"The issue of monetary integration still persists and is fully substantiated but practically it is already impossible to introduce the Russian ruble on the territory of Belarus from 2005," he said.
According to Mr. Siluanov, it is necessary to agree upon and implement intra-state procedures and initial agreements to introduce the Russian ruble from 2005.
"We presumed that the Belarussian ruble would be tightly pegged to the Russian currency during six months. Apart from that, other organizational measures are required, for example, for the importation of the currency into the territory of Belarus. On the whole, we expected these measures to take from 8 to 12 months," the department director of the Russian Finance Ministry said.
At the same time, he noted that in any case decisions would have to be taken by the leaders of both states.
"But technically, it is problematic to introduce the ruble from 2005 and I fear that with each month we are increasingly losing our chances," Siluanov stressed.
Speaking about the problems existing between the two states as regards the introduction of the Russian ruble, Anton Siluanov noted that the most difficult issue in the negotiation process was the demand by the Belarussian side to be paid compensation for the losses of the Belarussian budget in the event of a reduced tax burden on the country's budget. "Today the negotiation process has not reached any results," he said.
According to Mr. Siluanov, today the general level of tax payments to the Russian budget amounts to 33.5% while the respective figure for the Belarussian budget is about 43%. In the event of the introduction of the Russian ruble, the Belarussian side will have to reduce this difference in the tax burden on its budget to make Belarussian goods competitive.
In this connection, the Belarussian side proposes that Russia should compensate it 7% of the gross domestic product or $1.2 billion and pay this amount annually until the Belarussian economy is adapted to new economic realities. These new demands "were a serious stumbling block for us at the negotiation process," Anton Siluanov noted.
