The CIS, the EU and Russia: Challenges of Integration

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All three of the Customs Union founding states are in transition where full-fledged democratic mechanisms are not working yet. This raises doubts about the long-term sustainability of the project. No one can give guarantees, of course. Given the specificity the post-Soviet countries that are very sensitive about the transfer of their recently regained sovereignty to the supranational level, one should bear in mind that the deepening and expansion of integration is not a goal in itself.

The goal should be creating an effective mechanism that will allow countries to balance their national interests in the best possible way, while delegating powers to supranational bodies on the basis of multilevel interstate consensus. As for the second factor, which fuels mistrust of long-term integration, there can only be an institutional solution.

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Institutions are called upon to balance up the rights and possibilities of all members of the community and ensure their genuine and tangible equality. Only checks and balances built into the institutional framework can guarantee the feeling of security to the present and potential participants. The main principle of Eurasian economic integration is to bring relevant benefits to all parties regardless of their economic potential, and to provide equal access to the advantages of economic integration for all economic entities within the Common Economic Space.

Using integration experience accumulated in the world over the past decades means creating a system of institutions that could make this process stable over a long period of time. If this system is effective and functional, it can promptly coordinate national interests, produce package agreements between states and prevent emasculation of integration, including by way of restraining overly high rates of development set by supranational institutions.

Eurasian Integration — a Super-continental Opportunity for Russia

European experience is undoubtedly important, but it is necessary to build a framework that is based on the principles of economic integration and takes into account specific regional features, which include not only the nature of political regimes and their ability or readiness to go ahead with integration plans, but also the fact that current and potential members of the community became independent relatively recently, the enormous egoism of regional elites, and the massive external resistance from East and West.

It would be a mistake to limit Eurasian integration to consensus-based inter-governmental cooperation because this would lead the project to a crisis and turn it into a purely formal undertaking should even the slightest changes occur in the political situation. The true mission of the supranational element is to facilitate inter-governmental agreements not only at the level of heads of state but also at the level of ministers, middle- and low-level officials, experts, interest groups, the public, etc.

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  7. Further development of integration will hinge on respect for the interests of the parties involved. Although initiated by the heads of state, the national level now becomes the main brake. As long as interstate institutions remain underdeveloped, national interests will be coordinated on the bilateral level, and this will jeopardize integration. If relations between supranational executive bodies and interstate institutions are balanced out, member states can reach compromise on percent of legislative initiatives.

    This will allow them to avoid bilateral discussions of key issues which become an ever-growing problem. The challenge of a broader integration also manifests itself in the absence of clear procedures for admitting new members and in the lack of clarity about the terms of their participation and future roles. The creation of the Common Economic Space CES means equal opportunities for all businesses operating within it as well as joint representation of regional economic interests in the international arena.

    First , the creation of the Common Economic Space is an important condition for further competition within it, but it does not guarantee higher competitiveness of Customs Union and CES enterprises in the world markets.

    Eurasian Integration — a Super-continental Opportunity for Russia

    On the contrary, with increased domestic competition, the best developed businesses can get onetime advantages but lose motivation for improving competitiveness in the future. Differing economic capabilities of the member states require them not only to create a common space of four freedoms but also to coordinate their policies within the Common Economic Space.

    Second , Eurasian integration needs regular and higher international representation, specifically at the G8 and G20 meetings, where the Eurasian troika is currently represented by Russia alone. The Russian delegation should include officials from Eurasian institutions in order to be able to coordinate efforts and work out a position that is more beneficial for integration by taking into account the opinions of all interested parties and, on the other hand, sounds more significantly at multilateral forums.

    Eurasian Union institutions need to be taken to the world arena more actively, and the head and members of the Eurasian Economic Commission EEC have to be included in all international bodies the work of which can affect the Customs Union. By so doing Russia will be able to make the voice of Belarus and Kazakhstan heard at the most authoritative international level.

    Marek Dabrowski

    The second problem is the balance between the supranational and interstate levels. There is no clear division of functions between the Eurasian Economic Commission and member states when it comes to the pace, vector and content of integration. This does not allow supranational bodies to exercise their functions in full and, on the other hand, creates situations, unacceptable for normal integration, where members of the Customs Union and the Common Economic Space solve their issues on a bilateral basis bypassing the inter-governmental level of Eurasian integration.

    The third problem is insufficient publicity for integration and the lack of understanding in society of how essential and important it is. Current achievements are mainly a result of political decisions made by leaders. People, including entrepreneurs, are barely informed about integration processes. So far this has had little effect on the popularity of integration in the three Customs Union and CES countries.

    And yet, alarming signals are coming from entrepreneurs, and as integration evolves, the so-called democracy deficit when people play no role in the decision-making process will take its toll. As for potential expansion of the Customs Union and eventually of the Common Economic Space , there is no clarity as to whether there should be a onetime package agreement or gradual integration can be possible with partial participation of new countries.

