Balancing Act Redux

Editorial, 30 July 2015

After Armenia abandoned its ambitions to get a foothold in the European Union (EU) and made a 180-degree turn to join the Russian-backed Eurasian Economic Union (EEU), it seemed it was the end of its dual-vector policy aspirations. Putin had obviously called Sarkissian to the carpet and told him to cease and desist courting Europe. But in recent months the EU-Armenia tango has been on again, and Armenia says Russia doesn’t mind.

Armenia’s new move is particularly mystifying in light of President Serge Sarkissian’s recent interview with The Washington Post. Explaining why Armenia had opted for the Russian-led EEU, he said: “Armenian cognac can’t really be sold in Paris, but it does well in the Russian Federation.” He added that one-third of Armenia’s exports go to Russia and its partners. In addition, Russia sells natural gas to Armenia at a discount.

Editorial, 30 July 2015

After Armenia abandoned its ambitions to get a foothold in the European Union (EU) and made a 180-degree turn to join the Russian-backed Eurasian Economic Union (EEU), it seemed it was the end of its dual-vector policy aspirations. Putin had obviously called Sarkissian to the carpet and told him to cease and desist courting Europe. But in recent months the EU-Armenia tango has been on again, and Armenia says Russia doesn’t mind.

Armenia’s new move is particularly mystifying in light of President Serge Sarkissian’s recent interview with The Washington Post. Explaining why Armenia had opted for the Russian-led EEU, he said: “Armenian cognac can’t really be sold in Paris, but it does well in the Russian Federation.” He added that one-third of Armenia’s exports go to Russia and its partners. In addition, Russia sells natural gas to Armenia at a discount.

Visiting the Washington newspaper’s offices in April, Armenia’s president elaborated that a free-trade agreement with Europe wouldn’t have delivered much to Armenia. “Armenia’s economy has to evolve over ten to fifteen years to take advantage of a free trade regime with Europe,” he added. “But in the meantime there is need to survive, and people are not ready to suffer during this long term.”

What happened to change Sarkissian’s argument and embrace EU once again?

The EU has made moves in recent months to open new talks with Yerevan and the other ex-Soviet republics. The new approach is more modest than the original EU Association Agreement but would still offer “privileged partnership” to the six ex-Soviet republics, including political and economic provisions. The provisions are not in conflict with Yerevan’s commitments to the EEU, say Armenian government spokesmen. Typically for the EU, the new deal has a dizzying array of qualifiers, clauses, vague phrases, dos and don’ts. In their sweet time Eurocarts and the RoA negotiators will presumably parse the bureaucratese and tells us what the Brussels jargon means.

Why did the EU revisit the Eastern Partnership agreement? Why doesn’t Russia object to it? What’s in it for Armenia?

It’s easy to conclude that EU’s new approach is another attempt by the European group to expand its frontiers, penetrate and influence Armenia and the other five former Soviet republics (Azerbaijan, Belarus, Georgia, Moldova, and Ukraine). Hegemony traipses a well-trodden path: economics is trailed by politics and shadowed by military influence.  

When the notoriously unpopular Brussels Eurocrats are having a terrible time holding the union together (EU’s sudden tier is in severe economic trouble, many Britons want to leave the EU, a significant percentage of the population in the wealthier EU member countries say they’re fed up supporting the ‘welfare states of the south), why bother with half-a-dozen distant and mostly impoverished countries which have different cultures, history and traditions from that of Europe? Some would speculate the United States is behind the EU change in strategy.

If the EU initiative is meant to enlarge its presence east to Armenia, why is the Kremlin suddenly amenable to the European intrusion into its sphere of influence? Is Kremlin signaling flexibility to the EU in the aftermath of the Ukraine conflict?

Despite being bruised by Putin’s diktat to forget Europe, Armenia never really abandoned its dual- vector strategy. The EU is Armenia’s leading trading partner last year, slightly ahead of Russia. Armenian ministers have repeatedly indicated the country’s long-time cultural links and affinity to Europe. Armenia’s army has taken part in NATO training exercises. In June Yerevan hosted the 3-day NATO Parliamentary Assembly seminar “Security and Stability in the South Caucasus” although it’s a member of the Russian-led defense pact, Collective Security Treaty Organization (CSTO). While Kremlin doesn’t appreciate these Yerevan gymnastics, Defense Minister Seyran Ohanian says Armenia can become “a bridge between NATO and CSTO.”  

It’s likely that Armenia is venturing again into the European waters with renewed determination because Moscow has given Yerevan the green light. Russia might have not objected to the renewed Armenia/EU links because of change in Russia’s foreign policy. Following the Ukraine crisis, Moscow emerged with a new strategy which focuses more intensely on Asia. An important part of that is building bridges with Iran. What better bridge than Armenia? For years Moscow has restricted Armenia from getting close to Iran and has halted various Tehran/Yerevan transportation and industrial projects. Russia, which owns 40 km. section of a gas pipeline from Iran to Armenia, also wanted to reduce the diameter of the pipeline.  As well, a 2013 agreement with Russia’s Gasprom forbids Armenia from purchasing gas from any other provider [meaning Iran] until 2043. Thanks to its new eastward policy, Kremlin sees the opportunity to access Iran and Southeast Asia through Armenia.  

Another reason Moscow might have loosened Armenia’s reins is because Armenia is caught in a logjam and there’s so much the Kremlin can do to buttress is economically. In anticipation to the Iran/West nuclear agreement and the removal of the sanctions, Armenia is hoping Iran will roar into Armenia, investing in the construction of the long-delayed Meghri Hydroelectric Dam and the Southern Armenia Railway, sell products at competitive prices and also become a market for Armenian goods. At present about 3,000 Iranian firms—mostly small—operate in Armenia.

Another incentive for Russian flexibility is the rumor Tehran might sign a free trade agreement with the 180-million EEU market. Such a move would be boon to Putin’s EEU expansion.

Taking advantage of the global strategic changes, Yerevan is back in the dual-vector game, playing music in stereo.