In the almost 27 years that Alexandr Lukashenko has ruled Belarus, his regime has often been punished with punitive measures.

But now, after the forced landing of the Ryanair flight in Minsk, the dictator is threatened with sanctions that are far tougher than previous ones.

In addition to isolation in air traffic, the EU is considering measures against state-owned companies in the country's two most important industries: potash production and petrochemicals.

Restrictions on Belarusian government bonds are also being discussed.

In return, Minsk threatened with an import ban for European goods and a transit stop for the transport of goods.

Katharina Wagner

Business correspondent for Russia and the CIS based in Moscow.

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    However, the market in small Belarus hardly plays a role for the EU;

    for Belarus, however, the EU is the second most important trading partner after Russia.

    Around 30 percent of exports go to the Member States and the UK.

    However, the EU is not a central market for the sale of potash salt.

    In 2020 Belarus earned 2.4 billion dollars from the export of mineral fertilizers, of which less than 10 percent came from the EU.

    Most of it goes to India, China and Brazil.

    The potash is shipped via the Lithuanian port of Klaipeda, which the EU could block.

    But Belarus could then reorient itself towards Russia, says Katerina Bornukowa, an economist at the Minsk economic institute Beroc.

    Although the Russian ports are further away, and in Klaipeda, unlike in Russia, special potash terminals have been built, this can be remedied with time and money.

    Only Russia remains to refinance the rising national debt

    The EU (and Great Britain), on the other hand, play a major role in the export of refined products: of around 10 million tons of fuels that Belarus exported in 2019, around 7 million went to the EU; Belarus earned 3 to 4 billion dollars a year from it before the pandemic. Belarus could therefore be hit hard by restrictions, with economist Bornukova assuming that Minsk would try to sell its products to the EU through Russian middlemen. Belarus could also try to deliver a larger part to Ukraine, which is also an important customer.

    However, EU sanctions against Belarusian government bonds are unlikely to change much. According to Bornukova, Belarus has not been able to place bonds on the European financial market since the beginning of the crisis after the presidential election in August, as the loss of reputation for the banks involved would be far too great. In addition, Belarus has not issued any bonds in euros before, at most in dollars. Even without sanctions, the situation is already bad for Minsk: Only Russia remains to refinance the rising national debt - and that could raise prices because of the growing dependency, said Bornukova.

    Belarus has long been reliant on financial aid from Russia, and the sanctions make this even worse.

    Sectoral sanctions, that is, directed against entire branches of the economy, are the “strongest weapon” the West has, says Bornukova. They could lead to a decline in the already weak Belarusian economy by 5 to 10 percent - but that depends on how much support there is come from Russia.

    Lukashenko no longer uses the Lithuanian port

    It had only recently become apparent that some Russian companies are unwilling to take sanction risks for their small neighbors themselves. In April Washington imposed punitive measures against state-owned oil and chemical companies, including one of the two oil refineries in Naftan. In May, Russian oil companies barely delivered any oil to the refinery for fear of secondary sanctions. According to Bornukowa, they are currently looking for detours through intermediaries.

    Lukashenko has long been trying to make himself more independent from Europe with the help of Russia. In response to Lithuania's support of the opposition candidate Svetlana Tichanovskaya, he announced that he would no longer use the port of Klaipeda, through which a large part of the oil products are shipped. In February, Russia and Belarus agreed to process almost 10 million tons of fuel by 2023 via the Russian port of Ust-Luga, which is four times further away, instead of via Klaipeda.