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Putin Proposes Talks On Currency Union

Belarusian Alyaksandr Lukashenka, Kazakh President Nursultan Nazarbaev, and Russian President Vladimir Putin (left to right) in Astana on March 20
Belarusian Alyaksandr Lukashenka, Kazakh President Nursultan Nazarbaev, and Russian President Vladimir Putin (left to right) in Astana on March 20

Russian President Vladimir Putin says it is time to start talks on the formation of a currency union between Russia, Belarus, and Kazakhstan.

Putin made his comments after a meeting on March 20 with Kazakh President Nursultan Nazarbaev and Belarusian President Alyaksandr Lukashenka in the Kazakh capital, Astana.

The leaders met to discuss economic problems facing the three countries, which along with Armenia make up the Eurasian Economic Union.

Putin, who has previously suggested a currency union among former Soviet republics, said the three countries "have agreed to continue coordinating our monetary policy."

He added that "the time has come to speak about the possibility of forming a currency union in the future."

Putin did not specify whether he wants to create a new currency or wants Belarus and Kazakhstan to adopt the Russian ruble.

The ruble and Kazakhstan's tenge have lost value in the past year as low oil proces have weakened the Russian and Kazakh economies.

Nazarbaev said after the talks that the three leaders also discussed reasons for the current economic problems among EEU countries.

He said trade turnover between Russia and Kazakhstan had declined by 20 percent last year, due mostly to lower energy prices.

Putin said GDP among the countries in the region is expected to decline by about 1.4 percent in 2015.

Because of the low growth, Putin said an anticrisis plan of some 2.3 trillion rubles ($38 billion) has been prepared to buffer the economy.

Blaming a global economic slowdown for Russian, Belarusian, and Kazakh economic woes, Nazarbaev said other key reasons are the Ukraine crisis, Western sanctions against Russia, and low oil and gas prices.

The Kazakh leader concluded that 2015 will test "the durability" of the EEU model for the "development of our countries."

Despite the uncertainty of the EEU model, Lukashenka said new members of the union -- Armenia and Kyrgyzstan, which is expected to join by May -- "should follow the classical principles that the three of us have developed."

Lukashenka also complained of trade barriers between EEU members that he said "tend to emerge from time to time."

Russia and Belarus had a trade war last year that began after Moscow banned the sale of many Belarusian foods in Russia.

Lukashenka added that the three countries had to rely more on domestically produced goods by "saturating" their markets with "our own goods."

He called that "issue no. 1."

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