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Armenia's Accession To EEU Like Going To Siberia With No Shirt On -

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  • Armenia's Accession To EEU Like Going To Siberia With No Shirt On -

    ARMENIA'S ACCESSION TO EEU LIKE GOING TO SIBERIA WITH NO SHIRT ON - BAGRAT ASATRYAN

    22:20 * 03.11.14

    The problems of Armenia's accession to the Eurasian Economic Union
    (EEU) were discussed in their political or technical and normative
    respects. However, quite a number of problems have not so far been
    discussed, ex-chairman of the Central Bank of Armenia Bagrat Asatryan
    told Tert.am.

    He sticks to his opinion that Armenia's accession to the EEU is not
    highly promising.

    "Quite a number of problems have not so far been discussed. I mean
    our countries' economic policy and individual measures. We are joining
    the Customs Union. But we are integrating into an environment which is
    like Siberian winter for a person who does not even have a shirt on,"
    Mr Asatryan said.

    "We are integrating into a different economic environment, with higher
    customs rates and lower statutory prices. But what about the economic
    policy, monetary policy and different levels of economic relations
    in the EEU member-states?"

    Armenia is a member of the World Trade Organization (WTO), while
    Russia is going to join it.

    "The trade regime in Armenia is different from that of Russia in terms
    of quality. But we are speaking of the economic policy principles. We
    have reached a rather high level of liberalization as compared to
    Russia," Mr Asatryan said.

    With respect to monetary policy, he said that Armenia has for a long
    period implemented a target pricing policy, with specific solutions.

    Russia is only now switching over to this policy.

    "Given the different currency policies in Armenia and Russia, can
    Armenian producers work in Russian market?"

    In Russia, the government has a serious share in all the large
    companies, which is not the case in Armenia.

    "To say nothing of budget formulation there - oil and so on. In
    Armenia, however, economic entities are operating in a free zone,
    without being backed."

    As regards possible problems for Armenia's banking system, Mr
    Asatryan said:

    "On the one hand, Russia's government-backed financial sector, when
    funds are invested in the banks, and, on the other hand, Armenian banks
    that have no means. It is clear that there can be no competition."

    With respect to the currency policy in Armenia and Russia, Mr Asatryan
    said that, in contrast to Russia, a floating exchange rate system is in
    effect in Armenia. And when the Central Bank intervened in 2008-2009,
    Armenia faced unfavorable consequences.

    Armenia's Prime Minister Hovik Abrahamyan stated that the sanctions
    against Russia will affect Armenia's economy, and the budgeted 4%
    economic growth may not be ensured.

    "Should we elaborate a program for Armenia's economy to be more or
    less protected? No risks are expected if we compare with the mid-term
    program, which envisages lower economic growth for 2015. It was the
    government's program, but the government is repudiating it now. Will
    ever be any political consequences? What other risks are there? It
    is clear that the budgeted 4.1% economic growth is unrealistic.

    "A few words about the budget. The budgeted revenues are lower than
    envisaged by the mid-term program. How low can economic growth be? Are
    we not approaching the situation similar to that in 2009, when the
    premier himself stated the situation would be bad, but they approved
    a budget, after which they put everything down to the crisis. I can
    say that risks are rather high, and an economic decline - or more or
    less tangible growth - should be expected next year and later. And
    it is at least 7% growth that is tangible in Armenia's case.

    "Who is supposed to speak of that except for the government? I place
    no hopes on the Parliament represented by the ruling party. They are
    people concerned over their personal profit. And an absurd situation
    may develop, when with a 15% economic decline no businessman will
    suffer losses. How many big businessmen went bankrupt in 2009? But 15%
    of the population did."

    Armenian News - Tert.am

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