The EU’s Belarus Dilemma

Despite weeks of protests, violence and recriminations in Belarus, nothing has yet been able to tilt the balance in favour of the opposition movement. Meanwhile, the crisis in Belarus is proving to be the European Union’s ultimate foreign policy dilemma.

Whilst tens of thousands of protestors take to the streets of Minsk day-after-day, the security, political and administrative elites have so far remained loyal to President Alexander Lukashenko. The power vertical that Lukashenko has built over 26 years has proven extremely resilient and remains intact.

What has been most striking about the crisis in Belarus is the rather limited, even lacklustre, response by the European Union. Whilst Lithuania and Poland have sensed an opportunity to exert political influence in the region and within the EU institutions, the rest of the EU member states and the European Commission have been noticeably more restrained.

Special European Council meeting
During its special meeting on the 19th of August, the European Council stated that they did ‘not recognise the results’ of the election and that sanctions on fifteen to twenty individual Belarusian officials would be put in place by mid-September.1

However, EU leaders stopped short of the non-recognition of Lukashenko as the incumbent president of Belarus, presumably having learnt the lessons of this failed approach with Juan Guaidó in Venezuela.

The EU itself has shown in recent weeks that it is either unwilling, or unable, to act collectively when it comes to Belarus

Most interesting was what the EU leaders did not say, as opposed to what they did. It was telling that despite the strongly worded conclusions and press statements, the European Council chose not to go further in supporting the opposition movement.

Leaders from some of the more hawkish member states wanted the European Council to be more decisive and robust with Minsk, with additional actions including:

1. Imposing broader economic sanctions on Belarus, particularly against state-owned enterprises;
2. Offering ordinary Belarusians a more liberal visa regime to enter the Schengen zone;
3. Stronger wording in the Council conclusions in support of a “European future” for Belarus;
4. The potential offer of a new EU-Belarus trade, economic and political relationship post-Lukashenko;
5. A more expansive financial support package.

Subsequently, on the 2nd of September, the Lithuanian Foreign Minister Linas Linkevičius announced that his government would be introducing its own package of measures to support victims of police violence in Belarus and the integration of Belarusian nationals into the Lithuanian labour market.

In addition to this unilateral measure by Vilnius, on the 30th of August all three Baltic States published a joint list of thirty Belarusian officials that are to have travel bans placed on them for their involvement in the election and subsequent violence, including President Lukashenko himself.

However, despite the actions of Lithuania and its close neighbours, the EU itself has shown in recent weeks that it is either unwilling, or unable, to act collectively when it comes to Belarus. But should this be surprising?

Not a single European flag has been seen during the demonstrations

The Belarus crisis has emerged via a unique set of political, socio-economic and foreign policy factors, which taken collectively creates a serious dilemma for the EU’s Common Foreign and Security Policy. It puts immense pressure on EU unity, with Eastern European states wanting more action, sometimes for domestic political reasons, whilst many Western European states are more hesitant to get embroiled in another confrontation involving Russia.

At the same time, the instincts of many of those working in the EU institutions is that “something must be done” to address the democratic and human rights deficit in Belarus, in spite of the potentially serious geopolitical consequences for the EU itself.

Political dilemma
The first dilemma the EU is facing in Belarus is that of domestic politics. It is worth noting that during the four weeks of protests following the elections, not a single European flag has been seen during the demonstrations.

None of the leading voices in the recently established opposition Coordination Council have publicly professed to wanting closer alignment with the EU. Indeed, despite some of the more proactive foreign policy initiatives coming out of Vilnius and Warsaw, Belarusians are not calling for a “European future” but rather to be an independent, sovereign and neutral state.

However, one of the problems for the EU is that Belarus is de facto not an independent, sovereign or neutral state. Instead, it is deeply integrated with its Russian neighbour at the political, economic, social and military level, including the Collective Security Treaty Organisation (CSTO), the Union State of Russia and Belarus, the Eurasian Economic Union (EAEU), the Eurasian Customs Union, the Commonwealth of Independent States (CIS), together with numerous technical agreements on mutual recognition of visas, cross-border working, social security coordination, pricing policies and many more.

In contrast, the EU and Belarus have just two legally enforceable bilateral agreements, covering the trade in textiles and visa facilitation. This leaves the EU unable to easily use its traditional range of economic inducements and sanctions against Belarus.

When money is involved in the EU, politics is never far away

Therefore, the domestic political dynamic in Belarus means that even if the EU were to try and intervene more actively in Belarus, it is not certain to make a significant impact or affect change. Without a solid and reliable domestic support base in the country (at both the elite and popular level), the EU will be calculating how much political and diplomatic capital it is prepared to invest in a country, that has so far at least, not stated an interest in reorienting towards the EU.

Economic Dilemma
This leads to a second dilemma for the EU, which is the financial cost and associated risk of trying to intervene in Belarus. Whilst Ukraine is rich in natural resources with a strong industrial and agricultural base and over 41 million consumers, Belarus has none of these advantages.

As a landlocked, largely state-owned economy with no natural resources and a population of less than ten million, it is a far less attractive proposition for the EU than many other states in the post-Soviet space.

