The Eurasian Economic Union as a Geopolitical and Economic Counterweight to the European Union: the Case of Armenia

The Eurasian Economic Union (EEU) will start to function from 2015 onwards and it is the next step in Eurasian economic integration. It will function as a common market with a customs union and has the aim of providing the free movement of goods, services, capital and workforce and conducting common policies in key economic sectors, such as energy and agriculture. The EEU was established in May 2014 between Belarus, Kazakhstan, and Russia and the treaty to enlarge the EEU by including Armenia was signed in October and just recently ratified by the Armenian parliament as well as the Russian parliament. The signing and ratification of the treaty happened at the cost of the Association Agreement that Armenia was planning to sign within the Eastern Partnership program of the European Union, which would establish a free trade area between the EU and Armenia. What are the main reasons for Armenia to join the Eurasian Economic Union instead of choosing the path of closer cooperation with the European Union?

Armenia has been working toward closer economic and political relations with the European Union since the signing of the EU-Armenia Partnership and Cooperation Agreement in 1999. Negotiations on the EU-Armenia Association Agreement, including a Deep and Comprehensive Free Trade Area (DCFTA), were finalized in July 2013. But in September 2013 after a meeting in Moscow with President Putin, the Armenian President Sargsyan, announced that Armenia was not signing the Association Agreement with the EU but instead would join the EEU from the beginning of 2015.

The reason that Armenia gives priority to membership of the EEU is its complicated geopolitical situation and its need for (energy) security. Armenia faces major (energy) security issues that are caused by the deteriorating relations with its two neighbors Turkey and Azerbaijan, the case of Nagorno-Karabakh being at the center of the deteriorating relations.  Armenia needs Russia’s support in the military conflict with Azerbaijan over Nagorno-Karabakh, something that the EU is not able to provide. Furthermore Armenia has no coal, natural gas or oil supplies of its own and is blocked by Turkey and Azerbaijan for energy supply and it is therefore heavily dependent on Russia to supply its energy. And at last the Armenian diaspora residing in Russia also urges the country to seek closer ties.

Economically Armenia could benefit greatly from closer ties with the EU through the DCFTA. Since the EU is its largest trading partner.  Especially the foreign investment that the DCFTA would bring would certainly benefit Armenia economically. Next to economic benefits the EU-Armenia Association Agreement calls for political reform, especially concerning the rule of law, democratic values, human rights and the fight against corruption. Instead of insisting on political reforms, the EEU in its current state focusses mainly on economic integration and provides Armenia with a powerful and attractive single economic space that could in the future attract large-scale trade from Europe and Asia without having to improve the rule of law, democratic values and its human rights situation.

Many Armenians favor European culture and values, but they do not seem to believe that Europe can provide them with the so needed security. In general the best for Armenia would be to somehow seek simultaneous participation in both the economic blocs. The EU could provide Armenia with the assets and knowhow to establish a ‘modern European state with European values’, while cooperation within the framework of the EEU would provide for Armenia’s security.

Although EEU membership is incompatible with the Association Agreement that Armenia was planning to sign within the Eastern Partnership program of the European Union. The European Union has officially stated that it will continue to cooperate with Armenia in all areas that are compatible.

The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to the Peace Palace Library.

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