BOFIT Viikkokatsaus / BOFIT Weekly Review 2019/38
At the beginning of September, Russian Prime Minister Medvedev and Belarusian Prime Minister Rumas signed an action plan on creating a road map for economic integration. The integration program should be ready for presidential signing in December.
While no plan has been officially released, the Russian business daily Kommersant describes it in detail. The plan envisions integration of tax regulation, foreign trade policy, economic legislation, bank supervision and regulation of energy markets. On the other hand, discussion of issues like shared government structures and common currency are postponed. The integration process should begin in 2021.
Officially, Russia and Belarus have been in a rather close state union for two decades. In practice, however, the relationship has been strained e.g. by disagreements over oil and gas supplies and foreign policy. Furthermore, the relevance of the union became less clear in 2010 as Russia, Belarus and Kazakhstan established the Eurasian Customs Union which was later renamed Eurasian Economic Union (Armenia and Kyrgyzstan also joined it). This union of five states has similar goals as the bilateral union of Russia and Belarus. The new plan by Russia and Belarus may further complicate integration process within the Eurasian Union.