Mr. Kudrin is convinced that everything is ready for the signing of the agreement, the Kommersant newspaper reports. For their part, Nikolai Korbut and Petr Prokopovich did not argue about organizational issues, but requested that Mr. Kudrin should address the complaints of Belarusian President Alexander Lukashenko.

The draft agreement was prepared back on August 12. At that time, Nikolai Korbut and Petr Prokopovich met with Alexey Kudrin. According to Senior Deputy Finance Minister of Russia Alexey Ulyukayev, it was agreed that Belarus would not challenge the Russian Central Bank’s right to print rubles, and that the Russian ruble would become the only legal tender in Belarus starting on January 1, 2005. Belarus will receive a loan of RUR 20bn (about $652.7m) to ensure the solvency of the National Bank of Belarus. Russia will also provide Belarus with cash rubles for replacing Belarusian currency, at a ratio of 1:1.3.

Nikolai Korbut and Petr Prokopovich agreed to these terms. However, the Kommersant continues, they came to Moscow on September 9 to demand more concessions. Mr. Lukashenko sent a list of Belarus’ costly demands to Russian President Vladimir Putin back on September 4. In his opinion, Moscow should cover all Belarus’ losses, both individual and state, resulting from the introduction of the Russian ruble. He also demanded that Moscow should compensate for the value added tax, which has been levied on Russian goods exported into Belarus by Russian (and not Belarusian) tax agencies since 2000. The Belarusians calculated that it was about $800m.

Finally, Mr. Lukashenko wants to have “prices for gas, electricity and oil (in the amount sufficient to satisfy in full Belarus’ needs) equal to Russian domestic prices”. In return, Belarus agrees to introduce the Russian ruble in electronic form on October 1, 2003.

Moscow reacted quickly to Belarus’ new demands. Gazprom announced that it had suspended cheap gas supplies to Belarus and raised the price 2.5 times. It seems that the Kremlin’s tactics worked. Belarusian authorities decided that it was better to hurry up with the introduction of the Russian ruble.

On September 9, the Belarusian officials brought a new draft decree by Mr. Lukashenko, which envisages the introduction of the Russian ruble within the indicated period.