John Besemeres is a Visiting Fellow in the Centre for European Studies, ANU. His recent articles on Russia's near abroad are here, here and here.

Over the last few years, the EU has sought to reach out to Belarusian President Alexander Lukashenka in every possible way, giving him credit for good intentions where events have revealed he had none. Despite their efforts, the final result seems likely to be a comprehensive win for Moscow. Last week in the Belarus capital Minsk, a major step may have been taken towards the central Russian objective of bringing its Slav neighbours back into close communion.

President Lukashenka, having alienated the EU and much of his own population by his crackdown against opposition protesters last December, has seen his economy implode under him in the first few months of this year. In fact the strains in the Belarus economy had been apparent for some time. 

Essentially the model was a continuation of the Soviet system with little modification, depending heavily on cheap energy imports and other subsidies from Russia. But Lukashenka greatly aggravated the growing strains by a huge wage hike of 50% for employees in the very large (70%) public sector. This had been part of his preparations for the ultimately rorted presidential election last December which led first to protests, then a violent crackdown. 

Though long the most loyal of all the former republic leaders after winning the presidency in 1994, Lukashenka nonetheless became attached to being his own master and wanted to maintain his independence. He even had ambitions to convert the 'union state' (soyuznoye gosudarstvo) that was created between Belarus and Russia in 1996 into a closer federation where he might aspire to become the number one figure. 

As his behaviour towards Moscow became increasingly stroppy, Russia not surprisingly decided to withdraw the subsidies. Lukashenka then flirted with a range of alternative sponsors and benefactors, notably the EU, but also China and Venezuela.

But he did not do nearly enough to put his vulnerable economy on a more sustainable footing. Nor did he wish to meet most of the EU's demands for economic reform, much less democratisation. Since his crackdown, he has denounced EU leaders in intemperate language, calling the European Commission president Barroso, for example, an asshole, German Foreign Minister Westerwelle a 'faggot', and in many other ways effectively cutting off the possibility of any further support from that source.

Meanwhile, Moscow has in recent months dangled the prospect of another line of credit to Belarus that would keep Lukashenka and the economy afloat. But as Lukashenka lunged desperately towards the bait, it was withdrawn out of his reach. Russia's finance minister even suggested sardonically that Lukashenka might wish to seek help from the IMF instead. It was being made clear to Lukashenka that he had nowhere else to go.

On Thursday of last week, during a visit by Prime Minister Putin, a deal or deals were apparently struck whereby the prospect of a more substantial credit was held out subject to economic reforms being undertaken by the Lukashenka regime. These seem primarily to envisage, apart from further devaluation, privatisation of some of Belarus' strategic assets, including its gas pipelines, in which we can confidently expect that Russian interests will be the successful investors.

Russia under Putin has consistently and adroitly followed a policy of 'energy diplomacy', whereby it seeks to convert its monopolistic position on international energy markets, particularly in countries that were once under Soviet control, to re-establish a strong and potentially dominant influence on those countries' decision-making processes. 

This policy, sometimes epigrammatically referred to as 'banks not tanks', has now been applied with good timing and telling effect to Lukashenka. He will continue to wriggle, and may yet devise some kind of hedging mechanism for himself, but it looks very much as though he has run out of options. 

Whether he will even remain for long in the top job is questionable. The sudden economic disaster, with inflation starting to gallop, goods disappearing from shelves and two sharp devaluations leaving many people with their savings gutted, has inflicted severe distress on most of the population. Coming after the mysterious terrorist carnage in the Minsk metro in April and the post-election crackdown, this has left the population stunned and even more cowed than usual. 

But many in the regime as well as in the population are bound to be asking themselves, however shyly, whether their present leadership is optimal. Russia may be able to find ways to help facilitate a change at the top. Lukashenka's demotion, if it happens, will not call forth howls of protest from the West. But future leaderships of whatever make-up will find themselves much more beholden to Moscow than hitherto.

Photo courtesy of Wikimedia Commons.