UPDATE 2: Lukashenko: Moscow can issue Russia-Belarus united money

(releads, rewrites through)

MINSK, Mar 1 (PRIME) -- The Union State of Russia and Belarus can launch a center issuing united currency in Russia, the last stumbling block on the way to a united state, Belarusian President Alexander Lukashenko said on Friday.

“The main issue is the issuance center (where it will be located). He (Russian President Vladimir Putin) asks me: “Will it be in Minsk?” And I say: “No, in Smolensk,” Lukashenko said.

He also said he would consider building the center in St. Petersburg.

But Russian presidential spokesman Dmitry Peskov downplayed the readiness on the decision on the issuance centre.

“The problem is that joint activities, including in the joint currency, are stipulated in our joint documents. There are no exact terms, and this topic surely can and must be discussed if we are to proceed with the Union State.”

Lukashenko also said that Belarus will abandon Russian oil in favor of oil from other countries if an agreement on compensation to Minsk of Russia’s taxation changes is not reached.

“The Russians treat us well, why must we throw stones at them? Yes, they want to press us economically sometimes, demonstrate something or they might indeed be worried with this tax maneuver,” Lukashenko said.

“So be it, we will survive (without) U.S. $400 million this year, or it might be less. But we will survive. We will complete modernization of our plants in November, we will buy oil elsewhere. We will buy oil on the market, it is plenty there, the issue is the price.”

In August, Russian President Vladimir Putin signed into law a bill on the final stage of a tax reform, which implies reduction of the oil and oil product export duty by 5 percentage points annually from the current 30% within six years starting from 2019 and raising upstream taxation within three years.

For Belarus, the reform will mean a higher price of oil imported from Russia and a lower income from export duties on oil products, as Russia delivers 18 million tonnes of duty-free oil to the Belarusian refineries every year and additional 6 million tonnes participate in a re-export mechanism sending the export duties to Belarus’s budget.

In December, Putin and Lukashenko failed to align their positions on compensation for the Russian tax maneuver. Russian Finance Minister Anton Siluanov said that Moscow is ready to compensate Minsk for the changes by providing subsidies to Belarusian refineries only if the Russia–Belarus Union State continues to integrate on the initiative by Belarus.

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