Opinion: An impressive EU aid package to Armenia does not solve Yerevan’s dilemma on Karabakh

The EU has thrown Armenia an economic lifeline, but Yerevan has a stark choice ahead: either to use its economic resources to modernise its military and ensure that the Armenian population left in Karabakh is protected, or to create conditions for the Armenians in Karabakh to gradually settle in Armenia, argues Benyamin Poghosyan in this op-ed for KarabakhSpace.eu.

The EU has always perceived the South Caucasus as a neighbouring area between Europe, the Middle East, and Central Asia. The South Caucasus was never part of the EU's vital interests, but the Europeans were not indifferent to the region's fate. After the collapse of the Soviet Union, the EU signed Partnership and Cooperation Agreements with South Caucasus Republics, and later included the region into the European Neighbourhood policy. The next phase in EU-South Caucasus relations was the launch of the Eastern Partnership initiative and the inclusion of Armenia, Azerbaijan, and Georgia into the program. Georgia signed an Association Agreement with the EU in 2014; Armenia was forced under Russian pressure to abandon its Association Agreement in September 2013, while Azerbaijan was never interested in signing it. However, Armenia succeeded in negotiating and signing a new Comprehensive and Enhanced Partnership Agreement with the EU in November 2017, which fully came into force in March 2021; and Azerbaijan continues negotiations with the EU to sign a strategic partnership agreement. The EU never presented itself as a hard geopolitical player in the region, preferring to act as a normative power and seeking to bring the region's states closer to the EU through approximation of legislation, standards, and procedures.

The 2020 Karabakh war has drastically shaken up the status quo in the region. Russia and partly Turkey have significantly increased their influence in Armenia and Azerbaijan. The Kremlin achieved its long-coveted goal to deploy its boots on the ground in Karabakh, and simultaneously expanded its military presence in Armenia. Turkey fanned pro-Turkish sentiments in Azerbaijan, deployed sixty soldiers in the joint Russia-Turkey ceasefire monitoring centre, and probably thinks about establishing a military base in Azerbaijan. The West was generally passive during the 44 days of the war. The EU made several neutral statements calling for a ceasefire, while the US organised an Armenian-Azerbaijani meeting in Washington with zero results. After the end of the hostilities, many experts argued that Russia and Turkey transformed Karabakh into another Idlib, effectively sidelining other players, and called the Euro-Atlantic community to revitalise its presence in the South Caucasus to balance Ankara and Moscow.

In this context, the EU launched significant activities in the region. During the informal summit of the EU foreign ministers in Lisbon on May 27, it was decided to increase the involvement of the European Union and the Member States in strengthening support for the Eastern Partners. As the first step towards the implementation of this decision, the ministers of foreign affairs of Romania, Bogdan Aurescu, accompanied by the heads of diplomacy of Austria, Alexander Schallenberg, and Lithuania, Gabrielius Landsbergis, were dispatched on a regional tour to the South Caucasus, on 24-26 June 2021, as special envoys of High Representative of the Union for Foreign Affairs and Security Policy, Josep Borrell. 

Borrell himself published a short piece in his blog on 2 July 2021. He argued that South Caucasus was essential for the EU in terms of transport corridors linking the EU with Asia and the diversification of EU energy resources and that the EU should foster the region's role as a connectivity hub. According to Borrell, the EU has a vision to offer to the region, is a trustworthy reform partner, and is ready to help with confidence building and conflict transformation. On the same day, the European Commission and the EU High Representative for Foreign Affairs and Security Policy outlined a proposal on how to prioritise co-operation with Eastern partners in the years to come. The EU elaborated a €2.3 billion Economic and Investment plan in grants, blending, and guarantees, with a potential to mobilise up to €17 billion in public and private investments. The proposal identified five flagship initiatives in all three republics. Initially, the project envisaged up to €1.6 billion in funding for Armenia, €140 million for Azerbaijan, and €1.175 billion for Georgia, including grants, loans, guarantees, and blending.    

The EU Commissioner for Neighbourhood and Enlargement, Olivér Várhelyi, travelled to the South Caucasus from 6 to 9 July and discussed EU relations with the region and the details of the projects. The President of the European Council, Charles Michel, visited South Caucasus on 17-19 July. In Armenia, President Michel confirmed an EU financial support package of €2.6 billion. He outlined four priorities that he believed should be addressed to achieve more stability and security in the region. These include softening the rhetoric, delimiting disputed borders, looking into possible regional co-operation in transport, and moving towards peace negotiations. In Azerbaijan, President Michel reiterated messages about the conditions needed to guarantee stability and security. He also suggested that the EU would be ready to support the delimitation of borders between Armenia and Azerbaijan by providing expertise and monitoring capacities. In Georgia, President Michel participated in the Batumi international conference and had a joint meeting with Georgian, Moldovan, and Ukrainian Presidents in the newly established Association Trio framework.

The recent impressive financial support package of the EU for the South Caucasus indicates that the EU is interested in restoring stability in the region after the 2020 Karabakh war. It means that the EU accepts the new territorial status quo established by the November 10, 2020, trilateral statement and will discourage any attempts to change it through force. The EU's calls to start the border delimitation and demarcation process between Armenia and Azerbaijan without mentioning the necessity to fix the status of Nagorno-Karabakh reflect this thinking. 

The EU seeks to encourage regional economic co-operation and connectivity, hoping that it will decrease future conflicts. The decision to provide the largest assistance package in the South Caucasus to Armenia may be based on the fact that Armenia suffered the most due to the 2020 war and has more incentives to challenge the new status quo. The EU believes that the increase of the living standards of the average Armenian citizen will make the idea of changing the new status quo less popular among Armenians, as they will not wish to jeopardise their newly achieved economic prosperity, thus contributing to the relative stability of the region. Meanwhile, the EU is not in a position to provide hard security along the Armenia-Azerbaijan border, to force Azerbaijani troops to leave areas in the Syunik and Gegharkuniq provinces, or to stop shooting on other border villages, such as Yeraskh in the Ararat province, located only 57 km from Yerevan. Thus, Armenia should be grateful to the EU for this impressive and generous assistance, but Yerevan has to clarify its position on the future of Karabakh. 

Armenia has two stark options: either to allocate a significant part of its resources from future economic growth to modernise its military in order to protect the remaining part of Karabakh after the eventual departure of Russian troops or to create the right conditions for Armenians living in Karabakh to come and settle in Armenia gradually, to avoid a repeat of the post-10 November 2020 situation, when many Armenians were forced to leave their homes abruptly. 


source: Benyamin Poghosyan is the Founder and Chairman of the Center for Political and Economic Strategic Studies in Yerevan.
photo: The president of the European Council, Charles Michel, greets the acting prime minister of Armenia, Nikol Pashinyan, Yerevan, 17 July 2021; Office of the Prime Minister of Armenia
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