EU sanctions on Belarus exports raise default risk

Significance

Western sanctions imposed for Belarus's complicity in the Russian invasion of Ukraine have isolated the country. Much of its export trade is reduced or cut off entirely.

Impacts

• Lukashenka will try to stay out of Russia's ill-fortuned war against Ukraine.
• Russia's Union State project has been overshadowed by the war but will be revived, against Lukashenka's wishes.
• The government is talking up positives such as farm machinery sales, but this will not compensate for other export losses.