Updated at 17:11,20-07-2018

Bahdankevich: It's possible to create single currency, but it's unnecessary


The integration of Belarus, Russia and Kazakhstan within the framework of the establishment of the Eurasian Union will inevitably raise the question of a single currency introduction.

But whether Alyksandr Lukashenka is ready to take this step?

UDF.BY asked the above question to Stanislaw Bahdankevich, former head of the National Bank of Belarus.

"It's possible to create the single currency today, but it's unnecessary, because it leads to a loss of Belarus' political sovereignty," Mr. Bahsankevich said. "The introduction of the single currency is a political move for Belarus. And it should become the result of the economical integration".

"Europe's experience shows that financial systems should be united to a considerable degree in this case. Common approaches to social policy should be worked out, and so on," he said.

According to Mr. Bahdankevich, he is against the establishment of supranational authorities.

"The transition to the single currency in relationships with Russia is a political loss of sovereignty," the expert said. "Look, all exports of Belarus, excluding gasoline, kerosene, potassium salts, are Russia-oriented. Therefore, if we decide to introduce the single currency, we will lose our sovereignty."

However, Mr. Bahdankevich noted that in order to introduce the single currency it was necessary to combine the budgets of the Eurasian Union's countries.

"The sad experience of Greece shows, if a country's budget deficit is equal to two or even three annual GDPs under a single currency, it leads to a destruction of an entire monetary system," he said. "Now the average salary in Belarus is about $400, in Russia - $800. The single currency is not sufficient to equalize living standards in Belarus and Russia. Moreover, Lithuanians, Poles, which are not members of the Customs Union and do not have natural resources, have much higher living standards than in Russia. It is possible to introduce the single currency, but it is unnecessary - otherwise we will lose our sovereignty."