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Soviet Reunion: Putin's Answer to the EU Starts January 1 — But It's Already Being Challenged

The Eurasian Economic Union officially comes into being with the start of the new year, but the Russian economic crisis may force Moscow to temper its grand expectations for the alliance.
Photo by Maxim Shipenkov/AP

When Vladimir Putin first announced his vision of a "Eurasian Union" of former Soviet republics in 2011, ahead of his return to the Russian presidency, wary Westerners fretted about the prospect of an Iron Curtain descending again across the continent. The proposed trade bloc was touted as a rival to the European Union (EU) and a means for Moscow to reassert influence in its regional backyard.

On January 1, the so-called Eurasian Economic Union (EEU) officially comes into being. The EEU will unite Russia, Belarus, Kazakhstan, Armenia, and Kyrgyzstan in a common market, with freely flowing capital, goods, and services. As Putin has put it, the EEU marks "a completely new level of cooperation" between post-Soviet states, with a combined population of more than 170 million people, a shared GDP of $2.4 trillion, and 20 percent of the world's gas reserves.


"The Russians did their best with the Eurasian Union, and their best was to copy and paste what the European Union was doing," Balazs Jarabik a scholar at the Carnegie Endowment for Peace, told VICE News.

The EEU is, in form, a near replica of the Brussels-led EU. A supranational Eurasian Commission will oversee a Eurasian Union Court, a Eurasian Development Bank, and a central council of member states, which will coordinate financial systems and economic policies between them.

On December 23, EEU leaders met in Moscow to sign the final dotted lines, and wax lyrical about the union's future economic dealings. On January 1, the May 2014 treaty authorizing the EEU goes into effect. Armenia will officially join a day later, while Kyrgyzstan is set to join in May. Membership talks with Tajikistan are ongoing.

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But just days before its inception, the EEU is already being challenged. With Russia's economy in crisis owing to a precipitous drop in oil prices and the effect of Western sanctions that followed its adventurism in Ukraine, Belarus and Kazakhstan are showing some cageyness, and lightly resisting the confines of Putin's post-Soviet vision.

Jarabik explained that Belarus and Kazakhstan have their own varied reasons for signing on with Moscow. Oil-rich Kazakhstan needs access to Russian transit lines to move its crude. Belarus — described by Condoleezza Rice in 2005 as "Europe's last dictatorship" — covets Russian subsidies, in the form of cheap gas.


Armenia's impending accession to the EEU has some observers especially perturbed. Back in early 2013, Armenia, like Ukraine, looked set to ally with Brussels in what was already looking like an East-versus-West scramble for allegiance in Eastern Europe and Central Asia. But that September, Armenia abandoned years-long negotiations of an EU association agreement in favor of joining a Russian-led "Customs Union" with Belarus and Kazakhstan — an antecedent of the EEU.

'The Cold War should be over for everyone.'

The turn came several years after the EU launched an ambitious "Eastern Partnership" project designed to strengthen ties between it and a handful of ex-Soviet countries. From 2010 to 2013, Brussels spent $3.6 billion on the project — only to have Armenia, Belarus, and Azerbaijan back away, and Ukraine erupt in chaos.

But with the Russian economy on precarious footing — the ruble has fallen 40 percent against the dollar this year — there are signs that Putin will have to temper his aspirations for a grand international alliance led by a greater Moscow. From the start, Putin has pushed for the EEU to be a political and military union as well as an economic one. But Belarus and Kazakhstan appear increasingly hesitant to cede sovereignty to Moscow, and increasingly willing to stand firm against Putin.

This is largely because Putin lost Ukraine after its pro-Russian President Viktor Yanukovych fled the country earlier this year. Ukraine had long been seen as the jewel of any potential Eurasian bloc. Putin's seizure of its Crimean peninsula after the revolution and escalation of the separatist conflict in eastern Ukraine precipitated the pain of its contracting economy and tumbling currency. Belarus and Kazakhstan both boast large ethnic Russian populations, which was Putin's pretext for intervening in eastern Ukraine, and are reportedly wary of similar incursions into their territory.


'Russian Roulette' — VICE News' dispatches from Ukraine. Watch them here.

In recent weeks, Belarusian and Kazakh officials have displayed bravado that might have seemed unimaginable — or at least very ill advised — just months ago. Both have made overtures to Ukraine of late, stopping by Kiev en route to the EEU summit that was held December 23 in Moscow. Kazakh President Nursultan Nazarbayev called the conflict in Ukraine "nonsense," and Belarusian President Alexander Lukashenko reprimanded "the conduct of our eastern brother," referring to Russia.

Belarus recently closed all over-the-counter foreign currency exchanges in an attempt to protect its currency from the Russian ruble's slide. After Moscow banned food imports from the EU in retaliation for economic sanctions, Belarus declined to follow suit, and was even accused of stealthily repackaging European foodstuffs and sneaking them across the border into Russia. Kazakhstan also balked at taking part in the ban.

Yet Russia plows ahead — with some words of caution for its soon-to-be union partners. Anexei Pushkov, the chairman of the foreign affairs committee in Russia's lower house of parliament, coolly observed on Twitter that in earlier times, the former leaders of Yugoslavia, Libya, and Iraq had "tried to become friends with the United States," grimly noting, "Their fate is well known." All are dead.

Nazarbayev first proposed an economic Soviet reunion back in 1994. Eleven years later, Putin famously referred to the Soviet Union's collapse as "the greatest geopolitical catastrophe" of the 20th Century — warning the West that the Soviet states were still bound by "a single historical destiny."


But the concerted push to craft what has become the EEU began only in 2009, after the EU's eastward expansion brought it right up to old Soviet borders — and Putin got nervous. In 2010, he created the Customs Union with Belarus and Kazakhstan, and began laying the ground for what would follow.

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In late 2013, addressing Putin's efforts to block closer ties between Europe and Ukraine, German Chancellor Angela Merkel asserted that "the Cold War should be over for everyone."

How will the EU respond to the long-awaited birth of a prospective rival? Merkel has already indicated a willingness to open trade talks between the EU and the EEU. But a recent article by Jose Ignacio Torreblanca of the European Council on Foreign Relations calls for "strategic patience."

"To open negotiations with Russia on the European Union precisely at this moment" — with tumult in Ukraine, and Crimea still in Russian hands — "could send the wrong message to Moscow," he warns.

In the meantime, squabbling between Russia, Belarus, and Kazakhstan over the trade of European foodstuffs threatens to sour the EEU's grand opening. Moscow has already begun halting imports of Belarusian milk and meat, citing health and safety concerns. This, understandably, has given Lukashenko pause. In July 2013, ahead of escalating tensions within Ukraine, Russia banned all chocolate and candy imports from current Ukrainian President Petro Poroshenko's Roshen company for similar reasons.

Follow Katie Engelhart on Twitter: @katieengelhart