In 2016, fifty percent of the employed Belarusian population worked in state-owned enterprises, generating over 60 percent of the total output and over 77 percent of the industrial production.2  The Belarusian state budget is around 20 billion dollars per annum, of which around 2 billion dollars in revenue comes from exporting oil products to Russia.3

Historically, these exports have been subsidised by the Russian government in the form of price reductions on oil, which allowed Belarus to process the crude oil into saleable products which were then re-exported back to Russia at a profit.

Other forms of subsidies from Russia have included discounted loans, the purchasing of Belarusian state debt, and other investments. As of 2019, Russia’s biggest individual debtor was Belarus with 7.55 billion dollars still owed by Minsk.4

However, these subsidies have declined significantly in recent years, leaving a hole in the Belarusian state budget. Minsk has had to become more adaptable at finding financial resources, including seeking loans from China, the European Bank for Reconstruction and Development, the International Monetary Fund, and the World Bank.

Russia also remains important to Belarus in the trade of other goods and services. The two countries are bound together via the Eurasian Economic Union, Eurasian Customs Union and the Union State Treaty. This close relationship resulted in Russia accounting for 49.2 percent of Belarus' total trade in 2019, including 41.2 percent of Belarus' total exports and 55.9 percent of Belarus' total imports.5

Taking into consideration the composition of the Belarusian economy and its dependence upon Russia, the EU will have to seriously consider if it is prepared to step into the economic void that would be created by Russia withdrawing from the country. A reasonable assumption when one looks at precedent in other post-Soviet states.

Serious questions would also have to be asked about the viability of many of the state-owned enterprises, which realistically may not be able to survive exposure to competition and global market forces.

The resulting unemployment, economic downturn and the possible Western emigration of highly skilled workers, would leave ordinary Belarusians with significantly lower living standards and rising levels of poverty. On a reasonable worst-case assumption, the EU might have to donate, loan and forgive debts to Belarus, worth more than 20 billion dollars in the short-to-medium term in order to stop an economic collapse.

In all scenarios, whether Lukashenko stays or goes, Moscow will be the ultimate winner

If the assessment on whether to help Belarus were simply a matter of numbers, then the EU might consider 20 billion dollars a reasonable investment into an emerging European economy. However, when money is involved in the EU, politics is never far away. It will be the wealthier EU member states that will be expected to fund the financing of any projects and loans to Belarus.

In light of the non-binding Dutch referendum on the Ukraine-EU Association Agreement in 2016, in which the Dutch voted 61 percent against the agreement, the EU would be loathed to take for granted the unconditional support from either European citizens or EU member states for such a substantial financial commitment.

Foreign Policy Dilemma
Finally, the EU faces a significant foreign policy and geopolitical dilemma in trying to confront what is happening in Belarus. The EU’s response to the events in Belarus cannot be seen in isolation and should be looked at in a broader geopolitical context, largely defined by a deteriorating relationship between the West and Russia.

The hard reality is that any change the EU might want to see in Belarus can only occur with the acquiescence of Moscow. Whilst this conclusion is uncomfortable for many, it is an acknowledgement of the geopolitical facts on the ground.

No small or medium sized country like Belarus can exercise full sovereignty when put in the context of competing international power politics. Russia has legitimate political, economic and military interests in Belarus, which it has made clear it will defend.

If the EU wishes to intervene and to destabilise that pre-existing relationship, it will have to accept some level of Russian retaliation. For comparison, imports into Russia from the EU and US declined by about 12.6 billion dollars due to Russia’s countersanctions following the Ukraine crisis in 2014.6  At a time of global economic fragility and rising unemployment in Europe, is the EU prepared to accept the possibility of an additional economic and financial shock to its economy? 

At this stage of the crisis it appears the EU is disinclined to take on that additional economic and geopolitical risk, preferring instead to preach from the sidelines. The individual travel bans and asset freezes that will be imposed by the EU on a small number of Belarusian officials will likely have a limited impact.

The choices for the EU in Belarus are limited, with all actions having a large cost implication. In all scenarios, whether Lukashenko stays or goes, Moscow will be the ultimate winner.

If an enfeebled Lukashenko remains in power, he will depend upon Russian security and financial largesse even more than he does today. If Lukashenko leaves office, then Moscow will be presented with a fragile state, with inexperienced leaders, and an economy dependent upon Russian support – fertile ground for Russia to pull Belarus deeper into its Union State.

The current crisis in Belarus has exposed the flaws in the EU’s Common Foreign and Security Policy and is proving to be its ultimate foreign policy dilemma. Unfortunately for Brussels, its options are limited and it is doubtful that anything the EU does in the next few months will tip the balance either way.

• 1Conclusions by the President of the European Council following the video conference of the members of the European Council on 19 August 2020
• 2International Monetary Fund Country Report – Belarus, December 2017, p.30
• 3Ministry of Finance of Belarus, State Budget Law 2020
• 4National Bank of the Republic of Belarus
• 5Belarusian Telegraph News Agency, ‘Belarus-Russia trade 0.5% down in 2019’, 4 February 2020
• 6Matěj Bělín and Jan Hanousek, ‘Which sanctions matter? Analysis of the EU / Russian sanctions of 2014’, Journal of Comparative Economics, 21 July 2020