Can Armenia Keep a Foot in Both Camps?

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Michael Hindley

About Michael Hindley

Michael Hindley is an adviser on trade relations to the European Economic and Social Committee (EESC), including reports on EU/Central Asia relations. Earlier, he was vice-president of the European Parliament’s Trade Committee and an Organisation for Security and Cooperation in Europe (OSCE) election monitor in Armenia, Azerbaijan, Kazakhstan, Moldova, Russia and Ukraine. He is a frequent lecturer on EU External Relations including at Economics University of Varna Babes Bolyai University in Cluj; Higher Schools of Economics Perm and Moscow, Russia; Academy of Economic Science in Chisinau and Taras Shevchenko University in Kyiv.

Geography and history are political tyrants and nowhere more so than for in Armenia. For all the emphasis, nowadays, on the potential of regional trade, Armenia is boxed into a situation that offers little or no openings. History, distant and none too distant, rules our alliances with Turkey or Azerbaijan and Russia’s brutal show of force in Georgia, in 2008, casts a sombre shadow on Tbilisi’s room for manoeuvre.

The collapse of the Soviet Union raised the profile of its European nemesis, the European Union (EU). The liberated Baltic States found sanctuary and hope in membership of the EU as did Soviet satellites such as Poland and Hungary. Putin has since stabilised Russia, though we may disapprove of his methods, and this has prevented any other former Soviet Union states following the Baltics. The EU’s ham-fisted and naive attempts to draw the whole of the Ukraine into its orbit have proven catastrophic, leaving other aspiring candidates for EU membership apprehensive.

With no contingent border with any EU state, Armenia has observed this still-unravelling drama with a mixture of optimism, pessimism and above all resigned realism.

Looking westwards from Armenia has been useful, practically, but of limited practicability. The countries of Central and Eastern Europe, formerly in the Soviet sphere, have had a rocky road of integration with the EU. The earliest pilgrims, the Czech Republic, Poland and Hungary set the pattern when their political elite used the incentive of membership of the EU to push through domestic economic reforms. The cold shower therapy brought immediate collapses but was mitigated by the promise of the warmer waters of the EU market. Subsequent disillusionment has led to the rise of nationalist populism in Poland and Hungary.

Armenia realised early enough that “membership” was some distant grail and better kept as such, membership — given geography alone — simply wasn’t and isn’t on any immediate agenda. But, and here the Armenian elite have been canny, using the EU’s templates for economic reform have proved extremely useful in reforming parts of the Armenian economy, particularly in areas such as food safety and the potential reform of state aid legislation. This certainly helps Armenia’s export potential to the EU, the country’s largest market.

Armenia’s autocratic governments have no difficulty ramming through reforms with little fear of effective opposition. Going further and deepening relations with the EU, as was once seen as possible and is certainly logical, towards a Free Trade Agreement (FTA) with the EU, would have obvious benefits. However, and it is a very large however, the EU offers no safety net as the pro-EU factions in Ukraine have found to their bitter cost. As an economic model, Russia has little attraction for Armenia, but in a convoluted way Russia does offer security, in the sense of offering not to become a threat.

This is the background to Armenia’s volte-face when it joined the Eurasian Economic Union (EEU) in 2014, under Russian duress. The attractions of the Belarus, Kyrgyz and Kazakh markets are scarcely tempting and certainly not in comparison to the EU. However, offending Russia in order to further a dream, rather than a promise, from the EU simply wasn’t worth the risk.

The question now is can Armenia keep a foot in both camps? Certainly the EU has deep reservations, because membership of the EEU is incompatible with membership of the EU and probably incompatible with any enhanced trading relations with the EU which Armenia had wanted, prior to 2014.

With its unfortunate experience of over-enthusiasm towards Ukraine, the EU has retrenched and decided that, for the time being, a “Comprehensive and Enhanced Partnership Agreement” with Armenia is enough to keep things warming on the back-burner.

The EU is popular in Armenia and the Armenian elite, who benefit from technical and law framing guidance and financial aid from the EU. Armenia also wishes to expand its exports to the world largest single market and needs technical aid to meet EU market regulations.

