Eurasian Customs Union

[Mher]

Re: Eurasian Customs Union

Agreements with Russia on natural gas to enable Armenia to down inflation to projected rate in 2014

YEREVAN, December 25. /АРКА/. Agreements with Russia on natural gas import and exemption from customs for oil products will have favorable impacts on Armenia’s economy in 2014 and will make it possible to down its inflation to the projected 4% (±1.5%), the Eurasian Development Bank (EDB) said in its CISC Macro Monitoring for December.

According to the document, after reaching its peak of 9.3 percent in August 2013 the inflation triggered by increase in the price for Russia-exported natural gas subsided to 8.2%.

“The central bank, taking into account non-monetary nature of this inflation and the limited impacts of monetary factors and slowdown in the economy, didn’t tighten its monetary policy,” the Eurasian Development Bank said.

EDB analysts say that despite the season price hikes in November 2013, the annual inflation shed to 6.6% prompting the central bank to review its forecast to 6.5-7%.

They also stress that Armenia’s structural payment balance problems need more substantial reforms, and the country’s authorities have complicated short-term and long-term tasks.

In their opinion, amid transport isolation and limited opportunities to use fiscal and monetary policy instruments, the authorities should spur GDP growth, build up exports and develop infrastructures, solving poverty problem along with that.

“Armenia’s decision to join the Customs Union should contribute to solution of these grave problems…,” the document says.

On December 23, Armenian National Assembly ratified the agreement signed between Russian and Armenian governments on duty-free export of natural gas, oil products and rough diamonds by Russia as well as on price for natural gas and delivery of 20% of ArmRosgazprom company’s shares to Russia’s Gazprom.

The Russian gas holding will provide up to 2.5 billion cubic meters of natural gas to Armenia every year over a period between 2014 and 2018.

In the 2013 government budget, inflation in Armenia is projected at 4% (±1.5%) and GDP growth at 6.2%.

The same inflation rate is projected in the 2014 budget, but with 5.2% GDP growth..-0---

18:49 25.12.2013

http://arka.am/en/news/economy/agreements_with_russia_on_natural_gas_to_enable_armenia_to_down_inflation_to_projected_rate_in_2014/#sthash.3izawtzu.dpuf

[Vrej1915]

Re: Eurasian Customs Union

Can someone clear up the issue of gas prices in Armenia

We know that the price of gas is $189/tcm, but in reality its something like $391/tcm due to markups.

I have two questions regarding these markups

1) What do they consist of, and who creates them? Russian export fees, Armenian import fees?
2) Will the real price drop to 189 when Armenia officially becomes a member of the Eurasian Union.

Of course not...
At best, it may remain at its current price.
In fact, since Hayrusgazart is no more Hay, but Gazprom, apart the value added tax that goes to the state budget of the RA (that we took the engagement never change for 30 years or so, anymore), the remaining goes to russian pockets. So the price at the border is less and less relevant by now, it would be better to compare the price at your door.
Let's see, if it may go down....

(Does anybody know, the price at the border in European countries, ant the price at their doors, and the % VAT there, and in Armenia? do they get x2??)

[Mher]

Re: Eurasian Customs Union

Armenia PM explains how natural gas can cost less

December 27, 2013 | 15:43

YEREVAN. – Armenia buys the Russian natural gas for $189 at the Georgian border, but it reaches the consumers for $310; the businesses purchase it at a cheaper price, Prime Minister Tigran Sargsyan said at a press conference on Friday.

But Sargsyan agreed that $310 is quite a high price for gas; this price includes the expenses of the ArmRusGazprom Company, the losses, and the value-added tax (VAT).

“If gas consumption increases, its share will drop, and the price of gas for the consumers may be reduced.

“If new, large-scale investments are made in Armenia, these programs can lead to the growth of gas consumption, reduce the cost share, and bring about a price reduction,” Tigran Sargsyan said.

http://news.am/eng/news/187519.html

[Mher]

Re: Eurasian Customs Union

Ukraine crisis: Leaked phone call embarrasses US

An apparently bugged phone conversation in which a senior US diplomat disparages the EU over the Ukraine crisis has been posted online.

