Minsk slightly freezes Eurasian integration to make Kremlin more cooperative
The Belarusian authorities have failed the Eurasian integration deadlines in order to strengthen their bargaining position with Moscow. Minsk and Moscow have not resolved a wide range of bilateral issues; including the oil and gas dispute. The Belarusian authorities are unlikely to have any principled objections to the interstate integration document and may sign it immediately after Russia makes counter-concessions.
President Lukashenka has approved the draft agreement on the Customs Code of the Eurasian Economic Union as a basis for negotiations.
The Belarusian authorities used the last available argument and slightly froze the Eurasian integration in order to advance their interests in the Kremlin. According to the Belarusian Foreign Ministry, President Lukashenka did not sign the Customs Code, but the decree on the negotiations about the draft Code. On December 26th, 2016, in St. Petersburg, four heads of the EEU states, Armenia, Kazakhstan, Kyrgyzstan and Russia, signed the EEU Customs Code. By not being present at the ceremony of the signing of the Code, President Lukashenka demonstrated his extreme discontent with the increased uncooperativeness of the Kremlin on crucial issues.
Until now, Belarus and Russia have not resolved several substantial issues: the price of gas and repayment of the due debt from 2016; resumption of the oil supply to the Belarusian refineries; waver of the 'visa barriers’ for foreigners at the Russo-Belarusian border. Last week, the parties only agreed on the tariffs for the Russian oil transit through Belarus. That said, under the pressure from Russian negotiators Minsk was prompted to curb its appetite for tariffs significantly.
Minsk regards the EEU as Putin’s integration project, the symbolic importance of which will increase before the 2018 presidential elections in Russia.
Minsk has no serious objections to the content of the EEU Customs Code and is likely to sign it as soon as the Kremlin makes concessions and guarantees to resume oil supplies and reduces price of the Russian gas.
The Labour and the Tax Ministries are considering the possibility to include persons engaged in some economic activity without forming a legal entity in the social security system. When the decree No 337 comes into effect, the number of private entrepreneurs is likely to reduce due to the possibility of reducing the tax burden when switching to a tax payment as an individual. 95% of self-employed, including PE, pay insurance premiums on the basis of the minimum wage. The number of self-employed citizens is expected to increase, the number of insurance contributions to the pension system from PE will decrease, the number of citizens who will pay a fee to finance government spending will decrease by several tens. Self-employed citizens have the alternative not to pay social security fees and save resources for future pensions, which, given the gradual restriction by the state of pension requirements could be a more long-sighted option.