Ogai A.M, Azilkanova S.A.

Eurasian National University named  after L.N. Gumilyov

The Republic of Kazakhstan

 

TO THE QUASTEION  ABOUT THE PERSPECTIVES OF MONETARY UNION WITHIN THE EEU

 

         Monetary Union within the Eurasian Economic Union (EEU) - the theme has long been discussed by many experts, analysts and economists. This issue was raised for discussion as early as 2014, as monetary integration is one of the most important steps of economic unification of post-Soviet countries. Opinions of speakers vary - from the positive "for" to the categorical "against". Comparing these arguments, we can identify the following trend of opinion.

Table 1 - The arguments about necessity of creation  a  monetary union of  EEU

Arguments "for"

Arguments "against"

The single currency will be in demand in the countries of the alliance, thereby reducing the use of local currencies and the US dollar in trade settlements

Not all the conditions occurred yet that are necessary for Monetary Union

Improving financial immunity of Members EEU, to offset the negative effect of external influences

Nor is there enough of commodity flows, flows of services, capital investment

Formation of uniform conditions for the organization of the payment and settlement operations, the organization of exchange controls, regulation and  increase the share of mutual trade

The necessity for co-ordination of monetary policy. Long period of adjustment needs for this

 

The decrease in foreign exchange losses based on exchange

Currency dependence of countries of the EEU from  the Russian ruble

 

Different financial systems, including banking. The need for deeper integration of the banking system

 

Fears associated with the loss of the sovereignty of the country, in particular, the loss of control over monetary policy of the Republic

 

         From Table 1 it is clear that the arguments of the monetary union within the EEU  "against"  until more than "for", and each of them has the right to life.

         As it's known, question of the introduction of the single currency is not new. At one time (up to 1999) European Union (EU) has also discussed this problem (Table 2).

Table 2 - The arguments about the need for monetary union in the EU

Arguments "for"

 

Arguments "against"

More opportunities of investment and financing than previous fragmented currency markets

 

Due to the growth of the financial market, banks may lose some of their traditional lending business medium and large companies, as the latter can borrow directly from the money market

Reducing transaction costs, lowering inflation, low interest rates

 

Deterioration of unemployment due to the introduction of restrictive, tight monetary and fiscal policies. Fears that in a monetary union limited possibilities of state regulation of the national economy

The disappearance of exchange rate risks in operations within the Union. More transparent markets, reducing administrative costs

Loss as a policy instrument control exchange rates. Government deprived of the possibility of effective change in national investment and production changes in the external environment.

Favorable conditions for the development of competition, increasing specialization

More vulnerable to the various economic shocks and recessions not only individual sectors and countries, but also the economy of the entire region

Reducing the cross-country differentiation in prices of consumer goods and services, expanding the range of products and options

 

Due to increased competition manufacturers improve the quality of goods and services

 

        

         The data in Table 2 show the opposite trend in the generalization of the arguments – exactly, in favor of monetary union in the EU. From the experience of the European Union implies that, overcoming controversies, Member States currently have some positive results. Indeed, as time has shown, this economic and monetary union was not only the logical culmination of general economic integration processes, but also the European economy is turned to a new level. This led to a decrease in cross-country risks, deepening European financial market and intensification of reciprocal trade and investment.

         At the same time-meaningful is the fact that the introduction of a single currency system and the euro was not unambiguous and easy. There were certain costs of this transformation and the threats posed by the new economic conditions. Evaluating the role of the euro as a whole, we can say that currently impact the euro on the international monetary and financial system was smaller, while its impact on the internal European financial market - more than predicted by experts. However, we should not forget that the European Union was in the process quite a long time.

         In the process of integration rates have difficulty in monetary policy, as emerging issues in making a compromising solution. In this kind of associations is always a leading countries (Germany - the EU, Russia - in the EAU), whose opinion often prevails over the opinions of other countries participating. In addition, central banks in different countries in different ways use the tools of monetary policy, which proves in recent time the experience of implementing the monetary policy of the National Bank of Kazakhstan and the Central Bank of the Russian Federation.

         So the monetary union will come into effect if in the near future within the EEU, whether in the long term introduced the single currency? This question yet has no clear answer, because the creation of a single monetary union and the introduction of a single currency system is not easy and very long procedure. This is confirmed by the opinions of experts at different levels.

         Thus, to talk about the prospects for resolution of the issue prematurely. The process of preparation requires taking into account all the parameters of the monetary, credit and fiscal policies of member countries. Concerns arise in connection with different structures of the economies of the whole having predominantly raw orientation. However, the experience of other member countries integrations shows that this issue will be periodically rise to the levels of government, taking into account the realities of the world's economic life.

 

 

 

 

Literature:

 

1.                 http://tengrinews.kz/kazakhstan_news/edinaya-valyuta-v-eaes-ne-imeet-perspektiv-npp-272615/

2.                 http://lsm.kz/pochemu-kazahstanu-nevygodno-vvodit-edinuyu-valyutu-v-eaes.html

3.                 http://politikus.ru/v-rossii/46833-igor-shuvalov-nelzya-sovershit-oshibki-v-sozdanii-valyutnogo-soyuza-v-ramkah-eaes.html

4.                 http://studopedia.ru/view_ekonomika-es.php?id=17

5.                 http://lsm.kz/edinaya-valyuta-eaes-privedet-k-potere-ekonomicheskoj-nezavisimosti-kazahstana.html

6.                 http://lsm.kz/pri-edinoj-valyute-kazahstan-navsegda-ostanetsya-syrevoj-stranoj.html

7.                  http://ria.ru/economy