Despite the severe economic crisis and political conflicts currently affecting the European Union, the Armenian leadership appears to be setting its country on a path towards EU membership. On January 9, the Armenian government approved the draft law “On the initiation of the process for Armenia’s accession to the EU”. Now, the country’s parliament must decide on this draft law.
Armenian Prime Minister Nikol Pashinyan stated that the draft law should not be considered as an application for immediate EU membership. Rather, it is a signal of Armenia’s willingness to work practically on its rapprochement with the European state community and to develop an action plan. It will later be decided whether the question of EU membership will be put to a referendum.
Observers are unanimous, however, that the decision of Yerevan to start the EU integration process will fundamentally change both the country’s foreign policy and its economy. The ex-Soviet republic is not only a member of the Russian-led military alliance “Collective Security Treaty Organization” (CSTO), but also a part of the “Eurasian Economic Union” (EEU) – an organization for economic integration, to which, besides Russia and Armenia, Kazakhstan, Kyrgyzstan, and Belarus also belong, and in which Moscow also has a leading role.
As for the fate of Armenia in the CSTO in the context of the EU initiative of the Armenian government, there has been no clear statement from Moscow yet. However, regarding the continuation of Armenia’s membership in the EEU, the Russians have already expressed skepticism.
Dmitry Peskov, the official spokesperson of Russian President Vladimir Putin, told journalists that it was “hypothetically impossible” for a country to be a member of both the EEU and the EU. “Here’s a customs zone, here’s a zone of free movement of goods, services, people, and capital, and there’s another, there are other norms” Peskov said.
The Russian Deputy Prime Minister Alexei Overchuk also stated, according to the Interfax news agency, that it would not be possible for Armenia to combine its European integration with its partnership within the EEU. A membership in both organizations at the same time would be incompatible from the Russian point of view, and therefore, the Armenian draft law on the start of the EU accession process would be seen as the beginning of Armenia’s withdrawal from the EEU.
Overchuk specified that the EEU and the EU were incompatible because in both organizations, no customs barriers occur within the internal borders, and a free movement of goods, capital, people, and services exists:
“It’s impossible to imagine that these two unions will ever come together. Therefore, the draft law ‘On the initiation of the process for Armenia’s accession to the European Union’ presented in the Republic of Armenia poses this country before a choice.”
According to him, the pro-European course for Yerevan could also be very expensive. In the event of Armenia’s withdrawal from the EEU, the energy and food prices in the country would rise significantly. Moreover, the Armenian exports could decline by up to 80 percent due to the customs duties. In this sense, the EU integration of Armenia is comparable to “buying a cruise ticket for the Titanic” said Overchuk.
Yerevan is indeed profiting enormously from its EEU partnership. Especially in the energy sector, Armenia can purchase natural gas at a significant discount. Currently, the Armenians pay only about $170 per 1000 cubic meters of gas, in comparison to the cost of the same amount in the EU, which is currently around $500. Thanks to the cheap energy supplies from the EEU countries, Armenia can strengthen the competitiveness of its production and thus also the entire economy, which, by the way, has been growing very well for several years now: in 2021 and 2022, the country’s GDP grew on average by more than nine percent. In the following year, the growth was 8.3 percent, and for 2024, a six percent growth is forecast.
Another important aspect is the lack of customs barriers in the EEU. This facilitates the export of Armenian goods, for example, to Russia, which is the country’s most important trading partner. Especially after the introduction of anti-Russian economic sanctions by the USA and the EU, Armenia has derived enormous benefits from this. It is one of the countries that, with Russia’s help, organizes the so-called “parallel import” of sanctioned goods, which are banned with Western export prohibitions. According to Russian statements, the trade between the two states even increased by 2.5 times in the first half of 2024 alone due to the additional exports to Russia.
Through an integration with the EU, Yerevan would obviously undermine its economic successes. Besides, the economic prospects of Armenia in Europe are rather gloomy, as most EU member states are currently facing a dangerous recession that they cannot get under control.
Given this, the question arises as to why the Armenian leadership is pursuing the path of EU integration despite this? Critics of the initiative see the cause of this in the failed policy of Prime Minister Pashinyan, who, through his rapprochement with Europe, is trying to distract from his defeat in the conflict with Azerbaijan over the region of Nagorno-Karabakh, which is not only a significant geopolitical setback but also a national catastrophe for the Armenians.
If the Armenian parliament were to approve the government’s draft law, then Armenia would soon have to decide in which direction it will develop in the future. Whether it will continue to profit immensely from its very close economic relations with Russia or whether it will become part of the EU, which is currently in decline.