    The creation of the Customs Union and the Common Economic Space calls for large-scale unification and harmonization of national norms with common legislation being drafted at the supranational level. In view of the need to delegate a part of sovereignty to an independent regulatory body, national governments should thoroughly assess the balance between potential benefits and costs. The Customs Union and the Common Economic Space require a homogeneous economic environment that will allow business and people in the three states to benefit from the development of the common market with a high purchasing power.

    This process includes, inter alia, free movement of labor and people; a favorable climate for investment and innovation created by a stable and coordinated economic, financial, monetary and credit policy in the member states; access to government contracts; closer Eurasian financial integration achieved, in part, through free movement of capital; and conditions facilitating cooperation between enterprises, etc.

    Competitiveness can be boosted by correcting laws that distort competition in the common market, including by applying common rules of competition. Transparency in the nationalized industries will also be necessary in order to protect the principles laid out in the integration treaties. Eurasian integration should help harmonize the quality of life in the participating countries. This can be achieved by reducing structural disproportions between the states and by developing cooperation between industries in a way that is consistent with integration goals and principles.

    The principle of equality is an important component.


    Integration benchmarks should be stated as a result of multilateral compromise between member states, with effective use of their supranational and interstate institutions. The institutional system of the Customs Union and the Common Economic Space is based on mutually advantageous functional economic cooperation, not adjustments to certain political tasks.

    Eurasian integration within the Customs Union and the Common Economic Space currently combines elements of national and supranational regulation, which is in line with regional specificity and current objectives. The concept of classic division of power into legislative, executive and judicial branches can be realized only within a national state.

    The functional model of division of power similar to that in the European Union would not be appropriate for Eurasian integration. Disproportional economic differences in the member states limit their possibility of creating an unaffiliated center with at least some functions of an independent actor in issues of furthering integration.

    Issues and Recommendations

    Nevertheless, a key problem lies in the unbalanced interaction between supranational and inter-governmental levels within the current political process. EEC structure and procedures aim to keep the supremacy of supranational regulation, while limiting its independent functions as the driving force of integration. Yet in reality there is no effective system of checks and balances in the form of national constraints at the supranational level.

    The EEC Board, which plays the key role in regulatory monitoring and coordinating expert work when preparing inter-governmental meetings, seeks to wield more influence using available functions. This is not related to progress in integration as such because progress stems from the objective logic of institutional development. For example, artificial acceleration decreed by supranational bodies can produce the opposite effect and cause integration to roll back, which runs counter to the long-term interests of the EEC Board.

    When the interests of member countries are coordinated solely by the Supreme Eurasian Economic Council or by deputy heads of government within the EEC Board, this creates a big risk of funneling inter-governmental interaction through bilateral contacts. This would mean losing the main potential advantage of Eurasian integration, namely multilateral interaction between member states.

    In real life, it is the multilateral coordination of interests, not the supranational format that makes it easier to find compromises. This is why it would be advisable to develop the middle and low levels of multilateral coordination in parallel to the structures of the Eurasian Economic Commission, and involve national officials and experts of all levels more actively.

    Meaning: never. Brussels is right to make it clear that the status quo is unsustainable. But without any follow-up, the announcement risks producing instability in the region. Many factors have brought the Balkans back to the fore — not least the recent refugee crisis , which deeply rattled the region.

    One encouraging, if little noticed, development has been the recent ratification of a friendship treaty between Bulgaria and Macedonia, two countries whose relations had long been fraught, mainly over minority issues. Russia was looking to the Balkans primarily as a transit area for its energy exports to western European markets.

    Today, geopolitical competition is rife. China is set to become the number one foreign investor in Serbia this year. This raises many questions. Should the EU start pushing western Balkan countries to adopt its procurement rules now, or later? And is the EU ready to offer compensation if those states end up losing Chinese investments as a consequence of EU integration?

    The CIS, the EU and Russia: Challenges of Integration The CIS, the EU and Russia: Challenges of Integration
    The CIS, the EU and Russia: Challenges of Integration The CIS, the EU and Russia: Challenges of Integration
    The CIS, the EU and Russia: Challenges of Integration The CIS, the EU and Russia: Challenges of Integration
    The CIS, the EU and Russia: Challenges of Integration The CIS, the EU and Russia: Challenges of Integration
    The CIS, the EU and Russia: Challenges of Integration The CIS, the EU and Russia: Challenges of Integration
    The CIS, the EU and Russia: Challenges of Integration The CIS, the EU and Russia: Challenges of Integration
    The CIS, the EU and Russia: Challenges of Integration The CIS, the EU and Russia: Challenges of Integration
    The CIS, the EU and Russia: Challenges of Integration The CIS, the EU and Russia: Challenges of Integration

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