Russia and Belarus are planning deep economic integration. Much deeper than their current one.
It was reported in the Russian edition of Kommersant, which, based on its own sources, spoke about the details of a possible economic association. The media claimed that on September 6 the prime ministers of Russia and Belarus agreed on the action program "with the possibility of minor changes."
The Ministry of Economy of Belarus has already stated that the plan for the development of integration does not threaten the independence of Minsk, while Russia emphasizes that the economic integration program "is preliminary."
At the same time, according to Dmitry Peskov, the press secretary of the President of Russia, the document should be submitted to the presidents of the two countries by the end of 2019.
Apparently, this is about December 2019. According to Vladimir Semashko, Belarus Ambassador to Russia, the presidents of the two countries can approve the integration program on December 8.
On this day, the 20th anniversary of the signing of the Treaty on the creation of the Union State of Russia and Belarus will be marked.
Union State of Russia and Belarus
The official wording is as follows:
The supranational formation of the Russian Federation and the Republic of Belarus with a phased organized single political, economic, military, customs, currency, legal, humanitarian and cultural space.
Simply put, this is a very, very tight union of the two countries. And they even have a common holiday: Day of Unity of the Peoples of Belarus and Russia, which has been celebrated since April 2, 1997.
The signing of the treaty on the Union State took place in Moscow on December 8, 1999. Then, a Program of Action was also adopted to implement the provisions of the Treaty establishing the Union State.
The global goals were declared: to create a single parliament, government, and currency. However, in fact, integration into the Union State was very uneven. For example, the country was going to introduce a single currency back in 2004. Then its introduction was postponed several times, later the topic generally stalled due to disagreements between the countries.
Actually, the disagreements on the implementation of the program of action between the Russian Federation and Belarus essentially slowed down the process.
Which seems to have a chance to get a new boost.
According to Kommersant, the integration program is designed for 1.5 years and involves the partial integration of the two economic systems since January 2021.
"We are talking about at least a unified Tax Code, a foreign trade regime and a Civil Code, unified accounting of property and similar social guarantees, almost joint banking supervision, but with two central banks, a single regulator of oil, gas and electricity markets and harmonized state regulation of industries," the journalists write.
It is emphasized that this degree of integration means that "in fact, we are talking about the creation of a confederate state since 2022."
"It is unlikely that it will be completely equal for the parties: the Russian economy is 29 times larger than the Belarusian one," the Russian media say.
Which spheres would be united
It is assumed that a unified Tax Code will be adopted in the Union State of Russia and Belarus by April 1, 2021.
Customs policy and energy policy
The integration will also be affected. In particular, in the matter of energy policy, according to the document, it is supposed to create a “single regulator” of the markets for gas, oil, oil products and electricity. However, the details are not specified.
On the harmonization of macroeconomic policies, the unification of currency control, the unification of payment systems and, at least in part, a unified investment protection regime.
Since 2021, the central banks of Russia and Belarus should also work within the framework of an interstate agreement on common principles for banking and financial supervision.
It is proposed to harmonize the "industrial policy", the state regulation of agricultural markets, trade, transport and communications, antitrust policy, consumer protection regime.
By 2021, mutual unified access to public procurement, a unified system of property accounting and unification of economic legislation are promised: work will be carried out on the Foundations of civil law of the Union State.
Since January 2022, Russia and Belarus also intend to pursue a “coordinated policy” in the labor market and in the field of social protection, “however, in the latter case, only a “rapprochement of the level of social guarantees and in the future “equal rights” of citizens of the two countries” is promised.
Based on the information of Kommersant, it also includes submitting proposals to each other on November 1, 2019, on roadmaps for combining economies, preparing legislative steps for integration by the end of 2020 (in most cases, starting work in a unified regime on January 1, 2021).
The document does not include
The creation of a single budget and the introduction of a single currency, areas of defense, state security, the court, law enforcement and issues of the Ministry of Internal Affairs, education, health, science, and government.
"In December, we celebrate the 20th anniversary of our union agreement. Obviously, I don’t think that we should move any problems beyond this period. It is pressing us. What would we say by the twentieth birthday? There’s nothing to be said if we don’t solve all the current questions, and if we won’t sign a program of our further actions."
Russian Prime Minister Medvedev:
"[If we integrate,] the economies of our countries are closer, a full-fledged common market is finally formed, and so that the citizens of our countries get all the possible benefits from this."
Some countries have already responded to the plans of Russia and Belarus. For example, Linas Linkevicius, the Minister of Foreign Affairs of Lithuania, considered that the economic integration of the Russian Federation and Belarus would negatively affect Lithuania.
According to him, such integration means that Russia "will come even closer to Lithuania with all the ensuing consequences."
Belarus’s reaction to the suspicions that Russia will “corroborate” its partner in the Union has already been voiced.
“All the high-profile terms used in this article - the confederation, the federation, and so on – are just idle journalistic cliches,” Natalia Eismont, the presidential spokeswoman, said.
“The red flags are the sovereignty and independence of each country. In the integration processes, we are taking the steps that are economically feasible. No joint bodies are being created - countries are not ready for this,” she added.