Putin’s Proposed Eurasian Currency against the Euro

Russia has long been considered a polarizing figure in the world of international politics. Whilst being undeniably powerful, Russia has become somewhat hostile to other, more economically powerful nations due to the fact that it was unable to justify its economic position in a rapidly changing world economy, one that was quickly adopting the American dollar as its universal currency. With the arrival of the Euro, it seemed as though Russia was being further ostracized, something that a nation as old and proud as Russia would not take lightly.

In typical Russian fashion, Vladimir Putin created, at the very beginning of 2015, an economic union similar to that of the Eurozone. It is not difficult to see where he’s coming from, as there are many benefits to being part of an economic union. Economic union’s foster easier trade due to the absence of hassle in exchanging money in order to possess legal tender in the country you are looking to do business in. It fosters a sense of unity among countries possessing a similar cultural background and creates an overall sense of economic harmony among countries that frequently do business with each other.

Putin’s proposed economic union is called the Eurasian Economic Union, or the EEU for short, and there seems to be no basis for the creation of this union. The members of this union include Russia, Armenia, Kazakhstan, Belarus and soon Kyrgyzstan will also join the fold. Out of these five nations, only Russia seems to be a nation of any serious import. However, Putin is proposing that the members of this economic union should share a currency, similar to the Eurozone, the Eurasian Currency. There seems to be no economic basis for this as trading between these two countries is not particularly prolific, nor do they possess any significantly shared cultural heritage that would warrant this sort of union.

This seems like more of a political move on Putin’s part. Russia has always been a strong detractor of the Eurozone, possible because it threatens their own economic superiority, as they would not be considered a major economy in the Eurozone. Putin seems to be creating this Eurasian Economic Union as a tool he can use to leverage countries in the Eurozone, a bargaining chip of sorts.

However, despite all of the political sense this move seems to make on the surface, there is very little chance that this move will accomplish anything of any major significance. This is due to the fact that the majority of the countries involved have very little economic influence. The Eurozone on the other hand includes countries such as France, Germany and Spain, economic powerhouses that come together to make the Euro a currency to be reckoned with. This shared currency of the EEU would only increase rate of the steady decline of the Russian ruble in recent years, as Russia would be stuck handling poor economies that would be driving down its own currency value drastically.