The Eurasian Economic Union is an ambitious project at a difficult time.

After decades of preparation, the Eurasian Economic Union (EEU) was finally established in January – an ambitious project at a difficult time. The union, combining Russia, Kazakhstan, Belarus and Armenia, as well as the acceding Kyrgyzstan, is the third stage of economic integration in the region, after the creation of a customs union and subsequent common economic space. But does such fully fledged Eurasian co-operation come at the right time?

The union’s largest economy by far is Russia, which is suffering a significant recession. According to the EEU, the gross domestic product (GDP) in the union as of 2014 was $2200bn; Russia’s economy alone accounted for $1857bn, according to data from the International Monetary Fund. Russia’s GDP is expected to shrink by 4.5% in 2015 and by close to 2% in 2016, according to the European Bank for Reconstruction and Development, and its currency and economy are strongly dependent on oil revenues.

Member countries without large reserves, such as Armenia, are still impacted indirectly by oil price moves. The country signed its accession treaty in October 2014, more than four months after the initial EEU treaty was agreed. Armenia had the opportunity to turn the other way, as did its neighbours Georgia, Ukraine and Moldova when they signed an association agreement with the EU in June, but decided otherwise.

Experts say Armenia’s decision was not only due to its strong economic links with Russia – countries such as Ukraine and EU member state Lithuania have those too – but also related to Russia’s security guarantee. All EEU member states participate in the Collective Security Treaty Organisation, an intergovernmental mutual defence alliance led by Russia, first established in 1992.

Yet, the union also brings an integrated single market of 176 million people, introducing free movement of goods, capital, services and people. It provides for common transport, agriculture and energy policies, aimed at boosting prosperity in the region, while Russia aims to expand the union and allow for greater integration.

The union already operates through supranational and intergovernmental institutions, with national governments represented by the Eurasian Commission’s Council. There is even talk of a single currency by 2025 – all of which is reminiscent of a similar institution in western Europe, currently facing structural difficulties. Only time will tell if Russia will (want to) learn from the EU’s mistakes.

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