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 Eurasian free-trade bloc shaken by Russia's economic straits, - Bloomberg

The plunge in the ruble is deepening divides within the free-trade project promoted by Russian President Vladimir Putin to bind former Soviet republics together. Kazakhstan sent its currency lower last week after businesses complained that Russian companies had flooded domestic markets with cheaper goods. In Belarus, the Eurasian Economic Union’s last founding member, the nation’s trade deficit with Russia widened by a quarter last year.

This is stated by Bloomberg, Censor.NET reports citing ZN.

Putin's vision for his ex-Soviet trading bloc is already curtailed by the war in Ukraine. Oil prices and ruble's plummeting have widened the gap between Russia, Kazakhstan, Belarus and other members of the union.

Read more: Russian ruble plunged to 7-months low, trading 83 per euro

"Because of the creation of a united economic zone, Kazakhstan and Russia, especially metals producers, entered into a trade war," Vladimir Kim, majority shareholder of London-listed KAZ Minerals, says.

The ruble is the past year's worst performer against the dollar, sinking 49 percent and dragging other union's currencies. Belarus's ruble has tumbled more than a third, while the currencies of Armenia and Kyrgyzstan have lost 15 percent and 16 percent respectively. Kazakh producers, having failed to compete with Russian rivals, are cheered by devaluation of the tenge, sent to free floating.

Member countries are also at unease by Russia's leading role. "The trade accusations add to friction inside the bloc. Russia's ban on European food imports, a response to sanctions over Ukraine, has disrupted transit to Kazakhstan and Belarus," the article reads.

According to the media, the tension also belies a March pledge by Russia, Kazakhstan and Belarus to stick together in the face of declining energy prices and sanctions.

Read more: Russia's industrial production contracted by 4.7 per cent last month, - Financial Times

Earlier, Minsk stated that Belarus might quit the Eurasian Union should the agreements be violated. Belarusian president also assured that the EEU partners clearly saw: Belarus has got a more effective system of economic management.

The Eurasian Union was officially launched on Jan. 1, 2015, bringing together several post-Soviet countries. But, according to German Die Zeit, president of Belarus Alexander Lukashenko and his Kazakh counterpart Nursultan Nazarbayev say their nations are not ready to become vassals in Putin's empire.

Neither Kazakhstan nor Belarus supported Russia's sanctions imposed against the West in response to its economic restrictions due to aggression against Ukraine. Besides, the Belarusian leader opposed the annexation of Crimea and even suggested that Russia surrendered most of its territory to Mongolia.
 
 
 
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