Vladimir Putin Proposes "Eurasian" Currency Union

While the distraction that is the stock market continues to enthrall most Americans, the big shots in the global monetary which for now are taking place behind the scenes, are getting ever louder. Several recent cases in point:

One person who is paying attention to the failure of the US to grasp that the unipolar world of the 1980s is long gone, is Russia's Vladimir Putin, who earlier today proposed creating a "Eurasian" currency union which would have Belarus and Kazakhstan as its first members, which already are Russia's partners in a political and economic union made up of former Soviet republics.

As Telegraph reports, Putin made his proposal at a meeting with the Belarussian and Kazakh presidents which highlighted the challenges facing the Russian-led Eurasian Economic Union following the fall in global oil prices and the decline of the Russian rouble.

"The time has come to start thinking about forming a currency union," Mr Putin said after the talks in the Kazakh capital Astana with Belarussian President Alexander Lukashenko and Kazakh President Nursultan Nazarbayev.

Not surprising, considering both Belarus and Kazakhstan have spent a lot of time in the past year alternatively devaluing, and scrambling to prop up their currency.

Putin gave no details of the proposal but suggested it would be easier to meet economic challenges by working closely together. Mr Lukashenko and Mr Nazarbayev did not immediately respond to the proposal in public, but analysts say it is unlikely to get off the ground.

Additional information from RT:

“I would suggest moving step by step, exactly as all EU member states enter the eurozone, gradually creating all these common financial institutions,” Likhachev said, adding that if such an order comes from the member leaders, all the sides will immediately start negotiations.

"That means any slightest fluctuation in national currencies of today’s four and of tomorrow’s five [Kyrgyzstan is about to join the EEU – Ed.] EEU countries, that are related neither to trade nor to demand, create a huge trade imbalance,” he said, adding that officials are looking for ways to smooth these problems out, and trade and industry institutions are in a constant dialogue.

"In the same enclosed space, where goods, services, capital and labor are constantly moving, the existence of different currencies exacerbates the risks," Likhachev said. Apart from the economy, there are also political and social issues that are yet to be discussed, he added.

If and when Russia does succeed in launching a regional currency, and recreating a monetary block in the process setting the foundations, the only question we have is after Greece, which European country will come knocking on the Kremlin's door, asking to be let in?

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Tg Ramachandran 7 years ago Member's comment

This development along the proposed formation of BRICS bank will be cause for worry for the MIGHTY DOLLAR in the days to come.

Nathan 7 years ago Member's comment

The future of the world is in the East.

The years of looting by the West are over.

Sarjana Lastname 7 years ago Member's comment

to utopize whole thing to imitate imitation. Make money to people like US dollar at africa, no value, what you can wash whit your laundries, dry up at sun, real dirty money. And when all is gone, it can be printed more and more and more more over years.

John Venediger 7 years ago Member's comment

The only product that i know that is produced in Russia is the AK47. Otherwise they are none contributors to the world economy. There export of natural gas is another, but that is about where it ends.

Jayaraman Raju 7 years ago Member's comment

Putin governance does not cause a flutter in one's heart. Regional currencies are like putting make up on the face to cover the wrinkles etc; it is common knowledge that 'one man's food is another man's poison'; Putin has his own compulsions to suggest this concept; he is no great economist who is worried about the demand and supply curves. he wants to save his own face- and his failures in his country's economy;it is not sufficient that the currency be one, but the standards of living also need to be same in all the member countries; if minimum wages for a skilled worker is Euros 100 per day, it must be same in all the member countries; otherwise, the purchasing power disparity would arise; If I hv to work for 40 hours a week to earn Euros 500 similar job in another member nation must fetch the same earnings; the cost of manufacture, movement of goods across the borders etc have to be opened up and standardized; then only the single currency concept will be useful; otherwise, if Russia has a greater purchasing power than Kazhakh possessing the same currency- then all the resource of Kazhakh will be procured by Russia at the cost of the local of Kazhakh who cannot pay the same, due to the said disparity. the economy of Kazakh would become subservient to Russia, and so will be the destiny of other economies;

Constandinos Pappas 7 years ago Member's comment

"...it is not sufficient that the currency be one, but the standards of living also need to be same in all the member countries..." Well said dear JR! Do you believe this is happening in the EU, or if the EU member states would share your opinion?

Eddie King 7 years ago Member's comment

Putin just want to to put the US dollar out of the market. But he will fail and will always fail. The USA can easily get even or punish Russia thru SWIFT.

David Brinton 7 years ago Member's comment

> Putin just want to to put the US dollar out of the market.

Well, someone who actually gets it.

> But he will fail and will always fail.

If it were only Putin, I'd agree, but he's far from alone.

> The USA can easily get even or punish Russia thru SWIFT.

SWIFT is independent. It's true there have been cases where SWIFT has complied with requests for exclusion, such as with Iran, but those are few and far between. At the height of the Ukrainian crisis the U.S. implied they may request a SWIFT exclusion against Russia.

Putin's response was to remind the West that Russia is a nuclear power and if pushed against a wall will not be so nice. The West buckled and settled for relatively weak sanctions that ended up hurting western businesses more than Russia. Ultimately, Putin won Ukraine, and as soon as the media has something more interesting to focus on, the sanctions will quietly be lifted.

The bigger bugaboo for a lot of nations is that the dollar is the world's reserve currency. On the one hand, that forces adversaries to help prop up the U.S. economy. On the other, it gives the U.S. the ability to dramatically affect other nations economies in either a positive or negative fashion. However, the BRIC nation's drive to end the hegemony of the U.S. dollar is being led by China, not Russia.

Keith Sowden 7 years ago Member's comment

The Euro has been a Mickey-Mouse currency for the simple reason that tying economies which are quite different into one currency simply does not work. So a currency with Putin, the dictators of the former Soviet satellites, a handful of Asian Tigers and Western democratic economies hasn't a chance in hell.

Matt Valenzuela 7 years ago Member's comment

Degar I hope that is true, but the way our government keeps printing money and devalue the American dollar we might be doing business in Eurasian currency.

Peter Devis 8 years ago Member's comment

The days of the Western word are numbered by God, because most of these nations are Israel's descendants. They have completely gone astray from God' 10 Commandments. Peter Devis Wewak, ESP. Papua New Guinea.

Markee Ledge 7 years ago Member's comment

Isreal was founded in 1948 well after United States (1776) and UK (1707).

Jose Reyes1 8 years ago Member's comment

<3 You are right Peter, more or less, but off tangent in some respect.

Dick Kaplan 8 years ago Member's comment

What are you blabbering on about? Don't be ridiculous.