BELARUS NEWS AND ANALYSIS

DATE:

25/01/2007

Russia-Belarus single currency still distant prospect - speaker

MOSCOW, January 25 (RIA Novosti) - Boris Gryzlov, speaker of Russia's lower house of parliament, said the lack of a free trade zone and a single emission center made it impossible to introduce a single currency for the Russia-Belarus union project.

The two ex-Soviet neighbors first declared their intention to build a Union State with a common economic, customs and political space in 1997. But the negotiations have been complicated by a host of issues, which culminated in an energy row earlier this year.

"Until a free trade zone has been formed and an emission center set up, it is unrealistic to talk about a single currency," Gryzlov, who is also a leader of the pro-Kremlin ruling party United Russia, told a special session of the Duma council for trade and economic cooperation with Belarus.

Gryzlov also complained about 59 restrictions on Russian exports in effect in Belarus. "Our Belarusian colleagues have been informed of our displeasure," he said.

Talking about the Constitutional Act of the Union State, Gryzlov said it was a difficult and time-consuming process.

Negotiations have been progressing with difficulty on the act, a transitional constitution for the Union State, which the two countries have been considering since 1997. The document is designed to establish common economic, customs and political regulations.

"Adopting the Constitutional Act is a lengthy process of rapprochement, which depends on our ability to build trusting relations," he said.

The sides seemed close to an agreement last year and planned a referendum on the document's adoption but Belarusian President Alexander Lukashenko said Russia unexpectedly proposed new amendments out of concern that the Union State and its executive bodies would have too much authority.

Gryzlov elaborated on bilateral trade, saying it increased 41% last year to $17.6 billion, with Russian exports totaling at least 57% of the figure. He said 80 out of 89 Russian Federation constituent members cooperated with Belarus on economic, scientific, technological and humanitarian issues.

The Russian parliamentary speaker also called for making bilateral relations transparent, both at the legislative and practical levels. He said Russia and Belarus had been seeking integration since the 1990s, and signed an agreement to set up the Union State in 1999. Since then, the two countries had signed 129 deals in various spheres, he said.

The speaker also said the Union State budget was 3.1 billion rubles ($117 million) in 2006, and increased by 30% in 2007.

According to the Russian parliamentary speaker, Russian and Belarusian energy systems cannot be merged because the two countries pursue different economic development models.

He said the merger stalled over the lack of progress in unifying tax legislation and the legislative base for securities emission, as well as in forming a single pricing policy.

"In such conditions and with two different approaches, it seems impossible to put together our energy systems so far," Gryzlov said.

Relations between the two countries hit their lowest when Belarus tried to impose a transit levy on Russian oil passing across its territory to Europe at the beginning of the year in retaliation for new charges and gas price hikes imposed by Moscow. Minsk relented after Russia halted crude deliveries, affecting consumers in Europe.

Russia has traditionally been the closest ally of Belarus, whose leadership has become increasingly isolated in the West over clampdowns on civil and political freedoms. Belarus's authoritarian ruler Lukashenko and many other top officials have been banned from entering the United States and the European Union, and the EU has frozen Belarusian government assets.

Source:

http://en.rian.ru/russia/20070125/59693411.html