BOFIT Viikkokatsaus / BOFIT Weekly Review 2015/01
The EEU seeks greater economic integration among its member states, including coordinated economic policies and common financial and energy markets. The countries agreed already in 2012 to the free movement of goods, services, labour and capital, but with little success so far.
Even in the best-case scenario, the EEU will not function as declared for many years. Implementation still requires agreement on numerous issues left open in earlier negotiations. Moreover, the member countries face daunting tasks of harmonising their national legislation and regulations with those of the EEU. The EEU accession documents also grant member states numerous exemptions and several years of transition time. For example, Armenia has been granted an eight-year transition period before it must fully meet its membership requirements.
Deeper integration is also complicated by the fact that the customs union never functioned smoothly. Russia and Belarus have constantly squabbled, each blaming the other for e.g. violating customs union rules, especially since Russia banned imports of Western food products. Russia claims Belarus began to export banned products to Russia. Both countries have gone as far as again setting up customs inspection points on their borders to check goods before they cross into their territory.
Customs union partners have also suffered from the Russian ruble’s recent demise. Belarus, for example, has demanded its food exports to Russia be priced in dollars or euros rather than rubles.