Decision No.18 “About the main macroeconomic policy guidelines of the member states of the Eurasian

Research Task 1: Primary Legislative Acts

Document: The Eurasian Economic Commission

Decision #18 On the draft decision of the Supreme Eurasian Economic Council “About the main macroeconomic policy guidelines of the member states of the Eurasian Economic Union for 2017 - 2018 years”

This act states that The Eurasian Economic Commission (next EEC) decided to approve the draft decision of the Supreme Eurasian Economic Council (next SEEC) “About the main macroeconomic policy guidelines of member states of the Eurasian Economic Union for 2017 - 2018 years” and submit it for consideration by the Supreme Eurasian Economic Council. The Decision is aimed to support the harmonization of the fiscal and monetary policies of the member states of the EEU in pursuant to the Decision #7 of the SEEC about the main macroeconomic policy guidelines and consequently the Treaty on the Eurasian Economic Union of May 29, 2014. (The Eurasian Economic Commission. 2017)

Commentary:

Analyzing this decision, it is important to evaluate the document about the main macroeconomic policy guidelines. According to this act, it can be stated that under the pressure of the world economic shocks (oil price fluctuations, continuation of sanctions policy against Russia and declining of prices of exported goods) the economies of the member states of the EEU had a necessity to adapt to the negative exogenous processes of the World Market and their influence. (The Supreme Eurasian Economic Council. 2017) It is obvious that these external shocks have an unfavorable impact on the GDPs’ growth of the member states and GDP of the EEU overall, hence there is a sharp necessity to harmonize the policies of the member states in a favor to increase common welfare. Therefore, the SEEC decided to create the conditions in terms of regulations, which will buffer the economies from the negative impacts. The member states will coordinate their policies according to 6 main directions: improvement of the macroeconomic situation, the formation of conditions that stimulate the business to increase domestic investments into the main capital, the development of processing industries and innovative enterprises that provide added value to the development of non-primary exports, the expansion of the use of national currencies on the territory of the EEU and the transition to an inflation targeting regime.(Ibid) The simplification of the regulations for the business development will give an opportunity to enlarge the business cycle in the EEU, what in its’ turn will positively influence GDP by enlarging the share of domestic investments. Also, the increase of added value will increase the share of taxes, which have a positive impact on government budge, pushing it to surplus. The process of development non-primary exports, will give an opportunity to decline the high dependence of EEU member states from fluctuations of oil prices and prices of other primary goods. Monetary regulations, specifically the policy of targeting inflation will stimulate inside trading within EEU territory and attract the FDI, by ensuring the foreign investors in stability of prices. Cumulatively, such measures will boost and stabilize the whole economy of the EEU.

Following these recommendations as a guideline, the member states will regulate their domestic economic policies by implementing specific economic reforms, and consequently, the harmonization of economic policies in the EEU will help to the member states to enter the deeper integration level, boost the economies of member states and create stable, common economic space. The approval of this act by the EEC will help the economies of the member states to adapt to the prevailing external conditions and the transition to sustainable economic growth due to integration processes of the EEU. Generally, evaluating this act, it can be stated that creation of norms, certain standards and regulations shape the economic policies. Hence, the principles of economic behavior are processes, which are institutionalized with a help of social organization.

Word count 481

Reference list:

The Eurasian Economic Commission. 2017. "The Decision #18 On The Draft Decision Of The Supreme Eurasian Economic Council “About The Main Macroeconomic Policy Guidelines Of The Member States Of The Eurasian Economic Union For 2017 - 2018 Years". Moscow: The Eurasian Economic Commission.

The Supreme Eurasian Economic Council. 2017. "The Decision #7 “About the Main Macroeconomic Policy Guidelines Of Member States Of The Eurasian Economic Union For 2017 - 2018 Years". Moscow: The Eurasian Economic Commission.