Monetary Union

[Dr_Woland]

This one might be of especial interest to Petri and Inga....

Russia and Belarus have announced that they are going to merge their currencies. The plan is that the Russian Rouble will be adopted in Belarus first (planned by 2005) and then in 2008, a new unified currency will be introduced in both countries.

I don't think I'm the only person to find the second step unlikely to happen? :-)

The Belarus Rouble is currently weaker than the vast majority of world currencies, and given the strong Russian Rouble's position tied to the world oil-price, this is likely to cause some problems ahead....

Dr W.

[Nonson]

If the current economic indicators are any where near to being accurate, then both countries are likely facing a teeth-rattling re-monetization. In fact, the West could be looking at similiar actions within a few short years. At the present time things don't look kosher. Peace

[rodneymackinnon]

Is this possibly the first step in reunification? I don't see why Russia would want to take on Belarus' troubles, but maybe the buffer between the West might be worth it. Any thoughts from those more educated?

[Dr_Woland]

Russia specifically said that this doesn't imply a rush into political union...

However, if it goes ahead, there are some juicy pickings for those in the right place. Under Lukashenka, Belarus has been in a sort of Stalinist timewarp. If they reunite and Russian law applies, there will be a heap of tasty privatisations on offer, and I think this is what's driving it. There is lots of capital in Russia looking for investment, and telecoms, light industry, consumer goods products, and more besides, could all be on the market from Belarus....

Dr W.

[Petri]

Hmm.. I guess that could mean many things.
Are there any other eastern european countries willing to share currencies etc with Russia? I hope Russia don´t steal to much land from the EU... I assume the baltic countries would not want to be with Russia. (?) What about Ukraine?

[Dr_Woland]

Hi Petri

I think that there's no chance that Estonia or Latvia would want ANY kind of connections with Russia - monetary, or any other kind!

Lithuania treads a softer line - they don't have such good connections with Scandinavia, and are reliant on Russian energy supplies and many consumer goods. Even so, I doubt they would want to participate in any kind of monetary union with Russia!

Dr W.