A voice resembling that of Assistant Secretary of State Victoria Nuland refers to the EU using a graphic swear word, in a conversation apparently with the US ambassador to Ukraine.

The US said Ms Nuland had "apologised for these reported comments".

The EU and US are involved in talks to end months of unrest in Ukraine.
Continue reading the main story


Mass anti-government protests erupted in Ukraine in late November after President Viktor Yanukovych refused to sign a far-reaching association and trade agreement with the EU - under heavy pressure from Moscow.

Russia has been widely accused of intervening in Ukraine, using its economic clout to persuade Mr Yanukovych to abandon closer ties with Brussels.

Russia has itself accused Washington and the EU of meddling in Ukraine.
'Not a good idea'

The alleged conversation between Ms Nuland and the US ambassador to Ukraine, Geoffrey Pyatt, appeared on YouTube on Thursday.

The 4min 10sec video was entitled "Maidan's puppets" in Russian - a reference to the square in the Ukrainian capital, Kiev, where pro-EU protests have been held for months. A transcription of the whole conversation was also posted in Russian.

At one point, the female speaker mentions the UN and its possible role in trying to find a solution to the Ukraine stand-off.

She says: "So that would be great, I think, to help glue this thing and have the UN help glue it and you know..." she then uses the graphic swear word about the EU.

The male replies: "We've got to do something to make it stick together, because you can be pretty sure that if it does start to gain altitude the Russians will be working behind the scenes to try to torpedo it."

The two officials also discuss frankly the merits of the three main Ukrainian opposition leaders - Vitaly Klitschko, Arseniy Yatseniuk and Oleh Tyahnybok.

The female speaker says that Mr Klitschko, the former heavyweight boxing world champion, should not be in any new government. "I don't think it's a good idea."

She adds: "I think Yats (Arseniy Yatseniuk) is the guy who's got the economic experience."

US officials refused to confirm or deny the tape's authenticity, but state department spokeswoman Jan Psaki said: "I didn't say it was inauthentic."

Ms Psaki said Ms Nuland had "been in contact with her EU counterparts and of course has apologised for these reported comments".

An EU official told the BBC: "The EU is engaged in helping the people of Ukraine through the current political crisis. We don't comment on alleged leaked telephone conversations."

Ms Psaki also played down the comments about Ukraine's opposition, saying: "It shouldn't be a surprise that at any points there have been discussions about recent events and offers and what is happening on the ground."
Sochi summit

Ms Psaki hinted that the tape could have been leaked by Moscow, pointing out that a senior Russian official was one of the first to draw attention to the audio.

US state department spokeswoman Jen Psaki did not deny the authenticity of the recording

She said: "We think this is a new low in Russian trade-craft. This is something they've been actively promoting, posting on, tweeting about."

White House spokesman Jay Carney added: "I would say that since the video was first noted and tweeted out by the Russian government, I think it says something about Russia's role."

Earlier on Thursday, a senior aide to Russian President Vladimir Putin accused Washington of interfering in Ukraine's domestic affairs.

Sergei Glazyev said the US was spending $20m (£12.3m; 14.8m euros) a week on Ukrainian opposition groups, supplying "rebels" with arms among other things.

And he suggested that Moscow could also intervene.

Mr Yanukovych held talks in Kiev with Ms Nuland on Thursday, at which he said he favoured dialogue and compromise with the opposition.

The Ukrainian leader is to meet President Putin on Friday on the sidelines of the Winter Olympics in Sochi.

Moscow has promised a $15bn (£9.2bn) loan to Ukraine but said it would not be released in full until the formation of a new government in Kiev.

Ukrainian Prime Minister Mykola Azarov and his cabinet resigned last month as President Yanukovych sought to calm street protests.

Also in Kiev, thousands of Ukrainian opposition activists, some carrying shields and baseball bats, marched from their camp on Independence (Maidan) Square to parliament in a show of force.

