The Euro as an Instrument for Promoting Russian‐CIS Trade and Economic Growth

Abstract

Exports have been an important factor in Russian economic growth during recent years, but it is clear that growth of the economy cannot continue to depend on expanding exports of oil and other traditional Russian exportables. The role of machinery and other manufactured goods needs to increase. This restructuring of exports could successfully start on markets within the Commonwealth of Independent States (CIS) provided that the existing system of payments inside the CIS is changed. The authors believe that such change could be achieved by introduction for CIS member countries of a multilateral payments system (MPS) similar to the European Payments Union (EPU), which was successfully used in Europe in the 1950s. The clearing currency for the proposed system could be the euro, the new multinational European currency. Adoption of the euro in such a role would support integration of CIS countries, which are not candidates for EU membership, with the European Union. Russia, which has expressed interest in further integration with the EU and in creation of a wider European Economic Area, should have an important role as an agent and middleman in pan-European, factually Eurasian, integration.