Thursday

8th Dec 2016

Russia calls for EU talks with newly born Eurasian Union

Russia’s EU ambassador has urged Brussels to launch talks with the newly born Eurasian Economic Union (EAEU) despite the Ukraine crisis.

Vladimir Chizhov told EUobserver: “Our idea is to start official contacts between the EU and the EAEU as soon as possible. [German] chancellor Angela Merkel talked about this not long ago. The EU sanctions [on Russia] are not a hinder”.

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  • Eurasian Union leaders in Astana (Photo: kremlin.ru)

“I think that common sense advises us to explore the possibility of establishing a common economic space in the Eurasian region, including the focus countries of the Eastern Partnership [an EU policy on closer ties with Armenia, Azerbaijan, Belarus, Georgia, Moldova, and Ukraine]".

"We might think of a free trade zone encompassing all of the interested parties in Eurasia”.

He described the new, Russia-led bloc as a better partner for the EU than the US, with a dig at health standards in the US food industry.

“Do you believe it is wise to spend so much political energy on a free trade zone with the USA while you have more natural partners at your side, closer to home?", the ambassador said.

"We don’t even chlorinate our chickens".

The treaty establishing the Eurasian Union entered into life on Thursday (1 January).

It includes Armenia, Belarus, Kazakhstan, and Russia, with Kyrgyzstan to join in May.

Modelled on the EU, it is to have a Moscow-based executive body, the Eurasian Economic Commission, and a political body, the Supreme Eurasian Economic Council, where member states’ leaders take decisions by unanimity.

It is to have free movement of workers and begin with single market for construction, retail, and tourism.

It aims, over the next 10 years, to create a court in Minsk, a financial regulator in Astana and, possibly, to open Eurasian Economic Commission offices in Astana, Bishkek, Minsk, and Yerevan.

It also aims to launch free movement of capital, goods, and services, and to extend its single market to 40 other sectors, such as pharmaceuticals in 2016.

Ukraine was planned to join, but a popular revolt last year overthrew its Russia-friendly president and the new government signed a free trade treaty with the EU instead.

The developments prompted Russia to invade Ukraine and the EU and US to impose sanctions on Russia.

They also prompted the EU and US to accelerate talks on their own free trade treaty.

Russia’s Chizhov said neither the sanctions nor the recent slump in oil prices, and the resulting crash in the value of the rouble, will harm the Eurasian project.

“Russia has been wise enough to build substantial reserves to withstand the external pressure”, he noted.

“The situation with the rouble will be remedied. And we have to see the future of financial and energy markets in the long term. They are of no doubt in favour of Russia and Kazakhstan particularly”.

He said EU-US economic relations have an equally volatile history.

“Look at the currency rate of the euro compared with the dollar now and a year ago. Do you remember how many times the dollar was devalued since the 1960s? Do you remember when French president Charles De Gaulle in those days sent a ship loaded with US dollars to America to change them into gold?”.

The Russian ambassador played down internal tension with Belarus and Kazakhstan.

With friends like these …

Russia's allies were spooked by its assault on Ukraine.

They have profited from Russia’s ban on EU food imports by illegally re-exporting EU products to Russia.

The rouble crisis has also seen Belarus reimpose customs controls with Russia and has seen Belarus and Kazakhstan demand that Russia pays for trade in dollars.

Looking at Belarus, Chizhov said it “remains a close trusted partner … with which we share a deep common historical, cultural and linguistic heritage”.

Asked by EUobserver if Russia’s actions in Ukraine caused mistrust, he replied: “To date we have received no signals from our Belarusian partners on concerns related to your question”.

For his part, Steven Pifer, the former US ambassador to Ukraine, disagreed.

Pifer, now an analyst at Brookings, a Washington-based think tank, told the Boston NPR broadcaster on Thursday the main goal of the Eurasian Union is to extend Russia's control over its neighbours.

“They [Russia] are looking at it not just in economic terms but as a way to expand Russian influence in the region … by creating institutions which will give Moscow more influence in Kazakhstan and Belarus”, he said.

“Belarus and Kazakhstan have become much more wary about Russia”.

“My guess is both Kazakhstan and Belarus, while they see certain advantages to economic aspects of the union, they also have worries they don’t get pulled into Russian policies with which they disagree”.

No euro crisis after Italian vote, says EU

The Italian PM's resignation after a failed constitutional referendum has not changed the situation, the Eurogroup president has said. Financial markets have remained stable.

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