On Monday (June 21), the European Union, the United States, the United Kingdom, and Canada increased their pressure on Belarusian President Alexander Lukashenko after a Ryanair airliner was forced to land to arrest a critic of the regime. Coordinate sanctions.
They said in a joint statement: “We are deeply concerned about the Lukashenko regime’s continued attacks on human rights, fundamental freedoms and international law.”
US Secretary of State Anthony Brinken stated that these measures “demonstrate a firm commitment to transatlantic support for the democratic aspirations of the Belarusian people.”
Since Lukashenko claimed victory in an election deemed fraudulent in the West in August last year, the European Union and the United States have brutally suppressed the opposition against dozens of individuals and entities.
The 27-nation group and London added seven officials—including the Belarusian Minister of Defense and Transportation—to their sanctions blacklist because of the grounding of Ryanair’s jets last month.
The EU foreign ministers’ meeting in Luxembourg also supported extensive sanctions against the Belarusian regime’s main sources of income: potash fertilizer exports, the tobacco industry, petroleum and petrochemical products.
The head of EU foreign policy Jose Porrell said that broader economic sanctions should be formally passed in the next few days.
German Foreign Minister Heiko Maas said: “Today we have confirmed and decided to impose departmental sanctions on Belarus, which will have a serious impact on the Belarusian economy.”
“We hope to release political prisoners, end violence against protesters and opposition groups, and engage in inclusive dialogue to promote free and fair elections.”
The leader of the Belarusian opposition party, Sviatlana Tsikhanouskaya, insisted that she won last year’s opinion poll and welcomed the “democratic community” joint strike in Belarus.
In an interview with Agence France-Presse in Brussels, Qihanusskaya said: “When they unite, the sanctions will be stronger.”
“This is a clear message to the regime that we will continue to work together to oppose human rights violence and lawlessness.”
“Stalinism”
The Belarusian strongman Lukashenko sent a fighter jet to intercept the Ryanair plane flying from Greece to Lithuania on May 23, arousing the anger of the international community.
When the plane was forced to land in Minsk, Belarus arrested dissident journalist Roman Protasevich and his girlfriend Sofia Sapega on board.
The European Union reacted quickly, preventing Belarusian Airlines from flying to the European Union and preventing airlines from 27 countries from using Belarusian airspace.
Since the veteran leader claimed victory in an election deemed fraudulent by the West in August, the EU has imposed sanctions on 88 people last year, including Lukashenko and his son.
After the authorities used bomb threats to force Ryanair’s flight to land in Minsk, the United States imposed a series of sanctions on Belarusian state-owned companies in May.
Belarusian authorities detained thousands of people in demonstrations triggered by last year’s elections, and the European Union stated that about 500 political prisoners are still in prison.
“We made it clear that Stalinism and State terrorism no longer have a foothold in the 21st century,” said Luxembourg Foreign Minister Jean Asselborn.
Lukashenko has been the ruler of Belarus since 1994. So far, he has escaped pressure with the support of his main ally, Russia.
Lithuanian Foreign Minister Gabrielius Landsbergis complained that Belarus was fighting back by moving migrants (mainly Iraqis and Syrians) across the border.
He warned that after sanctions are approved, traffic may increase and Lithuania “may need help and assistance from other European countries.”
Belarusian bonds plummeted
Due to coordinated sanctions imposed by the West, Belarusian government bonds plummeted on Monday (June 21).
Belarus’ dollar-denominated bonds fell by 4 cents, or nearly 5%, in 2031, the biggest drop since the peak of COVID anxiety in the global market in March last year. The 2031 bonds issued in June last year matched the decline, hitting a record low, and then rebounded slightly.
Hard currency sovereign bonds accounted for nearly one-third of Belarus’ foreign debt of 18.5 billion U.S. dollars. Its debt-to-GDP ratio is relatively low, just over 40%, but it is worrying that the sanctions may reflect sanctions from Russia and even Venezuela, where international investors are prohibited from trading bonds.
Tim Ash of BlueBay, a fund management company that did not buy Belarusian bonds last year, said the coordination between the EU, the US, the UK and Canada was “impressive and influential”.
“These sanctions are now absolutely surprising on the hawks side.”
“More and more investors will pay attention to the relationship between Russia and Belarus,” said Trieu Pham, debt strategist for emerging markets at ING.
“The more Belarus is isolated from the West, it will rely on more Russian financial support, which will promote the pricing of Belarusian euro bonds.”
Restrictions on the Belarusian financial industry will include a ban on new loans, a ban on EU investors from buying bonds in the primary market, and a ban on EU banks that provide investment services.
EU export credits will also end, but they will not target private savings. Securities circulating and trading among fund managers are not expected to be hit, but sanctions on the secondary market may be implemented at a later stage.
“Just like in Russia, you know that sanctions are coming, you just don’t know how severe it is,” said Viktor Szabo, portfolio manager of Aberdeen Standard Investment. “If it is a secondary market sanctions, then the game is over.”