They came close to government supporters who are camped next to parliament behind barricades manned by hundreds of police, but the march passed off peacefully.

http://www.bbc.co.uk/news/world-europe-26072281

[Mher]

Re: Eurasian Customs Union

"F*ck the EU"

[Haykakan]

Re: Eurasian Customs Union

Good find Mher. Perhaps things like this will show the Yukrainians that going in with the west (USA) means an end to whatever sovereignty they think they have. Everyone wants to paint Putin as the evil one but lets just look at the facts ...This is a great move by the Russian intels and will hopefully produce the desired results.

[Mher]

Re: Eurasian Customs Union

Good find Mher. Perhaps things like this will show the Yukrainians that going in with the west (USA) means an end to whatever sovereignty they think they have. Everyone wants to paint Putin as the evil one but lets just look at the facts ...This is a great move by the Russian intels and will hopefully produce the desired results.

Its interesting how Klitscko, someone I admired as a fighter and more so now as a politician, is looked upon by the people he is fighting to join.

[Mher]

Re: Eurasian Customs Union

The Cost of Customs: Joining the CU predicted to bring higher prices for Armenian consumers

Experts state that after joining the Russia-led Customs Union price hikes in Armenia will be unavoidable because of the new customs clearance rates on imported goods, which will, naturally, affect citizens’ lifestyle.

Armenian government members do not deny that inflation is inevitable, however, promise to do their best to minimize the expected inflation. In particular, Deputy Minister of Economy Garegin Melkonyan told the press on Friday that Armenia is negotiating with the Customs Union (CU) to keep the customs clearance rates unchanged for around 850 commodity titles.

Armenia imports around 11,500 titles of goods. Melkonyan says the CU has higher customs rates for 60 percent of these goods, than in Armenia, while rates are lower for 14.5 percent, and similar for the 17 percent of commodity titles. For the other types of commodities “calculation is done by other methods”.

Chairman of the Employers’ Union of Armenia Gagik Makaryan warns that if the CU rates are applied in Armenia, the prices for imported foods and consumer products will inevitably go up. By his calculations the prices for meat and dairy products, grains, sugar, butter, potatoes, etc, may grow by up to 15 percent.

A similar calculation has recently been presented also by Haykakan Zhamanak local newspaper, based on the analysis of some documents from the economy ministry with the list of products the import of which would be taxed with additional customs duties once Armenia becomes a CU member.

Accordingly, the newspaper analysis claims, beef imported to Armenia will become at least 5 percent more expensive. If until now a 10-percent customs duty was imposed on beef, it will turn 15 percent after joining the CU. Poultry will cost 15 percent more, because the current 10 percent duty will go up to 25 percent. Dairy product prices will hike by 8.3 percent, rice prices by 13 percent, vegetable oil and drugs by 5 percent, soap and household (cleaning) substances will turn 13 percent more expensive, the price of petrol will go up by 5 percent.

Members of Employers’ Union of Armenia are planning to address a letter to the government with their concerns urging the negotiators to achieve concessions in terms of customs rates, however Makaryan is not positive about the outcome.

The expected inflation is topped by another not so bright development, which, by economists’ strong belief, will affect the economy of Armenia – the slow growth of economy in Russia and the ruble depreciation. In January, the ruble value dropped by six percent and has kept dropping, having now hit the lowest threshold against the US dollar it has had over the past four years. Economy minister David Sargsyan says because Russia is Armenia’s major trade and investment partner, obviously, that country’s economic indices will have certain impact on Armenia’s economy.

“It can be the foreign currency rate index, investment activity or any other economic indicator,” says the minister.
Informed and Protected Consumer NGO’s recent survey has revealed that 95 percent of consumers are unhappy with the high prices and poor quality of goods.

NGO leader Babken Pipoyan says he cannot predict how the already-dissatisfied customers would react to the inflation after joining the CU. It is, he says, more of a political issue, rather than related to consumers’ rights.

http://armenianow.com/economy/51705/customs_union_inflation_armenian_consumerism_russian_ruble

[Haykakan]

Re: Eurasian Customs Union

The Cost of Customs: Joining the CU predicted to bring higher prices for Armenian consumers

Experts state that after joining the Russia-led Customs Union price hikes in Armenia will be unavoidable because of the new customs clearance rates on imported goods, which will, naturally, affect citizens’ lifestyle.

