By Victoria Panfilova, an observer of Nezavisimaya Gazeta, exclusively for Vestnik KavkazaThe introduction of a single currency in the countries of the Eurasian Economic Union (EAEC) may become a reality soon. President of Russia Vladimir Putin came up with the idea of a currency union at a meeting in Astana with his EAEC colleagues, the President of Kazakhstan Nursultan Nazarbayev and the President of Belarus Alexander Lukashenko. The Russian leader said that the introduction of a new currency in the next year will help to protect the economy of the EAEC. However, experts believe that the introduction of a single currency is a premature step, assuming that the proposal of the Russian leader is dictated by the external economic situation. Perhaps the situation with the single currency may gain greater certainty at the next presidential meeting in Moscow on May 8."We agreed to continue coordinating our monetary policy. I think the time has come to discuss the possibility of creating a future currency union," Vladimir Putin said in Astana. However, it is appropriate to recall that Kazakh President Nursultan Nazarbayev took the initiative of introducing a single currency in 2003. At the time he suggested calling it the altyn, and 2011 was named the date of the possible introduction of the new currency. The work seems to have been thorough - even models of banknotes were offered. But the idea had formal support from the leaders of the Customs Union, in fact, it almost was not promoted. Moreover, in May 2014 when the agreement on the establishment of the EAEC was signed, the issue of the currency was postponed until 2025. Fundamental problems were not resolved - for example, the creation of an emission center.When it came to the introduction of the single currency of Russia and Belarus in the framework of the Union State of the two countries, the Belorussian leader Alexander Lukashenko insisted on the creation of emission centers in Moscow and Minsk, and then rejected the idea of establishing a central bank of the EAEC. But now the situation seems a bit different. On March 10 Vladimir Putin instructed the Bank of Russia to test the feasibility of establishing a monetary union within the EAEC. So the process is likely to be accelerated and it is possible that the altyn could be the unified payment system in the future.
By Victoria Panfilova, an observer of Nezavisimaya Gazeta, exclusively for Vestnik Kavkaza
The introduction of a single currency in the countries of the Eurasian Economic Union (EAEC) may become a reality soon. President of Russia Vladimir Putin came up with the idea of a currency union at a meeting in Astana with his EAEC colleagues, the President of Kazakhstan Nursultan Nazarbayev and the President of Belarus Alexander Lukashenko. The Russian leader said that the introduction of a new currency in the next year will help to protect the economy of the EAEC. However, experts believe that the introduction of a single currency is a premature step, assuming that the proposal of the Russian leader is dictated by the external economic situation. Perhaps the situation with the single currency may gain greater certainty at the next presidential meeting in Moscow on May 8.
"We agreed to continue coordinating our monetary policy. I think the time has come to discuss the possibility of creating a future currency union," Vladimir Putin said in Astana. However, it is appropriate to recall that Kazakh President Nursultan Nazarbayev took the initiative of introducing a single currency in 2003. At the time he suggested calling it the altyn, and 2011 was named the date of the possible introduction of the new currency. The work seems to have been thorough - even models of banknotes were offered. But the idea had formal support from the leaders of the Customs Union, in fact, it almost was not promoted. Moreover, in May 2014 when the agreement on the establishment of the EAEC was signed, the issue of the currency was postponed until 2025. Fundamental problems were not resolved - for example, the creation of an emission center.
When it came to the introduction of the single currency of Russia and Belarus in the framework of the Union State of the two countries, the Belorussian leader Alexander Lukashenko insisted on the creation of emission centers in Moscow and Minsk, and then rejected the idea of establishing a central bank of the EAEC. But now the situation seems a bit different. On March 10 Vladimir Putin instructed the Bank of Russia to test the feasibility of establishing a monetary union within the EAEC. So the process is likely to be accelerated and it is possible that the altyn could be the unified payment system in the future.
The director of the Integration Development Department of the Eurasian Economic Commission, Saadat Asanseitova, believes that all EAEC agreements will come into full effect by 2015. "By the end of 2015 all the barriers that exist in the goods market should be removed. From 2016 it is expected to create a single market of medical devices and drugs. The issue in the alcohol market will be solved. Then we plan to resolve all issues in the energy market in 2019. And already from 2025 to create a single market for oil and gas. And only then should we start working on finance," Saadat Asanseitova told Vestnik Kavkaza. The formation of the financial services market is a very important area. According to her, an agreement on the creation of a multifunctional body for financial market regulation is only expected to be signed by 2025. But, according to Asanseitova, it is premature to talk about the creation of a single currency.
Alexander Lukashenko has talked about that. According to him, the transition to a single currency is the final stage of integration, which will spearhead the creation of common markets - goods, capital, labor. "I don’t think this will happen tomorrow and I don’t think it will happen during my presidential lifetime, because a number of issues must be solved before such a big change can be made," he said about the prospects of the introduction of a single currency during the EAEC press conference in January.
An expert at the Institute of Oriental Studies, Stanislav Pritchin, also believes that Russia's partners in the EAEC are not ready for the creation of a single currency at this stage of integration. "The example of the European Union shows that it is very difficult to introduce a single currency, which is sensitive to the specific characteristics of the financial and economic systems of all the participants, without losses. And the EU had problems with the changeover to the euro. We need to make it when we will have very close economic models, very similar levels of currency regulation," Stanislav Pritchin told Vestnik Kavkaza.
A Kazakhstani financial analyst, the director of the Almagest consulting company, Aidarkhan Kussainov, believes that Putin's phrase shouldn't be taken literally: "EAEC countries are not ready to create a monetary union today, only the prospects of its creation are being discussed." According to the expert, in the beginning there will be non-cash money, which will be in circulation among the EAEC countries, as it was in the European Union, when a single unit of account was created - the European Currency Unit (ECU). It was a kind of unit for the allocation. According to Kussainov, in the next year or two we may receive some virtual translation unit for calculating the exchange rates of EAEC in relation to each other, to escape from dependence on the dollar and the euro. "As for the future introduction of the new single currency - this is a very complex issue, and now, in my opinion, we shouldn't escalate the hype around it," the financial analyst said.
