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Referendum on Russia-Belarus Union State possible this fall

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Pavel Borodin, the state secretary of the Russian-Belarus union, said that he hoped the Union's Supreme Council would meet in July or August to set the dates for the referendum and for parliamentary elections.
MOSCOW, June 29 (RIA Novosti) - A referendum on a constitutional act of a Russia-Belarus Union State may be held as early as this fall, a Russian official overseeing the project said Thursday.

The constitutional act will be a transitional constitution for the Union State, which the two countries have been mulling since they signed an agreement on April 2, 1997. The project should establish common economic, customs and political regulations, but negotiations have stalled recently over a number of issues, including a Russian proposal to raise gas prices for Belarus.

Pavel Borodin, the state secretary of the Russian-Belarus union, said that he hoped the Union's Supreme Council would meet in July or August to set the dates for the referendum and for parliamentary elections.

"In practice, we can hold the referendum this fall and elections to the future parliament either this fall or next spring," Borodin said.

The Union State has a common budget totaling about $2.6 billion. Belarus, whose population of 10 million equals only 7% of Russia's, contributes one third and Russia the remainder to the joint budget.

The two countries have also adopted measures including a common visa space and a joint customs committee.

Borodin said earlier this month that the common currency - the Russian ruble - would be put into circulation before the end of 2006.

But negotiations on the ruble have been advancing slowly, and Belarusian leader Alexander Lukashenko said earlier this month that the common currency issue had to be spelled out in the referendum.

The Russia-Belarus Council of Ministers convened Wednesday in Moscow to discuss further progress in integration. Borodin said the customs union had been on the agenda.

"We have built a customs center and set up customs checkpoints but we still have about 1,500 differences in customs rates," he said, adding that ministers had agreed to prepare a financial program for customs points and continue working to harmonize customs legislations.

Borodin also said that the Council of Ministers had considered the gas issue and a proposal by Russian state-controlled energy giant Gazprom to increase gas prices for Belarus. He said the parties had managed to ease tensions on some of the relating issues.

Gazprom, which is reportedly seeking control over Belarus's pipeline system leading to Europe - its main customer, has said it would nearly quadruple gas prices for Belarus in 2007 unless it agreed to set up a joint gas venture. Belarusian authorities, however, have said the price hikes contradict the Union State agreement, which they said stipulated that gas prices for Belarus should equal Russia's domestic prices.

The two countries agreed Wednesday that a special working group would draft proposals on gas prices and submit them soon.

Borodin also said Thursday that the Union State had 30 production programs involving more than 5 million people. He said the programs covered such areas as diesel and agricultural machine-building, and high-tech and computer technologies, but added that the projects had encountered financing problems.

"Unfortunately, we have changed the form of crediting these programs," he said, adding that instead of direct government subsidies for agriculture and machine-building, these programs received indirect funding in subsidies for interest rates.

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