Armenian government members do not deny that inflation is inevitable, however, promise to do their best to minimize the expected inflation. In particular, Deputy Minister of Economy Garegin Melkonyan told the press on Friday that Armenia is negotiating with the Customs Union (CU) to keep the customs clearance rates unchanged for around 850 commodity titles.

Armenia imports around 11,500 titles of goods. Melkonyan says the CU has higher customs rates for 60 percent of these goods, than in Armenia, while rates are lower for 14.5 percent, and similar for the 17 percent of commodity titles. For the other types of commodities “calculation is done by other methods”.

Chairman of the Employers’ Union of Armenia Gagik Makaryan warns that if the CU rates are applied in Armenia, the prices for imported foods and consumer products will inevitably go up. By his calculations the prices for meat and dairy products, grains, sugar, butter, potatoes, etc, may grow by up to 15 percent.

A similar calculation has recently been presented also by Haykakan Zhamanak local newspaper, based on the analysis of some documents from the economy ministry with the list of products the import of which would be taxed with additional customs duties once Armenia becomes a CU member.

Accordingly, the newspaper analysis claims, beef imported to Armenia will become at least 5 percent more expensive. If until now a 10-percent customs duty was imposed on beef, it will turn 15 percent after joining the CU. Poultry will cost 15 percent more, because the current 10 percent duty will go up to 25 percent. Dairy product prices will hike by 8.3 percent, rice prices by 13 percent, vegetable oil and drugs by 5 percent, soap and household (cleaning) substances will turn 13 percent more expensive, the price of petrol will go up by 5 percent.

Members of Employers’ Union of Armenia are planning to address a letter to the government with their concerns urging the negotiators to achieve concessions in terms of customs rates, however Makaryan is not positive about the outcome.

The expected inflation is topped by another not so bright development, which, by economists’ strong belief, will affect the economy of Armenia – the slow growth of economy in Russia and the ruble depreciation. In January, the ruble value dropped by six percent and has kept dropping, having now hit the lowest threshold against the US dollar it has had over the past four years. Economy minister David Sargsyan says because Russia is Armenia’s major trade and investment partner, obviously, that country’s economic indices will have certain impact on Armenia’s economy.

“It can be the foreign currency rate index, investment activity or any other economic indicator,” says the minister.
Informed and Protected Consumer NGO’s recent survey has revealed that 95 percent of consumers are unhappy with the high prices and poor quality of goods.

NGO leader Babken Pipoyan says he cannot predict how the already-dissatisfied customers would react to the inflation after joining the CU. It is, he says, more of a political issue, rather than related to consumers’ rights.

http://armenianow.com/economy/51705/..._russian_ruble

I really hate reading articles like these because they are meant to do nothing more than trash things by mentioning only bad things and non of the good things. The conclusions in this article are BS but even if they are not BS and that prices will go up on imports and blahblahblah well guess what this will stimulate local production and reduce imports. Economics in this kind of situation is not all doom and gloom as these articles try misleadingly to have you believe. Local production means more jobs lower unemployment, reduction of poverty..but of course this article mentions non of it just inflation and higher prices. Do not believe these lying bastards people they are just trying to mislead you into making terrible decisions much like the western media is built to do the same.

[Mher]

Re: Eurasian Customs Union

I really hate reading articles like these because they are meant to do nothing more than trash things by mentioning only bad things and non of the good things. The conclusions in this article are BS but even if they are not BS and that prices will go up on imports and blahblahblah well guess what this will stimulate local production and reduce imports. Economics in this kind of situation is not all doom and gloom as these articles try misleadingly to have you believe. Local production means more jobs lower unemployment, reduction of poverty..but of course this article mentions non of it just inflation and higher prices. Do not believe these lying bastards people they are just trying to mislead you into making terrible decisions much like the western media is built to do the same.

No I highly doubt that a significant portion of the non-Eurasian imports that can't compete anymore will be replaced by local products. More likely, they'll be replaced by Russian products, which is the entire purpose of the Eurasian Union: to increase Russian influence and dominance.