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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

The Economic Phantasmagoria of Integration

10 April, 1999 - 00:00

By Oleh IVANTSOV, The Day
Addressing a press conference on Monday in Kyiv, Verkhovna Rada Speaker
Oleksandr Tkachenko again came out in favor of a single economic space,
a single currency, and a single defense doctrine for the CIS states. How
would the implementation of such geopolitical advantages touted by the
Speaker impact on the pockets of taxpayers? Are these initiatives realistic?
Do they serve the national interests of Ukraine?

Viktor LYSYTSKY, advisor to the Governor of the National Bank of
Ukraine:

"A single defense doctrine is hardly feasible today. The ambitions of
Russia and Ukraine are very different in this respect. For Ukraine, if
it wants to be a European democratic state, there is no sense whatever
to trail in the wake of Russia which claims influence on any point of the
globe. To try to take one's rightful place in the world by clinging to
a single defense doctrine is, to my mind, a throwback to the nineteenth
century or, at best, the first half of the twentieth. As to a single currency,
I would refer to the Constitution, but I am not a law scholar. As an economist,
I can say that a step like this requires not only an equal level of development
but also identical methods of economic management. And the latter are different
in Ukraine, Russia, Belarus and, say, Uzbekistan. What kind of a single
currency can we discuss with the Lukashenka regime? This can only be done
in two ways: either by changing Ukraine's political and economic setup,
or by making other CIS countries line up after Ukraine. Neither is realistic.
The single European currency was preceded by achieving the political, economic,
and ideological convergence of the European countries and by long years
of debates, coordination of positions, etc.In addition, the merger of,
say, the hryvnia and the ruble means that the colossal inflationary potential
of the ruble will place a heavy burden on ordinary Ukrainians.
In spite
of mistakes and complications, we stick to the principle that money is
the result of production; to print more money serves only to aggravate
economic problems. Incidentally, Russia's money base grew by tens of percentage
points at the end of last year. We do not have an inflationary potential
like this. It would be a tragic mistake for Ukraine to float a single currency
together with other CIS countries in the immediate future. This does not
coincide with our national interests. Regarding a single economic space:
if it means lifting as many trade and customs obstacles between the states
as possible, I, as any sound-minded economist, support the idea."

 

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