By Vestnik Kavkaza
According to the Ukrainian mass media, President of Russia Vladimir Putin has failed to persuade his colleague Viktor Yanukovich to join the Customs Union during a recent talk. They say that Yanukovich was ready to take a pause in cooperation with the EU, but Putin demanded not only to reject the association agreement with the European Union, but also to join the CU by 2015.
Meanwhile, Russian experts have no doubt that Eurasian integration will be more promising than the European one. Yevgeny Fyodorov, member of the State Duma, is sure that “in the context of the world crisis, mutual decisions should be made. The main thing which differentiates the Customs Union from other integration mechanisms is equality. The CU is a partnership of equal economies for balanced development. Every member of the CU can influence its decisions. Everybody understands that the potential of the CU’s development is greater than the EU’s, because Europe has no vast territories and rich resources. A territory means logistics, business, advantages. I'm not talking about common culture and common history, because it makes it easier to build mechanisms for equal control mechanisms. This means that the potential of the CU allows us living together much better than in the European countries".
Fedorov admits that this potential is not realized. "In the Customs Union, the main issue associated with the investments should be our priority on the agenda. We need to fine-tune the mechanism. These are not investments from Europe, it is (if we're talking about Russia) reinvestment, it is money that first was taken out of Russia, processed through the system of the European Central Bank, through European banks, and then it returned to Russia and Ukraine. Accordingly, the question of investment is a matter of further development of the Customs Union and the currency reform on the principles, paradoxically, of the European Central Bank. These are low domestic interest rates - 1-2 , 3-4 percent - but those rates themselves must be formed through Ukrainian banks, through the Russian Central Bank, through the banking system of Russia and Ukraine. Here is where investments should be from. This mechanism is needed to be debugged together”, Fedorov said.
In his view, "the more partners there are in the Customs Union, the faster this mechanism will be completed, because it works in Europe, in America, in China, in Japan. Should we cooperate with the countries of Europe? Yes, of course. But we should do it from equal positions, and therefore in strong positions, so we need to strengthen the position of the CU formation, to negotiate with Europe and to continue to cooperate with Europe, including the use of joint markets, including the accession to the WTO. Here is the main way that will allow for a short period of time, maybe 5-10 years, to raise the joint standard of living of the countries of Central Europe and to agree with them on joint partnership, as it has existed historically, over the last 500 years".
Deputy Director of the Institute of Economic Forecasting of the Russian Academy of Sciences Alexander Shirov experiences some satisfaction from the fact that the issue of association with the EU is coming to the fore in the Ukraine: "This pause is essential to the Ukrainian economy, in order to think again, to weigh, to consider what Ukraine has to go through and where it will have more advantages for its further development. Few people think about what the European Union will do to Ukraine when the contract on association is signed. How does it see the future role of Ukraine in the European family? It is important to understand whether most of the European establishment sees in Ukraine a member of the EU, and, if so, what resources are needed in order to bring the Ukrainian economy and living standards in line with European standards to join the European economic and political structure."
Shirov believes that one of the important questions is who will pay for it: "Are there among the countries that are mostly active in promoting the issue of the association any solvent countries, ie those countries that can find tens of billions of dollars and invest them first to solve the current problems of the Ukrainian economy in short -term - that is in a year or two – and then to bring Ukraine closer to all of these life and economic standards of the EU? It appears to me that among the countries that are leading in the process of European integration of Ukraine there are no such countries. And for those countries which have such funds (Germany, France, Italy, UK), the question about the future of Ukraine is not quite clear. It is a country with 50 million population and GDP of 170-180 million dollars, which has close trade and cooperative relations with Russia; how will it continue to live? Will it replace Poland in the Russian market ? Or vice versa? "
Shirov seems that the result of this strategy is not clear, both for Europe and for Ukraine : "Ukraine does not know how it will go further in the associate membership in the European Union. Eastern European countries have experienced a transformation shock and managed to improve the quality of production, to carry out the culling of inefficient enterprises and to stabilize the standards and quality of life. Ukraine is now in such a situation that if there is a deterioration of trade and economic relations with Russia , and I think that in the case of the signing of this agreement, it could happen, this is the threat of the second transformational shock. In the 1990s, a system of economic relations changed, and now we are once again striving to make the same mistake. This is a problem not only in Ukraine, but in Russia, too. Now we can use the potential of the industry of Ukraine; if we do not use it, we will have problems – both Russia and Ukraine.
