European Union governments agreed to sanction several sectors of Belarus’s economy including industries connected to the soil nutrient potash and petroleum, as well as 86 individuals and entities, as the bloc increases pressure on President Alexander Lukashenko, according to two diplomats familiar with discussions taking place between foreign ministers on Monday.
Ahead of the meeting, Josep Borrell, the EU’s foreign policy chief, anticipated that the ministers meeting in Luxembourg would approve the measures targeting people and companies and discuss a separate package of economic sanctions which will be presented to EU leaders at a summit later this week.
The economic sanctions “will affect sectors of the Belarusian economy which are directly linked to exports,” Borrell told reporters on his way into the meeting. “Sanctions are a way of putting pressure on the government of Belarus, and these are going to hurt the economy of Belarus, heavily.”
The most significant of the economic sanctions—related to the forced landing of a Ryanair flight between two of the bloc’s capitals and the arrest of a journalist—could be the restrictions imposed on potash sales. The soil nutrient is one of Belarus’s major exports and the country’s only abundant mineral resource. The specific segments that will be targeted by the sanctions are not yet known and legal work on the measures needs to be finalized before the package is formally adopted.
Belarus increased its proceeds from potash fertilizer exports 18% in January-April to $834 million, according to the national statistical committee. Last year, potash shipments netted the country $2.4 billion.
Belarus’s $750 million of bonds due 2031 plummeted, sending the yield up about 70 basis points, the most since the debt was issued a year ago. The rate advanced to 8.35%, the highest on record.
Austrian Foreign Minister Alexander Schallenberg told reporters that the economic sanctions will affect seven sectors, including phosphate potassium, finance, telecom surveillance technology, and a further strengthening of the arms embargo.
“We need to think about where it hurts the most, and that has to be surgical,” he said. “We want to hit the regime, not the people.”
The measures are also expected to include export restrictions on supplies to the tobacco industry and will prohibit EU operators, including insurance companies, from providing services and new lending to the government in Belarus, the central bank and several majority state-owned entities, according to a person familiar with the proposals.
The bloc is also seeking to halt new lending from multilateral development banks, said the person, who asked not to be identified because the plans are private. The measures are being coordinated with the U.S., according to two people.
Following the forced landing of a Ryanair flight in Minsk last month and the arrest of a journalist on board, the EU has already banned Belarusian carriers from flying over European airspace, as well as landing and taking off from the bloc’s airports.
The EU had previously sanctioned seven Belarusian entities and 88 individuals, including Lukashenko himself, and was working on adding more people to the list even before the detention of the journalist Raman Pratasevich. The additions to the list includes judges, ministers and other lawmakers, air force and high-ranking law enforcement officers, business executives and companies supporting the regime.
