MINSK President Alexander Lukashenko said on Thursday that Belarus was assailed from all sides by external enemies and threatened to smash any "fifth column" after the country's currency lost a third of its value.
In an annual state of the nation speech four months after his flawed re-election, Lukashenko sought to rally people behind him after a deadly bomb attack and and a currency crisis that threatens living standards.
Lukashenko, 56, in power since 1994, blamed the former Soviet republic's woes on unnamed "fifth column" forces and on failed attempts to adopt Western-style liberal practices.
"We will destroy any fifth or 25th column and this does not make us a dictatorship," he declared. "There has been so much democracy it has almost made us sick."
Referring to Western sanctions against him over a police crackdown on political opposition after the disputed December poll, he declared: "Belarus is experiencing massive pressure.
"There was panic on the currency and consumer markets caused by the opposition and foreign analysts. Then we had speculation about the latest events in the Oktyabrskaya metro station (bombing). These are all links in the same chain," he said.
The Belarussian rouble lost more than a third of its value against the dollar on Wednesday after the central bank introduced a free floating exchange rate for inter-bank trade to alleviate pressure caused by a shortage of dollars.
The development highlighted Belarus' problems nine days after a bomb blast at a Minsk metro station killed 13 people.
The rouble's fall against the dollar piled on the misery for the average Belarussian citizen who was promised better times ahead when Lukashenko secured a fourth term in December.
Bankers said the rouble was trading at around 5,000 to the dollar on the interbank market on Thursday, compared with the official exchange rate of 3,074 roubles per dollar.
"WE NEED EACH OTHER"
Thursday's speech, delivered in typically combative style, was in line with many previous public statements in which he has evoked a threat from unnamed hostile forces to validate hardline policies at home.
Lukashenko depicted himself as a safe pair of hands in times of adversity and tried to reassure Belarussians that relations with the European Union -- now in the deep freeze -- would soon revive.
"The time-out ... will not continue for long. We need each other," he said, recalling that Belarus was an important pipeline route for Russian energy to Western Europe.
The Dec. 19 crackdown on a peaceful opposition protest triggered sanctions by the United States and the EU which have re-imposed a travel ban on him and close associates.
While ordinary people can exchange roubles at the official rate in theory, the supply of dollars from official exchange points has dried up, forcing them into black market deals.
Prices of imported goods are set to continue to rise in the country of 9.5 million. Goods ranging from food to computers are up more than 20 percent since the start of April.
A deputy prime minister, Sergei Rumas, said the interbank rate of 5,000 roubles per dollar was "unrealistic" and predicted the rouble would recover.
"Once we have a balanced exchange rate, we will work according to our plan of unifying the exchange rate. In my opinion, this exchange rate is in the range of 3,800-4,100 per dollar. Today that fits in with the state of our economy," Rumas told Reuters.
Lukashenko, a former state farm director, has promised to bring the average monthly wage to 500 dollars in 2010 and double it by 2015. But this will be almost impossible to achieve if the rouble continues to depreciate.
The political opposition was emasculated by the December crackdown. Several opposition challengers to Lukashenko in the Dec. 19 vote are under arrest and face trial on the serious charge of organising mass disturbances. Some other opponents and dissidents have fled abroad.
Lukashenko's prediction that relations with the EU would recover was clearly aimed at reassuring people who are fearful that poor ties with the West could make Belarus far too reliant on Russia, the country's main supplier of oil and gas.
Though he regularly irritates both Russia and the EU with his policies, the veteran survivor has proved over the years to be a past master at playing one side off against each other.
Russia sees Belarus as a valuable buffer against NATO while the EU, three of whose members share a border with it, holds out hopes of Belarus being able to join the economic bloc one day.
(Writing by Richard Balmforth; Editing by Paul Taylor)