Both the EU and Armenia realise that “membership” offers can indeed be counter-productive. In Hungary and Poland, the previous reformist governments have got too far ahead of the population and have provoked populist backlashes. On the other hand, for Armenia the EEU is a realistic, though limited, scenario. In the unlikely event of the EEU being economically successful, then Armenia gains; and anyway joining keeps Russia happy.

A revived EU/Armenia Agreement has been initialled at ministerial level, but needs approval. This is no problem in authoritarian Armenia, where the political process has been compliant to the demands of its elite, even when it involves a volte face on the EEU in 2014.

On the EU side, the deal has to be ratified by the Strasbourg Parliament, which can be a tricky matter. Justified concerns will be expressed about human and democratic rights in Armenia and there will be a vocal anti-Putin caucus that is distrustful of the EEU. But for how long Armenia’s tightrope walk of external trade and internal economic reform à la Berlaymont (EU HQ) and external security à la Kremlin lasts, remains to be seen. Certainly luck and good judgement will be needed in great measure.

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The views expressed in this opinion editorial are the author’s own and do not necessarily reflect Emerging Europe’s editorial policy.

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  1. “Our allies Turkey and Azerbaijan”…….. and “Autocratic and authoritarian Armenia”…….. Snowflake politics based on a neocon template is so amusing. In taking the above two Genocidal and Islamist dictatorships into consideration this author’s silly psychobabble can be translated as: ‘let’s avoid the elephant in the room and talk about why the window is slightly crooked’. What’s especially disturbing is that the author was supposedly an “election monitor in Azerbaijan”… lol. So what did you learn when you observed the tin-pot dictator of Azerbaijan get “democratically elected” with 95% votes and next “democratically” appointed his plastic-faced wife as “vice president”… anything? Or is that the twin elephant you’d like to conveniently avoid?

    1. Please read carefully, I didn’t say Azer & Turk were Armenia’s allies, on the contrary I said history rules out Azer and Turk being allies for Armenia. Perhaps in your anger and haste you read what you wanted to see and not what I wrote. Apology isn’t needed but would be appreciated

      Michael Hindley

      1. Michael,

        I think you’re guilty of exactly what you say he is, not reading. He never said that Armenia and the Turkish countries were allies. I believe he was implying “our” in this case was the United States.

        Your statement was “History … rules our alliances with Turkey or Azerbaijan”. The use of “our” in this sentence is a poor choice, because who are you actually talking about? United States? Germany?

        If it’s United States, in fact, this is really incorrect. It’s more like geography more than history. Unless you are talking about the historical antipathy of Russia and the Ottoman Empire.

        In reality, we were on opposite sides in WW I, and the Turkish massacre of Armenians was condemned by the United States. So, no, not history. Pragmatism? Yes. Geography? Yes. The enemy of my enemy is my friend? Yes.

        Referring to Europe in a historical context is more flawed, since it has not acted in unison. So, going back to WW I, you could say Germany was an ally, but before that, Prussia had essentially nothing to do with the Ottomans.

        France and Britain fought against Russia, with the Turks, in the Crimean War, but that was more to oppose expansion of Russian power. Of course, they fought them in WW I, so that would more than invalidate that premise.

        I think you’d be more accurate to say geography than history. They are very important geographically to oppose the Russians and act within the middle-east, although given their current state, they aren’t a particularly good ally. But that may change with a new regime.

  2. Funnily enough, Azerbaijan is also about to sign a SPA with EU….. EU who praised the last elections in Armenia as being within the international standards. No wonder then why EU voice is becoming increasingly inaudible, victim of its own double standards. Sadly, ideologically weak and populist opposition in Armenia not only affect the country’s development but also the way it is perceived outside. Double punishment here for Armenians citizens, who cannot be blamed for they realistic electoral choice given the lack of credible alternative.
    Finally, if EU is able to take proper conclusions the after the Ukrainian fiasco, Armenia may well serve as an example of new partnership frame with Eastern Europe, a bridge integrated within EEU but applying reforms supported by EU, and while EU membership is completely unrealistic (firstly because of the EU itself), a bilateral FTA may well be possible depending again mostly on EU flexibility and will to support Armenia.

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