One Currency?: Putin Calls For "Monetary Union" In EEU

ONE CURRENCY?: PUTIN CALLS FOR “MONETARY UNION” IN EEU

ECONOMY | 11.03.15 | 16:10

By SARA KHOJOYAN
ArmeniaNow reporter

Russian President Vladimir Putin’s call for a “monetary union” to
operate within the Eurasian Economic Union (EEU) has raised questions
and concerns in Armenia, the EEU’s newest member.

Enlarge Photo

What is a monetary union, does it imply a single currency in the EEU
territory, would participation be mandatory?

Putin instructed the Bank of Russia, jointly with the Government of the
Russian Federation and in cooperation with the Central Banks of the EEU
member states, “to determine future directions of integration in the
monetary and financial sectors within the framework of the Eurasian
Economic Union with the study of the feasibility of establishing a
currency union in the future.”

There was a dialogue about creating a single currency in the EEU
space still a year ago, but the program was provisioned to be passed
in 2020-2025 when the EEU would be more stabilized.

However in the EEU countries, specifically, in Russia, economic
changes have drastically changed the situation, Armenian National
Congress (ANC) Party representative, economist Vahagn Khachatryan
told ArmeniaNow, and now only economic tools will not be effective
without financial tools in the EEU.

“Since certain problems have appeared in the EEU related to currency
fluctuation, EEU country economies greatly suffer. A single customs
union is not enough to provide equal economic opportunities for
those countries, and the crisis made the situation even clearer,”
Khachatryan says, explaining the need for a single currency.

According to Khachatryan, even though for countries with small
economies it is hard to keep their own currency stable, Armenia has
been able to do so through the efforts of its Central Bank.

“However, we must consider also, that the Armenian economy has
dependency on the Russian currency and must always take into
consideration the Russian currency policy,” the economist said.

From: A. Papazian