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EurAsEC countries will not benefit from adoption of common currency, warns Aleksei Kudrin

 

Member countries of the Eurasian Economic Community (EurAsEC) will not benefit from the adoption of a common currency, Russia’s former Finance Minister Aleksei Kudrin told reporters on the sidelines of an international economic forum in St. Petersburg on Thursday, according to RIA Novosti.

Neither Russia nor countries that may join the currency union will benefit, warned Mr. Kudrin.

Some EurAsEC countries have not even been assigned sovereign ratings, which is a sign of the very poor state of their financial system, said Mr. Kudrin. “Inviting them to join a common zone at the current stage will worsen the quality of the Russian ruble.”

Some of them are in a “permanent crisis” as they are unable to raise funds in foreign markets, borrowing money only from the International Monetary Fund, he said.

Referring to the experience of the European Union, Mr. Kudrin said that all members of the currency union would be required to pursue tight monetary policy. “Russia will have to set principles for these countries,” he said. “It will always be in differences with them because of the need to force them to comply with the tight restrictions,” he said. “Countries that will join the currency union will have to adjust their foreign exchange rates to Russia’s key indicators, not their own.”

In addition, said Mr. Kudrin, Russia continues to strongly depend on revenues from crude oil exports, which will mean additional risks for the members of the currency union. // BelaPAN