The Kremlin on Friday denied reports that Vladimir Putin will become head of the Russia-Belarus Union after he steps down as Russian president next March.

Radio station Ekho Moskvy cited sources in the Belarusian presidential administration that Putin would be the head of the union state, and Belarusian President Alexander Lukashenko parliamentary speaker.

"This comes from the realm of speculative fantasies," a Kremlin official said. "Such reports can only provoke surprise."

Putin's term as Russian president is set to end in three months, and he has repeatedly said he will not run for a third consecutive term in violation of the Constitution. But Putin has pledged to retain influence in Russia politics. Various theories have been circulated in domestic and international media as to what position he could opt for after the presidential polls in March 2008.

The popular radio station also said Putin would visit Belarus on December 13-14 to sign an agreement proclaiming the emergence of the union state, with common laws, currency, government, state symbols and armed forces.

The ex-Soviet neighbors have been in talks since 1997 over building the union state, but the negotiations have been complicated by a host of issues, including energy and financial disputes.

Russia's parliamentary speaker and leader of the ruling party United Russia, which won a landslide victory in Sunday's polls, earlier said Russia and Belarus could sign the agreement after the parliamentary elections in Russia, held on December 2.

"The union state must be established. This is what our nations want," Boris Gryzlov said.

The union's Parliamentary Assembly adopted a joint 2008 budget in November totaling about 5 billion Russian rubles (about $200 million). In 1999, the budget was 500 million rubles.

Experts have noted lack coordination and inefficiency of the union's executive bodies and a poor performance of joint programs.

RIA Novosti


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