MOSCOW, December 15 (Sputnik) — Kiev may lose up to $15 billion due to its association with the European Union, should Customs Union member-states take steps to protect their markets, Russian Prime Minister Dmitry Medvedev said Monday.
"Of course, we… will take response measures which will drastically decrease the volume of export of Ukrainian goods to Russia, Belarus and Kazakhstan. In this case, Kiev may lose up to $15 billion," Medvedev said in his opinion piece in the Monday issue of Russia's Nezavisimaya Gazeta newspaper.
According to the Prime Minister, European products will gradually replace its competitors in the Ukrainian market as a result of a free trade zone provision expected to cover 98 percent of goods from Europe. Meanwhile, the second wave of Europe's trade "tsunami" will push these goods to markets in Russia, Belarus and Kazakhstan, exacerbating the business environment in the Customs Union.
Last week, the International Monetary Fund (IMF) estimated that disruptions in exports to Russia and a drop in gross domestic product (GDP) contributed to the $15-billion void in Ukraine's budget. Since April, the IMF along with other international organizations extended two rescue packages to Kiev worth a total $25.2 billion and expected to last until 2016.
Ukraine's association agreement with the European Union envisions deeper economic, political and trade relations between the sides. The document's main part kicked in November 1, while the free trade zone provision is scheduled to take effect January 1, 2016. The full agreement will come into force after it is ratified by the national parliaments of EU member-states.
