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Expect a Recession After Armenia Joins Customs Union: Armenian MP

Armenia's joining the Customs Union cannot not be accompanied by an economic recession, and that will happen in the coming 3 to 7 years, said economist, Armenian National Congress (HAK) faction MP Hrant Bagratyan at a meeting with journalists in Yerevan today. 

According to Bagratyan, creating favorable economic conditions in Armenia is possible if proper policies are adopted in the future, adding, however, that the current ruling authorities do not have the sufficient mental abilities to do that. For example, positive conditions can be created to increase the volume of brandy and wine production; the market will grow for construction companies, and so on. 
The first step that has to be taken, according to the economist, is to hold a referendum — regardless of its possible outcome. Second, Armenia has to ask the other members of the Customs Union for a transition period in order to avoid an economic slump and to ensure advantageous conditions in the future. 

The worst thing in all of this, Bagratyan said, is that on Sept. 3, Armenia agreed to enter the Customs Union by force, losing Europe's trust and prospects of cooperation in the coming 50 years and leaving Russia with the impression that it can control every moment. 

To the possibility of Armenia adopting the Russian Ruble as it's currency, Bagratyan said that it's impossible to imagine the Customs Union without a single currency. As for becoming a part of Russia, the economist believes Russia won't force Armenia to do that, since it doesn't stem from its interests, considering that the standard of living in Armenia is considerably lower. Russia had greater interest initially to get Ukraine, then Armenia into the Customs Union.

As for Armenia's signing an Association Agreement with the EU, Bagratyan believes that at least in the initial stage it would've been advantageous. The price of European goods in Armenia would decrease, as would goods from Turkey, since Armenia and Turkey would be in the same economic zone. Also, it would've been possible to discuss the issue of opening the Armenia-Turkey border. But now, it will be possible to buy cheaper Russian-made Lada Nivas, while the price for European cars will increase.