Analysis: Behind the EU's promise of €1.5 billion to Armenia in the next five years

As the EU promises 1.5 billion euros in aid to Armenia for the next five years, Alex Petrosyan shows that the projects planned by the EU Commission are not all simply extensions of the bloc's internal policies, but are tailored to the nuances of recent geopolitical change. Read his analysis here on KarabakhSpace.eu.

This last weekend was full of prospective positive messages coming from Brussels. A press release from the European Commission and Josep Borrell, the EU High Representative for Foreign Affairs and Security Policy, on 2 July outlined the main priorities for EU co-operation with its Eastern Partners under a renewed agenda, putting forward a 2.3 billion euro economic and investment plan for the Eastern Partnership (EaP) countries with the potential to mobilise up to 17 billion in public and private investments. This was followed by a blog post by Josep Borell titled 'Why we need more EU engagement in the South Caucasus’. It appeared to accept that the EU’s reluctance to be actively represented and involved in the post-Karabakh war realities of the region will make Brussels a real laggard, thus causing real threats for its geopolitical interests – not only in the region but also beyond. Therefore the EU should try to use the most influential instruments at its disposal – financing and modernisation – to open a space for itself in the South Caucasus. 

Directed towards the enhancement of the EaP through both multilateral and bilateral engagements, the EU promises more than 1.5 billion euros of aid to Armenia for the upcoming five years across five different dimensions. This news which is being actively circulated in the Armenian media not only creates hope in the domestic discourse, but also changes the nihilistic mood in the air that originated as a result of the last war.  The main projects of the EU’s co-operation plan are not only external dimensions of its internal policies – such as the Green Deal, the European Climate Law, and the Circular economy – but take into account the current realities of recent geopolitical changes:

  1. Support 30,000 small and medium-sized businesses for a sustainable, innovative, competitive economy;
  2. Promote socio-economic development and communication by supporting the North-South highway corridor;
  3. Investments in information technology, science and technology;
  4. Strengthen the resilience of the southern regions of Armenia; and
  5. Investing in green Yerevan for energy efficiency and the launch of more environmentally friendly buses.

At least two of those points attract attention as they are a reflection of recent political moves on the South Caucasus chessboard. The EU pledges to support Armenia to accomplish the North-South highway corridor. Current tendencies of world trade make clear that communication routes and infrastructure will shape the geopolitics of the upcoming years. Connectivity infrastructure is becoming increasingly important, especially considering China’s expanding ‘Belt and Road’ initiative. Being located between Asia and Europe and in the crossroads between Russian, Iranian, Turkish, European, Chinese and Indian interests, the South Caucasus needs to decrease its vulnerability and fragility by managing all those passing flows in reasonable and complementary ways. Therefore, the EU's active engagement promises new opportunities for the region given European aspirations to connect with India under the new Connectivity Partnership, and Chinese plans to continue diversifying routes across wider Eurasia. In assisting Armenia in its regional communication build-up, the EU tries not only to secure its position in the region, but also to alleviate Armenia's fragility on Russian asymmetric dependence.

The second most significant aspect of the Armenian aid plan is the support for the Syunik region – the southern province of Armenia. Since the Second Karabakh war, Syunik province has become the Achilles' heel of Armenia. On the one hand, Azerbaijan demands that Armenia provide it with a land corridor through Syunik to its western exclave, Nakhchivan, based on the 10 November ceasefire agreement, otherwise threatening to take this land by force. On the other hand, the Armenian media is full of Russia-backed propaganda promoting the idea of the Syunik separation, which stems from the interests of the Russian-Azerbaijani-Turkish troika. By cutting Armenia from Iran, Russia protects itself from the prospect of having Iranian gas exported to the EU through Armenia and Georgia. Given ongoing rapprochement attempts between Iran and the USA, it seems that the return of Iran into regional affairs may cause serious problems for Russia and Turkey and their designed status quo. In the case of Azerbaijan, Syunik’s sacrifice would mean a weakened Armenia unable to stand up for Nagorno-Karabakh. Therefore, the EU ambassador to Armenia together with other EU member-state ambassadors residing in Armenia visited Syunik amid the border escalation with Azerbaijan in mid-May. Since then, Azerbaijani troops continue to encroach upon Armenian territory along  the borders of its Gegharkunik, Vayots Dzor and Syunik provinces. In the face of a possible 'Donbasisation' of the Syunik province, the EU is pledging financial and political support for the development and resilience of the Armenian South, enhancing its image and role in the Armenian domestic discourse especially in light of the Russia-led CSTO refusal to fulfil its obligations to Armenia in the face of Azerbaijani aggression.

The EU's new activism should be welcomed by the Armenian authorities as they seek to establish well-balanced foreign affairs. The European efforts should be considered as important stimuli to strengthen domestic institutions and to increase the functionality of statehood. Deepening relations with the European partners who openly and courageously stand for territorial integrity of the Republic of Armenia is a must for Pashinyan’s newly elected government. Therefore, the upcoming visit of Olivér Várhelyi to the region and to Armenia on July 8 will focus on further bilateral co-operation, including discussions on the economic and investment plan, the implementation of the EU-Armenia Comprehensive and Enhanced Partnership Agreement, the question of Armenian POWs, and the current situation in the region post-war. Yerevan views the EU as a very important partner, which not only mentors its reform agenda, but also accounts for 22% of Armenia’s total trade. In addition, Armenia continues to have privileges from the EU’s GSP+ system exporting products to the EU with low tariffs. 

The EU's increased involvement in regional processes can be mutually beneficial for the EU and Armenia. Given its proven experience in establishing long-lasting stability, the EU should take a more active approach not only towards the three countries, but towards their conflicts too, which continue to be the main obstacles for regional peace and security.

 

source: This analysis was prepared for KarabakhSpace.eu by Alexander Petrosyan, an independent analyst based in Brussels.
photo: The EU and Armenian flags (archive)
 
The views expressed in opinion pieces and commentaries do not necessarily reflect the position of KarabakhSpace.eu or its partners

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