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. Last Updated: 07/27/2016

5 Ex-Soviet States in Economic Union

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ASTANA, Kazakhstan — Russia and four other former Soviet states on Tuesday formed a new economic grouping with similar goals to the European Union, although a Russian minister conceded a common currency was not an immediate priority.

The Eurasian Economic Union, signed into being in the new Kazakh capital, Astana, by the presidents of Kazakhstan, Russia, Belarus, Tajikistan and Kyrgyzstan, replaces an existing customs union that was largely moribund.

While the economies of Russia and Kazakhstan — both helped by strong commodity prices, especially oil — are relatively buoyant, the new body unites some of the economically weakest states from the former Soviet Union.

"The customs union that has existed for five and a half years has become a new international organization," Kazakh President Nursultan Nazarbayev told a news conference in Astana’s presidential palace after the signing.

"I believe an extremely important event has taken place."

"This is an evolutionary transformation on the road to a new model, close to the European Union and other international organizations," Nazarbayev’s press service said in a statement.

Asked if the union would have its own currency and federal reserve system, Russian Deputy Prime Minister Viktor Khristenko said it would first concentrate on harmonizing tax and customs laws and other administrative tasks.

"The experience of the European Union shows that settling such questions can take 30 years. … I hope we will be able to do it in a little less time," he told reporters.

Russia, considered the economic powerhouse of the group, has lurched from crisis to crisis in the past, the most recent being in August 1998. Then, with oil prices around a third of current levels, it was forced to devalue its currency.

Kazakhstan, with close trade ties to Russia and with oil also the backbone of its economy, followed months later.

Russia was forced in 1998 to turn to the United States and the EU for food aid to provide necessities such as grain.

The economic picture in the other states is bleak.

Tajikistan is the poorest former Soviet state, with average incomes under $10 a month.

Kyrgyzstan isn’t much richer, and Belarus saw inflation of over 250 percent last year and living standards falling.

Russian President Vladimir Putin hinted that security matters were also behind the new pact.

Speaking to students at Astana’s Eurasia University, he said terrorism, drug and arms smuggling and "aggressive nationalism" were Central Asia’s biggest threats.