Putin forms trade bloc with former Soviet states

Russian President Vladimir Putin signed a treaty with his counterparts from Kazakhstan and Belarus creating a trading bloc of more than 170 million people to challenge the US and the European Union.

The formal creation of the Eurasian Economic Union in the Kazakh capital Astana marks the culmination of more than two decades of talks between former Soviet republics. Kyrgyzstan and Armenia are seeking to join the union by the end of the year, the countries' leaders said at the signing ceremony.

Putin, facing sanctions from the US and EU for his annexation of Crimea from Ukraine, said Russia, Kazakhstan and Belarus will "gradually align" their currencies and monetary policies to facilitate trade and minimalise risks. Putin has pushed for Ukrainian membership in the union.

"The Eurasian Union is a realisation of Putin's geopolitical dream," said Nikolay Petrov, a scholar at the Carnegie Moscow Centre research group. "The Eurasian Union is a demonstration that Russia is not alone."

Putin sees it as a crucial part of his bid to make Russia a great power again, if not to restore the superpower status lost when the Soviet Union fell apart in 1991.

"It's hardly worth talking about recreating the Soviet Union, as many things have changed in 20 years, but the policy of collecting lands that Russia is now pursuing is obvious," said Dosym Satpayev, a political analyst in Kazakhstan. He said Russia's political elite was on a mission to strengthen the country by forging Moscow-led alliances in the "post-Soviet space".