Putin denies the forging of the Eurasian Economic Union with two
other former Soviet republics, coupled with Russia's annexation of
Crimea from Ukraine, means he wants to rebuild a post-communist
Soviet Union or as much of it as he can.
He does, however, intend the alliance, with a market of 170 million
people, a combined annual GDP of $2.7 trillion and vast energy
riches, to demonstrate that Western sanctions imposed over the
crisis in Ukraine will not isolate Russia.
But the world's major economic powers may not be quaking in their
Ukraine has snubbed the union, other ex-Soviet states are wary of
joining a body that could give Moscow leverage over them again and
Kazakhstan fiercely defended its sovereignty during negotiations,
forcing Putin to water down his ambitions.
"Our meeting today of course has a special and, without
exaggeration, an epoch-making significance," Putin said of the
treaty, signed to loud applause from rows of seated officials in the
modern Kazakh capital, Astana.
"This document brings our countries to a new stage of integration
while fully preserving the states' sovereignty."
Kazakh President Nursultan Nazarbayev, seated at a long white table
at which he, Putin and Belarusian President Alexander Lukashenko
signed the treaty, said he envisaged the new union as being a major
"The main mission of our union in the first half of the 21st century
is ... first, to gain a natural competitive advantage as an economic
bridge between the East and the West, between Europe and Asia," he
The Eurasian Economic Union will formally come into force on Jan. 1,
once it has passed the formality of being approved by the three
former Soviet republics' parliaments.
The union - an idea first raised by Nazarbayev in 1994 but widely
ignored at the time - brings to life Putin's dream of uniting
like-minded countries, capitalising on the nostalgia of many
Russians for the order and relative economic and political stability
of the communist Soviet empire that collapsed in 1991.
After 14 years in power, he sees its creation as a personal
political legacy for when he eventually steps aside and it has
become one of the "big ideas" of his third term as president.
The treaty deepens ties forged when the three countries took the
initial step of creating a customs union in 2010 and guarantees the
free transit of goods, services, capital and workforce and
coordinates policy for major economic sectors.
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Putin noted that Kazakhstan and Russia accounted for one-fifth of
the world's natural gas reserves and 15 percent of oil reserves -
although Belarus is not an energy producer, and its struggling
economy looks like a burden for Astana and Moscow.
Saturday if he was trying to revive the Soviet empire, Putin said:
"They try to stick this label on us - a label that we are trying to
restore an empire, the Soviet Union, make everyone subordinate. This
absolutely does not correspond to reality."
The new union, however, reinforces Putin's drive to show Russia will
not be isolated by sanctions, a message he sent by reaching a
$400-billion gas supply deal with China last week.
Any hopes of rebuilding a large part of the Soviet Union have been
thwarted by Ukraine, which opted not to join the union after its
Moscow-leaning president was ousted and decided to build trade and
political ties with the much larger EU instead.
That was a huge blow, depriving the union of a market of 45 million
people and, in the words of ex-Kremlin spin doctor Gleb Pavlovsky,
making Putin's original dream "impossible" to fulfil.
Armenia and Kyrgyzstan, hardly economic powerhouses, are considering
joining but other ex-Soviet republics, including oil and gas
producer Azerbaijan, gas-rich Turkmenistan and Uzbekistan with its
market of 30 million people, have steered clear of the union.
The creation of the new alliance also involves costs for Russia,
posing an extra burden on an economy already on the brink of
Russian Deputy Finance Minister Sergei Shatalov told Reuters in
March that Belarus and Kazakhstan received about $6 billion annually
from Russia in direct and indirect support, and said that could
increase by $30 billion if all trade restrictions were lifted in
2015 after the union is created.
(Additional reporting by Dmitry Solovyov in Almaty, Writing by
Timothy Heritage, Editing by Elizabeth Piper and David Stamp)
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