By Tom Warner in Kiev
Financial Times, London, UK, Wednesday, April 21, 2004
KIEV - Russia and Ukraine yesterday committed themselves to greater economic
integration when the two parliaments ratified a treaty creating an economic
union called the United Economic Space.
The agreement, approved amid angry protests from Ukraine's parliamentary
opposition, represents Russia's biggest success to date in drawing the
Soviet Union's former members into a new Russian-led bloc. Belarus and
Kazakhstan are also expected to join.
The union's precise role has yet to be defined, but it is likely to start
with a free-trade zone and could eventually culminate in creating joint
economic policy-making institutions.
Viktor Yanukovich, Ukraine's prime minister, hailed the agreement, which is
expected to play a central role in his campaign for Ukraine's presidential
election this autumn.
Mr Yanukovich, previously governor of the eastern Donetsk region, where ties
to Russia are strong, said the approval showed Ukraine had "got rid of its
inferiority complexes" and was on its way to becoming "strong, influential
and materially secure".
Russia's prior efforts at re-integration, including the Commonwealth of
Independent States and the Russian-Belarusan Union, made little headway,
mainly because Ukraine refused to join any bloc that involved ceding
It remains unclear whether Ukraine will agree to do that in the new union,
also known as YEP by its Russian initials. The text ratified yesterday
described the stages in which the union's members would integrate, which
would not take effect until the details were agreed and ratified by the
The first stage, most wanted by Mr Yanukovich, would be a free trade zone,
likely involving many exceptions. Future stages include a common trade
policy with non-members and common rules for "natural monopolies" such as
gas and oil pipeline operators.
The most controversial stage involves the creation of a common governing
body to which the union's members would cede sovereignty over economic
policy. The treaty says each country would receive a proportion of seats
based on its "economic potential", which detractors say would give Russia a
Mr Yanukovich's chief opponent in the election campaign, Viktor Yushchenko,
is promising to kill the union if he is elected and instead focus on
integration with Nato and the European Union. In yesterday's debate, members
of the Our Ukraine bloc of Mr Yushchenko denounced the union's supporters as
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