Armenia Moves Toward Europe While Still Dependent on Russia

Executive Summary:

• Armenian Prime Minister Nikol Pashinyan has signaled plans to pursue EU membership, which Moscow views as an attempt by Brussels and Washington D.C. to fully replace it.
• Armenia’s reliance on Russia for trade complicates the situation. The economic challenges posed by such a pivot mean the government is likely to face significant domestic opposition.
• The associated economic and geopolitical costs of EU ascension are potentially substantial despite diversification in the area of defense. The same diversification in terms of energy and trade remains long overdue.

On January 9, Armenian Prime Minister Nikol Pashinyan announced his intention to seek EU membership following a public mobilization by extra-parliamentary political forces in support of holding a referendum on such a shift in policy. Although the petition garnered only 60,000 signatures, the Armenian parliament will vote on a corresponding bill (ArmenPress, January 9). The decision marks a further departure from the country’s traditional reliance on Russia that it has held since independence was declared in 1991. Many challenges exist and any path to change the situation is fraught with risks and complications.

Armenia’s foreign policy has significantly relied on its strategic relationship with Russia, particularly in the areas of defense, energy, and trade. The Russian Federation has also long been Armenia’s principal ally. In the years following Russia’s February 2022 invasion of Ukraine, however, Pashinyan has attempted to recalibrate Armenia’s foreign policy by diversifying its international relationships, particularly with the European Union and the United States. This is compounded with a lack of military support from Russia and the Collective Security Treaty Organization (CSTO) during and after the war with Azerbaijan in 2020.

This has already led to Yerevan “freezing” its membership in the CSTO, even if such a mechanism for fully suspending involvement does not exist (Radio Free Europe/Radio Liberty, February 23, 2024; see EDM, August 5, 2024). Furthermore, Russian Federal Security Service (FSB) border guards were withdrawn from passport and customs control on Armenia’s border with Iran as well as Yerevan’s Zvartnots International airport (see EDM, August 15, 2024). Even so, FSB border guards remain indefinitely on the country’s actual border with Iran and Türkiye. The Russian 102nd military base in Gyumri, the country’s second largest city, and the Erebuni airfield still remain and look likely to do so until 2044 (TASS, October 4, 2023; see EDM, March 14, May 2, 2024).

Pashinyan has been cautious in his public statements about EU membership despite a desire for greater integration with Europe. He has stated that Armenia is ready to “be as close to the European Union as the European Union considers possible” (Commonspace, October 18, 2023). This cautious approach may stem from an understanding that Armenia is unlikely to be granted accession in the foreseeable future, given the European Union’s existing enlargement fatigue and challenges in general. Armenia’s geographical situation further complicates this shift. Landlocked with limited access to other markets, Armenia’s foreign trade is heavily reliant on Russia, accounting for 42 percent of its turnover for the first nine months of 2024. In comparison, trade with the European Union constitutes only 7.3 percent (Azatutyun, January 9). Armenia is also dependent on Russia for energy, particularly gas and nuclear (see EDM, July 22, 2024). Furthermore, Armenia’s participation in the Russian-led Eurasian Economic Union (EAEU) further complicates the situation as EU membership would disrupt its participation.

Armenia’s current economic growth is partly driven by the re-export of goods to and from Russia, circumventing international sanctions (Hetq, November 23, 2024). Prior to Russia’s full-scale invasion of Ukraine, trade between Armenia and Russia was valued at approximately $2.5 billion annually, a figure that hit $12 billion last year (Business Media, January 25). Russian Deputy Prime Minister Alexei Overchuk has also warned that leaving the EAEU would result in higher gas prices, increased costs for imported goods, and unemployment in Armenia (Azatutyun, January 9). Gagik Melkonyan, a parliament deputy for Pashinyan’s Civil Contract faction, has dismissed such warnings (News.am, January 10). Melkonyan contends that Armenia’s strategic importance to Russia means that Moscow will accommodate Yerevan’s interests, regardless of any shift towards the European Union. Opposition figures, however, including prominent oligarch Gagik Tsarukyan, have expressed concerns that EU membership could lead to widespread economic hardships, including job losses, higher living costs, and the collapse of local businesses (Azatutyun, January 15). Currently, Russia sells Armenia gas at subsidized rates, a privilege that could end if Armenia were to irk Moscow significantly (Commonspace, May 7, 2024). Even a former U.S. Ambassador last year warned Armenians to prepare for cold winters if it does move further away from Russia (YouTube/bakutvinternational, September 13, 2024).

The European Union Monitoring Mission (EUMA) deployed on Armenia’s border with Azerbaijan has also created tensions with Azerbaijan, Russia, and to some extent Iran. Moscow views the mission as an attempt to oust it from the country while Azerbaijan has repeatedly called for its withdrawal if a peace agreement is to be signed. Pashinyan has suggested that the EU mission could be withdrawn from those parts of the border once demarcated (see EDM, January 16). Nonetheless, closer integration with the European Union could provoke a stronger response from Russia, Iran, and Azerbaijan, potentially destabilizing the region further.

To strengthen its ties with both the European Union and the United States, Yerevan will have to manage expectations. In January, Armenian Foreign Minister Ararat Mirzoyan and now former U.S. Secretary of State Antony Blinken signed a historic Strategic Partnership Charter, outlining a framework for future cooperation, including civilian nuclear energy (Radio Free Europe/Radio Liberty, January 15). Russia’s reaction was swift with Mirzoyan traveling to Moscow to meet with his counterpart, Russian Foreign Minister Sergey Lavrov. Speaking at a joint press conference, Mirzoyan did not commit the government to doing anything more substantial in terms of EU membership (Azatutyun, January 21). That same day, Armenian Parliamentary Speaker Alen Simonyan also appeared to imply that the bill might not even pass, stressing that Armenia has no intention of leaving the EAEU (Azatutyun, January 21). Mirzoyan invited Lavrov to Yerevan for further talks (Public Radio, January 21).

Pashinyan appeared aware of potential concerns while speaking at the World Economic Forum in Davos, highlighting regional trade with neighboring countries, including Iran, over that with the European Union (News.am, January 23). “Deviation from balance can have very serious consequences for security and stability, not only for a specific country, but also for regional and global stability, because instability in any country, even a small one, can be chain-like. That is why, I think, balancing and being balanced is the most important task,” he said (Azatutyun, January 23). Moreover, the Foreign Intelligence Service acknowledged, Armenia’s economic isolation and inability to diversify remains reliant on opening up its borders and normalizing relations with Azerbaijan and particularly Türkiye (ArmenPress, January 23).

The Foreign Intelligence Service further warned that “some countries” will seek to use this issue to destabilize the country in what is now a pre-election year (see EDM, November 27, 2024). It noted that last year there was a foiled attempt to “recruit Armenian citizens and the Nagorno Karabakh Armenians for the purposes of destabilizing the country, inciting violence and overthrowing the constitutional order of Armenia” (Commonspace, March 28, 2024; see EDM, October 7, 2024).

The associated economic and geopolitical costs of EU ascension are potentially substantial despite diversification in the key strategic sphere of defense out of necessity rather than choice (see EDM, September 12, 2024). Ultimately, Armenia’s ability to navigate these challenges will require Yerevan to maintain an equilibrium between competing interests.