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  EEU: between politics and economy

Viktor Denisenko
2014 06 30

The profile of the major Moscow‘s geopolitical Project – Eurasian Economic Union (EEU) is becoming increasingly apparent. With this union Russia wants to strengthen its positions in the post-soviet space, but hardly the EEU will become a Soviet-Union‘s Option No 2. Moscow‘s goals are quite obvious, but will membership in this union be beneficial for Belarus and Kazakhstan?

Although there were doubts concerning future of Eurasian Economic Union, at the end of May the leaders of Russia, Belarus and Kazakhstan signed the Treaty on its establishment (the Treaty will come into force from the beginning of the next year). Armenia and Kyrgyzstan also seek membership in the Union; recently they‘ve been negotiating the membership in the Customs Union, predecessor of EEU. 

For quite a long time Eurasian Economic Union has been referred to as an active geopolitical association which could become a counterbalance to the European Union. Considerations on this could be found in the discussions about a two-pole world which, after the fall of the Soviet Union, was misbalanced, and in the philosophy of a „new Eurasianism“. The main ideologist of a „mystic Eurasia“ is a radical philosopher A.Dugin. His idea about the ontological confrontation between Russia (as basis of Eurasia) and the West has become a cornerstone of his theory. According to the classical binary opposition, the Western world is described as a world of evil; it is immoral and lacks spirituality which is opposite to Russia-Eurasia with their special spiritual mission.   

For quite a long time it seemed that A.Dugin and his „Eurasian“ movement was outside political life, but today popularity of this philosophy and ideology has increased in Russia. Confrontation between the West and Russia could be discerned in the statements of Russian officials long time ago. Competition between the two geopolitical associations - EU and EEU – could be interpreted within the context of S.Huntington‘s clash of civilizations, but Moscow is first of all concerned about the geopolitical (and philosophical) aspect which is hardly attractive to Belarus and Kazakhstan. 

In the emerging EEU Minsk and Astana are first of all concerned about economic issues. That is why Eurasian Economic Union emerged instead of European Union. The title of the first highlights the key aspect of this association, i.e. the economic aspect. But this union will hardly manage to limit its activities to economic relations, especially having in mind Russia‘s ability to bundle economic issues with political.

The issue of sovereignty of separate members of a new union was raised before signing the Treaty. The first to highlight that was Russia‘s Deputy Prime Minister I.Shuvalov. He said that Kazakhstan was most of all concerned about sovereignty, although acknowledged that in current political life it is not easy to make a distinction between political and economical issues. Some time ago the leader of Kazakhstan N.Nazarbayev was against an EEU parliament, and it seems that so far establishment of such a political structure is eliminated from the agenda of EEU. However, I.Shuvalov highlighted that sooner or later such a body will be necessary for a new union.

The attempts to limit EEU‘s relevance to economic issues don‘t seem convincing either. Eurasian Economic Union can be hardly imagined as an alliance of two equal partners not only because of different economic potential of its members, but also because of different interests of separate states.

According to S.Shelin, political observer of Rosbalt.ru, none of the partners seek simple economic integration in EEU: Moscow dreams about a new Soviet Union; Belarus and Kazakhstan give certain political preferences to Moscow but in turn they require realistic economic concessions and subsidies. According to Shelin, „strange proximity“ of the three countries – the architects of EEU – will finally disappoint everybody. 

Gazeta.ru also cannot agree with the statement that a new union is exceptionally an economic Project. According to the portal, the EEU Treaty is full of various exemptions and restrictions which will hinder economic integration. Kazakhstan and Belarus require a uniform approach toward movement of goods and customs administration within the territory of the Union; but if Russia agrees to unify trading rules, its budget will entail huge revenue losses. For instance, in case of elimination of export duties on oil products Russia will lose about 4 billion US$ annually. Today Moscow can hardly afford the above concessions.  

So far the majority of decisions on disputable issues are postponed. It is envisaged to gradually consider them during the coming decade, until the year 2025. This also demonstrates that signing of the Treaty on EEU was political rather than economical action. 

It‘ll be especially interesting to observe the first years of EEU. It is a union of three autocratic states. It means that quite a lot in the Union will depend on the ability of the three leaders to reach the agreement. Ambitions of one of them might aggravate problem-solving processes. Without any doubt, Moscow will seek dominance in the Union, and influence on EEU‘s decisions, but this will be in contradiction with the interests of Minsk and Astana.

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