Ecco un po di verità: Ruble worries getting in way of Putins Eurasian union TAKAYUKI TANAKA, Nikkei staff writer MOSCOW -- President Vladimir Putins vision for Russia may be in bigger trouble than he wants to admit, as worries grow that plummeting crude oil prices and Western sanctions will undercut his plan to create a new economic union that encompasses former Soviet republics. Putin, who has called the breakup of the Soviet Union the greatest geopolitical tragedy of the 20th century, is eager to create the alliance known as the Eurasian Economic Union. Russia, Belarus and Kazakhstan established a precursor to this framework in 2010, focusing on tariff elimination. In October, Armenia signed a treaty to join the alliance, and Kirgyz came on board at a summit meeting Tuesday.At the meeting, participants confirmed the formation of the Eurasian Economic Union next month, and agreed to have talks with Vietnam on a free trade pact in the first half of next year and widen partnerships with the Association of Southeast Asian Nations, India and South American countries.Under the regional economic alliance, Putin wants to increase trade denominated in the ruble and thus reduce dependence on imports from Europe and the U.S.But the decline of the ruble and its volatility is worrying Kazakhstan and Belarus. The Russian currency on Tuesday regained strength, rising briefly to its stiffest against the greenback in two weeks, to about 53 rubles a dollar. But just last week, the currency traded at 80 rubles to the dollar, more than 50% softer than at the start of 2014.Alexander Lukashenko, the president of Belarus, demanded last Thursday that trade with Russia be denominated in dollars or euros instead of rubles. A state-owned power company in Kazakhstan has suspended some electricity supply to Russia due to concern over the weak ruble.The two countries are increasingly frustrated by the negative impact of the soft ruble on their own economies. Lukashenko and Kazakhstan President Nursultan Nazarbayev both paid visits to Ukraine this week in search of a solution to the ongoing conflict. They are also unlikely to go along with Russias anti-West stance. Both plan to deepen their good relations with the U.S. and Europe. The countries want to maximize support for their economies from both sides. Putin had earlier sought to make the Eurasian union a broader alliance extending to the political and diplomatic arenas. But that vision is unlikely to be realized, at least for the time being. asia.nikkei/Politics-Economy
Posted on: Mon, 29 Dec 2014 03:18:08 +0000
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