Lukashenko, Putin agree on setting up a single market mechanism, merging some government functions

Lukashenko, Putin agree on setting up a single market mechanism, merging some government functions
Lukashenko, Putin agree on setting up a single market mechanism, merging some government functions
By Ben Aris in Berlin December 1, 2019

Belarus and Russia have taken a step closer to forming a single market, based on the same principles as the European Union (EU), after a top diplomat said Belarus' President Alexander Lukashenko and Russian President Vladimir Putin have signed off on a single parliament and merged many aspects of the two economies, Belsat reported on December 1.

“The presidents admitted that the objectives set [in the 1999 Union Treaty] are ambitious and they should not need to be changed. These are the following: a shift to unified tax legislation, the creation of common oil, gas and electricity markets, establishing a single parliament and government with certain powers, when independent Russia and Belarus delegate certain functions which shall be performed to the upper instance. Such challenge is now being dealt,” Belarusian Ambassador to Russia Uladzimir Syamashka said in an interview with TUT.BY.

According to the diplomat, 20 of 31 roadmaps for deeper integration have been endorsed.

The potential merger of some aspects of government and the two economies is a controversial topic. Some have speculated that Putin is keen to politically merge the two countries as a way of dodging the constitutional two term cap on his presidency. If a new country is formed out of a merged Russia and Belarus then it will require a expanded constitution and negate Putin’s term limit.

The merger between Belarus and Russia is also politically popular with the Russian population and is a trope that has been regularly rolled out during Russian elections since former president Boris Yeltsin’s day.

But there is also a serious economic logic behind bringing the two countries closer together, both economically and politically. Belarus and Russia are already joined in the Eurasia Economic Union (EEU), an economic single market modelled on the EU that is supposed to create a borderless single market with free travel for goods, labour and capital.

Belarus is keen on closer economic integration as that will improve its access to the large and rich Russian market. For his part Putin’s long-term economic goal is to create a more unified EEU with similar rules to the EU in preparation for a merger, or at least partnership deal, with the EU that will create a single market from “Lisbon to Vladivostok”. Both French President Emmanuel Macron and German Chancellor Angela Merkel have used this phrase in a sop to Putin during negotiations with Russia over a variety of problems in recent years.

While Russia has turned to China since 2014 in the face of US sanctions, various senior Russian politicians have told bne IntelliNews in interviews that Russia sees its long-term future as partnered with the EU as a way to counterbalance China’s economic, political and military rise. The deepening of the integration between Belarus and Russia can be seen as a step towards creating a true single market under the auspices of the EEU in preparation for creating a trans-continental single market.

The deal was agreed by the prime ministers of the two states on September 6, Kommersant reports. The final agreements will be signed by the two presidents who are reportedly going to meet before the end of the year.

The integration may be ‘deeper’ than that in the European Union, says Kommersant, which has seen the draft agreement. The document provides for the partial economic integration at the same level as the EU member states; in some fields, the integration will be similar to that of a confederation or even federation, the paper says.

Commenting on the Kommersant piece, Lukashenko’s press secretary Natallya Eysmant told the Belarusian newspaper Nasha Niva that the terms “confederation” and “federation” used in the article were inaccurate and the independence and sovereignty of Belarus and Russia are “sacred”, she added.

Anatol Hlaz, spokesman for the Ministry of Foreign Affairs of Belarus, said in September that the deepening of the integration of Belarus and Russia would not go beyond the limits of the Union Treaty of 1999.

Other measures including in the plan are a single currency, a single parliament, a council of ministers, a court and symbols. In addition, the union of the two countries should have a single monetary, currency, tax and price policy, common rules of competition and consumer protection, joint transport and energy systems, a single trade and customs tariff policy, a single legislation on foreign investment and other functions, Kommersant reports.

The full agreement on deepening integration is slated to be signed on December 8. In late October, Belarusian Prime Minister Syarhei Rumas said that the Belarus-Russia integration programme would soon be prepared and handed over to the leaders of the two countries. The Belarusian authorities have not made the details of the programme signed by the two prime ministers in early September public.