Russia, Balrus, and Kazakhstan created the Eurasion Economic Union after years of negotiations. However, Russian President Vladimir Putin is missing Ukraine, the crown jewel of the USSR.
But Putin hopes this union changes minds.
“We are creating a powerful and attractive center of economic development, a major regional market bringing together over 170 million people,” Putin claimed.
The economic output amount is $2.2 trillion a year. The Associated Press provided an in-depth look into the deal.
The union is the development of the existing Customs Union including the same nations. In addition to free trade, it coordinates the members’ financial systems and regulates industrial and agricultural policies along with their labor markets and transport systems. The deal stops short of introducing a single currency and delays the creation of a common energy market.
Moscow will host the top executive body of the new alliance. Its high court will be based in Belarus, and the top financial regulator will be located in Kazakhstan.
Belarus, which borders Ukraine, Latvia, Lithuania, and Poland, relies on Russia for energy and gas. President Alexander Lukashenko announced he was not 100% happy with the deal, but it is a head start.
Kazakhstan does not rely on Russia for energy and gas since it has become a star in the energy world. The leaders signed the deal in Kazakhstan’s capital Astana, which is known for energy production. The large country also seeks to hold good relationships with Russia and China along with the West.
Armenia will join next month and Kyrgyzstan will join the Customs Union by the end of the year.
Putin once said the collapse of the Soviet Union was the biggest geopolitical disaster of the 20th century. He is ex-KGB and does not hide his love of the ex-Soviet Union. He has tried to bring old Soviet states together, mostly by coercion and threats, but other states choose to branch out with the West. Ukraine’s now ousted Russia-backed President Viktor Yanukovych chose a bailout from Russia and closer ties to Moscow instead of a trade deal with the European Union. This directly caused the Euromaidan protests in Kyiv and led to Yanukovych’s ouster and Russian annexation of Crimea from Ukraine. Because of Putin’s actions, Russia and many of his inner circle have sanctions placed on them by the EU and West, which makes Moscow an undesirable trading partner.
Moscow and state-owned gas giant Gazprom have taken steps to punish Ukraine for refusing ties with Russia. Gazprom threatened numerous times to shut off Ukraine’s gas and then raised the price of gas by almost 80%. Russia justified Crimea’s annexation on the basis of protecting ethnic Russians, which raised red flags in Latvia and Estonia. Russian diplomats noted that Moscow was worried about treatment of Russians in those countries and even passed a law that allows Moscow to intervene in another country on behalf of Russians and eased citizenship restrictions for ethnic Russians.