Best of the Week
Most Popular
1.The Greatest Stock Market Crash Of Your Life Is Just Ahead… – Warns Harry Dent - GoldCore
2.Budget 2016: Borrowing, Lifetime ISA, House Prices, Economy, Syria, Brexit and Stocks - Nadeem_Walayat
3.Gold Price Intermediate Top - Clive_Maund
4.Brussels Terror Attacks, Death of the European Union, BrExit Wake up Call - Nadeem_Walayat
5.Stock Market Maybe This Time is Different? - Tony_Caldaro
6.UK House Asking Prices Break Above £300k! Housing Market Paralysis - Nadeem_Walayat
7.A Big Reason Why Silver Price Is Set To Soar - Hubert_Moolman
8.The Financial Crisis Has Just Begun; Is The American Dream Is Over? - Chris_Vermeulen
9.Gold Stocks Spring Rally - Zeal_LLC
10.GLX, GLDX, Baby Gold Bull Market Stillborn? - Rambus_Chartology
Last 7 days
Derivatives Crisis Of Banks…Worldwide - 3rd May 16
Bank of North Dakota Soars Despite Oil Bust: A Blueprint for California? - 3rd May 16
Stock Market Technical Analysis - 3rd May 16
Central Banks Need a Higher Gold Price : Hello GATA - 3rd May 16
A Currency War Battle That Europe and Japan Can’t Afford To Lose - 3rd May 16
When the Truth is Found to be Lies, Confidence in Currency Dies - 2nd May 16
How Brexit Could Help All of Europe - 2nd May 16
US House Prices Outpacing Official Inflation Rate, Household Income - 2nd May 16
USD Still Declining... - 2nd May 16
Gold & Silver Rally Huge as Central Bankers & Analysts Flub - 2nd May 16
Stock Market Bounce Day - 2nd May 16
Stock Market Uncertainty Following Two-Month Long Rally - Will It Continue? - 2nd May 16
Stock Market Correction Underway "Upside Objective Reached" - 2nd May 16
USD, Yen and an ‘Inflation Trade’ Update - 2nd May 16
Gold Commitments of Traders and More - 1st May 16
The Magic of Gold Ratio Charts - 1st May 16
Consensus Forming: China Heading Back Into Financial Crisis - 30th Apr 16
The Next Technical Price Targets for Gold & Silver - 30th Apr 16
Stock Market Downtrend Should be Underway - 30th Apr 16
Gold And Silver – A Clarion Alarm Call For All Paper Assets - 30th Apr 16
US Economic Statistics LIES, LIES AND OMG, MORE LIES - 30th Apr 16
Stock Market Strong Elliott Wave Relationship is Developing - 29th Apr 16
Fed's Kaplan: Brexit to Factor in US June Interest Rate Decision - 29th Apr 16
Silver Miners Strong in Grim Q4 - 29th Apr 16
Is Silver a better bet than Gold in the Near Future? - 29th Apr 16
How to Use the CoT Report in Gold Investing? - 29th Apr 16
Sri Lanka is Intriguing: Areas to Consider for Value Investing - 29th Apr 16
Gold “Chart of The Decade” – Maths Suggest $10,000 Per Ounce Says Rickards - 29th Apr 16
Are We or Are We Not in a New Gold Bull Market? - 29th Apr 16
Silver: The “Five Year Plan” and the Great Leap Forward - 28th Apr 16
Michael Hudson: The Wall Street Economy Has Taken Over The Economy and Is Draining It! - 28th Apr 16
AUD/USD - Trend Reversal or Just a Bigger Pullback? - 28th Apr 16
A Gold Revaluation Could Transform Your Financial Status - Overnight - 28th Apr 16
Monetary Policies Misunderstood - 28th Apr 16
Gold Bullion vs Gold Miners - 28th Apr 16
OECD Suggests BrExit Would Cut Net Migration by 1.2 Million by 2030 - 28th Apr 16
MP Naz Shah Punished for Tweets Made During Israel's Genocide of Gaza Palestinian People - 28th Apr 16
Global Recession in 2016 and Beyond - The Obvious Evidence - 27th Apr 16
Why Gold Bugs Need to Stop Listening to The Fear Mongers and Start Thinking for a Change - 27th Apr 16
BlackRock’s Fink: Fed to Raise Interest Rates by Quarter Point ‘at Best’ - 27th Apr 16
Gold More Productive Than Cash?! - 27th Apr 16
Donald Trump Will Fire Janet Yellen and Be Trapped - 27th Apr 16
Money Saving Gardening by Propagating Roses From Cuttings - Propagating Rose Plants Over 2.5 Years - 27th Apr 16
Facebook Censors Pro Trump and Negative Hillary News - 27th Apr 16
This is the Era of the Democrats and Your Taxes are Going Up - 27th Apr 16
Long Awaited Gold Price Breakout - 26th Apr 16
Crude Oil Price Double Top or Further Rally? - 26th Apr 16
Madness in the Crimex Gold and Silver Trading Pits - 26th Apr 16
Britain's Prospects: GBP and BREXIT - MAP Wave Analysis - 26th Apr 16
CRB, Gold, Oil, Cotton, Coffee - 7 Must See Commodities Charts - 26th Apr 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Catching a Falling Financial Knife

Will USSR Rise From Ashes Through Eurasian Currency?

