Bridging of EU and Eurasian Economic Union

Friday, April 15

Discussants
Tore Grønningsæter, European Free Trade Association
Peter Havlik, The Vienna Institute for International Economic Studies and International Institute for Applied Systems Analysis
Vladislav Maslennikov, Ministry of Foreign Affairs of the Russian Federation
Gregor Woschnagg, former EU permanent representative of Austria

Chair
Franz Nauschnigg, Oesterreichische Nationalbank


Summary
On April 15, the Joint Vienna Institute hosted a debate on the prospects of integration between the long-established European Union and the recently founded Eurasian Economic Union (EAEU), currently consisting of five former members of the Soviet Union: Russia, Belarus, Kazakhstan, the Kyrgyz Republic, and Armenia.

The panel of four experts from a variety of institutions represented a range of expertise on international economic integration. The moderator of the panel was Mr. Franz Nauschnigg of the OeNB (Austrian National Bank).

Mr. Vladislav Maslennikov of the Ministry of Foreign Affairs of Russia noted that the recent integration of EAEU members is showing tangible benefits. Recent statistics of the EAEU suggest that trade between the EAEU countries increased after the EAEU was established. In the medium perspective, the EAEU envisages the creation of a common market for medical goods, electric energy, and oil and oil products. He stressed that EAEU members are open to deepen economic ties with partners, including European partners.

Mr. Peter Havlik of the Vienna Institute for International Economic Studies (wiiw) presented findings of some joint research with the International Institute for Applied Systems Analysis (IIASA) on the prospects and challenges involved in the process of integrating the two unions. He noted that a number of neighborhood countries still aspire EU membership despite all the challenges the EU has faced recently. Notwithstanding the potential benefits of a closer integration, the ongoing integration of EAEU has increased the dependence of its members on what happens in the Russian economy. The EAEU integration is being adversely affected both by the crisis in Russia and its unilateral trade restrictions.

Mr. Tore Grønningsæter from the European Free Trade Association (EFTA), explained how EFTA was set up to promote free trade and economic integration for its four member states (Iceland, Liechtenstein, Norway, and Switzerland), reviewed the EFTA experience of integration with the EU. In his view, elements of the cooperation between the three EFTA Stares Iceland, Liechtenstein and Norway and the EU in the European Economic Area (EEA) could serve as a model for strengthening relations between the EU and the EAEU.

Looking forward, Mr. Gregor Woschnagg, former permanent representative of Austria to the European Union, suggested that a number of political and diplomatic issues between the EU and the EAEU will need to be resolved. He identified the challenges related to the modernization of the Russian economy, lower trade barriers, and facilitating cooperation between research institutions as being important for further collaboration between EU countries and those in the EAEU.

The debate that followed brought a number of questions from the audience, particularly in relation to Russia’s recent economic crisis and the effects of sanctions and countersanctions. The audience represented a variety of views on current political and economic developments in the region. There was widespread agreement that the dialogue between the parties should continue and both would benefit economically from closer cooperation.

Asel Isakova, Economist, JVI

Event Photos

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