EU to wage economic war on Belarus dictator

They also include restrictions on imports of cigarettes, oil and oil products, and potash - a component used in making fertiliser.

And there will be a ban on exports of telecommunications kit which can be used in surveillance against the opposition and on sales of hunting rifles.

The preliminary accord will still have to be finalised by EU leaders meeting on Thursday and written into law in subsequent days.

But the EU foreign ministers will give an additional nod to blacklisting 78 more regime cronies and eight entities on Monday, in a move that will enter into force immediately.

The economic sanctions come after Belarus hijacked an EU passenger plane to kidnap an opposition activist in May and amid wider repression since rigged elections last summer.

Austria, whose banks are highly active in Belarus, had initially vetoed the ban on new bank loans, holding up the economic sanctions package.

But its foreign ministry gave into pressure from the other 26 member states and the EU institutions on Friday, diplomatic sources said.

"Glad we found agreement on Belarus economic sanctions that are robust and targeted ... looking forward to our meeting on Monday," Austrian foreign minister Alexander Schallenberg said.

Some member states had also voiced concern that banning exports of potash could cause havoc in world markets, given that Belarus makes some 20 percent of the world's supply.

But Lithuania, whose port of Klaipeda depends heavily on potash trade, and Poland, who used to buy 40 percent of its supplies from its neighbour, had argued that if they were willing to pay a cost for the new sanctions, then other EU states should be willing also.

Meanwhile, the cigarette-sales ban is expected to hit Belarus' president Aleksander Lukashenko's private income the most directly and is to be accompanied by tougher measures to curb smuggling.

"Cigarette smuggling is not some mafia-like activity in Belarus - top people in the presidential administration sit down with the smuggling bosses to divide the spoils," an EU source said.

One Austrian argument against sanctions had been not to hurt Belarusian people, but there will be exemptions for bank loans for humanitarian projects and special clauses to help protect ordinary savers from fallout.

Another argument had been not to drive Belarus further into Russia's sphere of influence.

But for some in the Belarusian opposition, Belarus' Russia-dependency was a way of using EU sanctions to hit both regimes at the same time.

"This is brilliant, because it makes Lukashenko into Russia's problem," one opposition contact, who asked not to be named, told EUobserver.

"If they [the Russians] don't give him money, they will get instability in Belarus. And if they do, they will face the anger of both the Belarusian and the Russian people," he said.

"The Kremlin is trapped," he added.