Politics / Fiat Currency Nov 19, 2012 - 12:23 PM GMT

By: Pravda

Politics

Best Financial Markets Analysis ArticleThe creation of the supranational currency within the scope of the Customs Union is inevitable, Prime Minister of Armenia, Tigran Sargsyan, believes. According to him, this should be the next stage of integration within the organization, which makes sense from the point of view of simplification of currency circulation in transfers. The new currency may see the light on January 1, 2015.


As the prime minister of Armenia said during the meeting with members of the Club of Editors of the CIS, Baltic countries and Georgia, it would be advantageous for three member states of the Customs Union to have a supranational currency. "This is beneficial both to economic entities and citizens. What's the point in having a national currency and losing money during transfers?" said Sargsyan.

The Armenian Prime Minister also said that Russia, Belarus and Kazakhstan are now at about the same level of development, "and no country is going to live at the expense of another." According to Sargsyan, five years of coordinated monetary and fiscal policy will be enough for everyone to realize the need for a single currency. However, for representatives of the Russian side this question is important already today. The active discussion of the issue began in the summer of 2012.

Print version Font Size Send to friend"In the summer of this year, Russian Prime Minister Medvedev called for the creation of a single currency for Russia, Belarus and Kazakhstan. He repeated a similar idea at the recent CIS forum in Yalta - Alexander Razuvayev, Ph.D. and Director Analytical Department of Alpari said in an interview with Pravda.Ru. - In principle, it may seem that the idea looks a little strange against the background of the crisis in the euro zone and the probability that not only Greece, but perhaps Spain may leave the euro zone, but there is a grain of common sense here, because money decides a lot in today's world. Only a single currency may actually unite the single economic space."

Originally, the main challenge to the single currency of the Customs Union was the fact that the idea was presented by the Russian government from the dominant position. That is, Russia offered the CIS countries to join the ruble zone, while Moscow would retain the right to control the money-printing process, and other countries would automatically fall into dependence on the Russian Central Bank and the Finance Ministry. Needless to say that this approach left Belarus and Kazakhstan dissatisfied. As a result, everyone started to pull the blanket over in this matter.

"Some would say that Belarus has planned economy, some would say that there are problems in Kazakhstan. However, we must realize that Russia's economy is much larger than that of Kazakhstan, and especially of Belarus. One shouldn't forget that Russia has world's third largest international reserves, more than 500 billion dollars, and Russia's GDP this year is about 2 trillion. Accordingly, given the positive macroeconomic situation in Russia, this includes the growth of more than 4 percent, and the budget surplus, so to form a currency area like that would be easy enough, taking into consideration the fact that there is political will for that on the part of Russia, Belarus and Kazakhstan. As for Belarus, the idea was very popular 10 years ago, but during that time Mr. Lukashenko wanted to have the emission center. Well, of course, neither the Russian Finance Ministry nor the Russian Central Bank could accept that," says Alexander Razuvayev.

Another major problem of the Customs Union was Ukraine's reluctance to join it. Experts say that the full integration within the Customs Union and the Eurasian Economic Community is impossible without the participation of Ukraine. However, it was reported at the end of last week that Ukraine's Ministry of Foreign Affairs reiterated the impossibility of joining the Customs Union, as the country sets the course for European integration. The reasonable arguments saying that the Russian market was much more advantageous for Ukraine than the Ukrainian was for Russia, have not brought any results.

Surprisingly, though, the free trade idea between the CIS countries and Russia inspired the Crimean Republic, the first president of which, Yuri Meshkov, unexpectedly expressed his intention to join the Customs Union regardless of the Ukraine. Moscow does not hope much for the influence of the Crimea, although it may ring another "bell" for Ukraine's Yanukovych. Experts tend to see the "hand of the Kremlin" here, rather than an independent decision made by the head of the autonomous territory. However, it is no secret that Russia can make Ukraine join the union through the use of more abrupt, manipulative measures.

"In today's world, only 200-250-million-strong markets can be self-sufficient. Kazakhstan and Russia, plus Belarus is somewhat less. And, accordingly, the system can work only if Ukraine is integrated. One shouldn't forget that Russia can put pressure on Ukraine through energy carriers," says Alexander Razuvayev.

To date, Russia has taken a detached attitude to Ukraine. Ukrainian officials say that there could be a possibility for the country to join the Customs Union in the event the economic situation in the euro zone worsens. For the time being, Ukraine is standing at a crossroads, wondering which union to join.

"Either way, it is believed that the new currency will appear on 1 January 2015, although possibly earlier. Political sovereignty can hardly be questioned. It is unlikely that it will be the Russian ruble. Most likely, it will be a new Eurasian currency, and, consequently, we will have a new Eurasian Central Bank. Of course, it will be a local currency, because the size of combined economies is still a lot smaller than the economy of the United States, China, or the European Union. However, it will really mark the actual denunciation of Belovezha Accords and restoration of the Soviet Union, albeit in a new version 2.0 and on absolutely new market and capitalist principles," the expert concluded.

Maria Snytkova

Pravda.ru

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Pravda Archive

© 2005-2016 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Catching a Falling Financial Knife