The basic idea of the work of Group 21 is that the Customs Union of Russia, Belarus and Kazakhstan should gradually become some sort of “Eurasian economic area” – and over the “longer term” become part of an eventual Eurasian economic and free trade area stretching from the Atlantic to Pacific Ocean. That is, it would eventually include the EU. There are several shorter-term goals, including some sort grouping mainly involving “CIS” countries which allows for macro-economic (including monetary policy) coordination, and regional reserve currency status for the Russian ruble. A series of steps are set out to achieve both shorter term and longer term goals.

Jeff says that ….

(I have tried several times to find something interesting in the work of this Group — but with little success! Much of it is very problematic, bureaucratic and long term — and Russia has many other much more urgent economic reform issues. Nevertheless, I will make a couple of observations. One is that I perhaps only realized the possible attractiveness of the Russian ruble as a reserve currency when I was in Uzbekistan about a year ago. Having identified a “shop” where I could use $US to unofficially buy the local currency (the “som”), I walked in and pulled out my wallet. There happened to be several thousand rubles in it and the people in the shop were just as interested in getting my rubles as they were in getting the dollars. But, what made the ruble desirable was belief in its value, and not some agreement between countries. Vladimir Putin recently accused the US of acting as a “hooligan” in “abusing its monopoly” on printing money. “They turn on the printing press and scatter money around the world. We can hardly allow ourselves to solve problems by running a deficit.” But, once again the real issue is credibility – and if Russia can get such credibility then it can do the same. Finally, Putin apparently has suggested that the countries initially involved in the union/integration efforts set up a “ratings agency”. Sure, go ahead and try! But it will only work if it has credibility – and this is unlikely to be the case with a government based agency.)