Putin Assembles Eurasian Economic Union to Counter Western Sanctions

Russian President Vladimir Putin chairs a Security Council meeting via a video link at the Novo-Ogaryovo state residence outside Moscow, on May 20, 2022. (Mikhail Metzel/Sputnik/AFP via Getty Images)

The Eurasian Economic Union (EAEU) heads of state planned to meet on Friday after holding a forum on Thursday, a move considered an attempt by Russian President Vladimir Putin to rally support in the wake of Western sanctions stemming from its invasion of Ukraine.

The Moscow-led bloc—which includes Armenia, Belarus, Kazakhstan, and Kyrgyzstan—is expected to discuss their “economic cooperation with external partners” during the summit, which Kyrgyzstan will host.

Mikhail Myasnikovich, Chairman of the Board of the Eurasian Economic Commission, said last week that the leaders planned to meet in person in Kyrgyzstan, but they later opted to meet by video conference, Belarusian news agency Belta reported.

“We were preparing for this to be held in person, but just the other day it was decided that the heads of state would attend the forum and the council meeting via video conference,” Myasnikovich said, without going into detail.

The first Eurasian Economic Forum was held in the capital city of Kyrgyzstan, Bishkek, on Thursday, with Kazakhstan President Kassym-Jomart Tokayev being the only leader from the group that attended the forum in person.

Speaking at the plenary session of the forum via video link, Putin said that “nobody will be able to isolate such a country as Russia” and that countries attempting to do so “would harm themselves the most.”

“No matter how sustainable the economies of the countries pursuing this shortsighted policy are, the current state of the global economy shows that our position is right and justified, even in terms of macroeconomic indicators,” he said.

Putin cited the growing economic issues in advanced economic nations, including inflation, rising unemployment, the breaking of logistics chains, and “global crises in such sensitive areas as food.”

“I do not doubt for a second that there are many countries that want to and will pursue an independent policy and their number is growing. No world policeman will be able to stop this global process,” he said. “There will not be enough power for this and the desire to do so will evaporate due to a host of domestic problems in those countries.”

Russia has been subjected to a barrage of Western sanctions since its invasion of Ukraine in February, including being blocked from the international financial messaging system SWIFT. Moscow retaliated by imposing export bans on its products.

Washington also ended a key sanctions exemption on Wednesday, which would push Russia to default on its debts. This means that U.S. individuals and entities will no longer be able to receive bond payments from Russia without breaching government sanctions.

“If the bondholders don’t get their money when the money is due, factoring in any grace periods that apply, Russia will be in default on a sovereign debt,” Jay Auslander, a partner at law firm Wilk Auslander, said to Reuters. “With the waiver gone, there seems to be no way for bondholders to get paid.”

Though the exemption-lapse only applies to American citizens, it is expected to make things tougher for Russia as it seeks to pay other debt holders, owing to the critical role U.S. financial institutions play in the global financial system.

Naveen Athrappully contributed to this report.