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06.11.2015

EURASIAN ECONOMIC UNION AND ARMENIA

   

Areg Gharabegian

October 2015

The Eurasian Economic Union (EEU) is an economic union of states which was established on May 2014 by the leaders of Belarus, Kazakhstan, and Russia, and came into effect on January 1, 2015. Armenia joined on January 2, 2015 and Kyrgyzstan joined on August 6, 2015.

In 1994, the President of Kazakhstan first suggested the idea of creating a regional trading bloc. Numerous treaties were subsequently signed to establish the trading bloc gradually. Many politicians, philosophers, and political scientists have since called for further integration towards a political, military and cultural union; however, Kazakhstan has insisted the union stay purely economic.

Tajikistan has been invited to join the union and membership negotiations are underway. Uzbekistan was hesitant to join the Economic Union; however, Uzbekistan began negotiation when Russia announced it would write off $865 million off debt owed by the country to Russia if Uzbekistan joins EEU. Turkey was also extended an invitation to join the EEU by Kazakhstan's President.

Ukraine past president Viktor Yanukovych’s decision to abandon an association agreement with the European Union and exclusively pursue integration with the EEU was a key factor in triggering the protests that ended his term as president of Ukraine. The country’s membership in the EEU was seen by some analysts as the key to the success of the union as Ukraine has the second largest economy of any of the former Soviet Union republics.

The union is significantly more unattractive and even less viable than it was first conceived by not having Ukraine as a member, which undermines the economic and trade potential of the union. In addition, the impact of Western sanctions on the Russian economy lessens the value and viability of the union. Moreover, in the wake of the fall in the value of the Russian ruble and the decline in world oil prices, Russia is no longer the economic powerhouse it was once.

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