gazeta.ru

March 17, 2000

Why Should Russia Enter the EU?

By Olga Proskurina, staff writer

Elaborating a program for Vladimir Putin on Thursday, the Center for

Strategic Research considered the question of foreign investing with a

great deal of heat on both sides of the issue. At the least there were no

disputes concerning the suggestion that Russia might enter the EU, the

elimination of certain taxes, and the shutdown of State Property and Energy

Ministries.

Both State Property and Energy Ministries were first upbraided, however, by

chairman of the Coordinating Committee Dmitry Vasilyev, former chairman of

the Federal Commission of the Securities Market. He spoke on behalf of the

rights of investors. According to Vasilyev, these two departments had been

stifling reforms and doing little to improve the investing climate. In

their current form, Vasilyev stated, the tax on profit and the tax on

revenue essentially make each employer and all his employees seem tax

criminals. At any given moment, the tax-collecting organizations can accuse

one of hiding revenue, and the accused will need to prove his innocence,

all presumptions about it set to the side. For this reason Vasilyev that

taxes should be on

the whole more circumstantial. Then revenue will flow into the budget, and

private investing into the economy.

To fight bureaucracy, claims the former chairman of the State Securities

Commission, not only must the majority of employees be fired, but the empty

positions they leave behind should themselves be liquidated, and

the freed means should go to raising the salaries of the now smaller number

of employees. This plan would cut corruption as well.

Further, taking to the improvement of the Russian investing climate is

acting director of the Austrian bank Creditanstalt, Sergei Zenkin. The

climate is no good, says Zenkin, because investors have no confidence as to

where the country is headed. In the case of Poland and Ukraine, on the

other hand, investors understand the futures of both countries, because

both clearly state their intentions to enter the European market of

electroenergy and to join NATO, and both clearly demonstrate an advancing

step in their decided directions. Zenkin followed this by saying that

Putin's renowned response to the question of whether Russia will join NATO

-- And why not? -- invariably raised the spirits of many foreigners. The

director of the Creditanstalt believes that Russia should make similarly

clear and loud an announcement of plans to enter the EU, not just in the

way of PR, but as a true and principal decision. Then foreign investors

would certainly begin a

flow of funds into Russia. If Russia does indeed enter the EU (or rather,

if the EU does indeed accept Russia), the country's economy will be

signifantly changed, a subject left diplomatically untouched by

participants of the discussion.

At the last the discussion was brought to its conclusion by the seminar's

director, Yevgeny Yasin. The important thing now, he stated, is to hold the

people who decay the investing climate from outweighing the people who

helps to improve it. From this point of view the seminar is to be viewed

at least as helpful -- if the Russian investing climate has not been

improved, at least it has not been worsened. And still Yasin was unhappy. I

expected something extraordinary, he stated, but there was nothing

extraordinary. I've long had a profound feeling that something can go awry

at any moment, changing the investors' situation. Somewhere there is a

person who surely knows the secret to improving the investing climate. But

it appears that he is not here in this auditorium.