said.

Since Russia will supply gas to Belarus at market prices, Minsk will charge market prices for the transit of Russian gas via Belarus to Europe.

" Economic entities are having negotiations, reaching agreements and debating in the gas sphere. Each of them speaks of preferences given to somebody. In the end, it is hard to say who owes what to whom", Vladimir Putin said.

However, today stable gas supplies to Belarus remains an open question because Gazprom and Beltransgaz have not yet concluded an agreement on the supply and transit of Russian gas via Belarus.

Since January 1, 2004 Gazprom has not been supplying gas to Belarus and its demand for gas is being met by independent suppliers (the ITERA international group of companies). Today gas is supplied by Gazprom's subsidiary Siberian-Ural Oil and Gas Company Sibur.

Gazprom and Beltransgaz have differences preventing them from reaching an agreement on the price of transit of Russian gas via Belarus and the balance cost of the Belarussian gas transporter, with which Gazprom is conducting so far fruitless talks on buying the controlling block of shares.

The latest bilateral meeting between Vladimir Putin and Alexander Lukashenko was held on May 23 within the framework of the Common Economic Space summit (Russia, Belarus, Ukraine and Kazakhstan) in Yalta (Crimea, Ukraine). Then the presidents expressed satisfaction over the level of bilateral relations and confidence that all the emerging problems will be settled.

"Despite the recent problems, it can be noted with satisfaction that Belarus is firmly in the second place after Germany in the trade turnover with Russia. This proves the importance of our relations for each other", Mr. Putin said.

Unfortunately, "there are many disputable questions in bilateral relations", the Russian president added.