The two ex-Soviet neighbors first declared their intention to build a Union State with a common economic, customs and political space in 1997. But negotiations have been complicated by a host of issues, which culminated in an energy-pricing row earlier this year.
"We will never be annexed to another country," Alexander Lukashenko said. "We owe absolutely nothing to anyone."
Relations between the two countries hit their lowest point when Belarus tried to impose a transit levy on Russian oil passing across its territory to Europe at the beginning of the year in retaliation for new charges and gas price hikes imposed by Moscow.
Minsk relented after Russia halted crude deliveries, affecting consumers in Europe.
The two countries have long been in talks on introducing Russia's ruble as a single currency in the Union State. But on Thursday, Boris Gryzlov, the speaker of Russia's lower house of parliament, said the lack of a free trade zone and a single emission center made it impossible to introduce a single currency for the Russia-Belarus union.
"Until a free trade zone has been formed and an emission center set up, it is unrealistic to speak of a single currency," Gryzlov, who is also a leader of the pro-Kremlin ruling party United Russia, said.
The speaker also said that Russian and Belarusian energy systems cannot be merged, because the two countries pursue different economic development models. He added that the merger stalled over the lack of progress in unifying tax legislation and the legislative base for securities emission, as well as in forming a single pricing policy.
Russia has traditionally been Belarus' closest ally, whose leadership has become increasingly isolated in the West over clampdowns on civil and political freedoms. Belarus's authoritarian ruler Lukashenko and many other top officials have been banned from entering the United States and the European Union, and the EU has frozen Belarusian government assets.
