The European Union Policy in the South Caucasus

The European Union appeared on the South Caucasus scene in the early 90s. The EU launched the TACIS (Technical Assistance to the Commonwealth of Independent States (CIS)) program in 1991 to sustain the economic reform and development process in the CIS countries and to support their integration into the world economy. In this context, TRACECA (Transport Corridor Europe-Caucasus-Asia) and INOGATE (Interstate Oil and Gas Transport to Europe) was initiated under the TACIS program. TRACECA, launched in 1993, aims at facilitating the countries’ access to world markets by developing a transport and transit corridor. The TRACECA project provided an alternative to the traditional and widely used Moscow route and hence bore strategic importance to presenting an alternative transportation route to Europe. Moreover, the agreement was reached for the transportation of heavy-duty material through the TRACECA route and it was emphasised that this corridor was the shortest, fastest, and cheapest route from Asia to Europe. In 1996 formal relations with the European Union (EU) began with the signature of the Partnership and Cooperation Agreement (PCA) between the EU and Armenia, Azerbaijan and Georgia. This agreement entered into force in 1999 and marked the beginning of a mainly positive relationship between the South Caucasus countries and the EU, with both sides benefitting from the relationship. In 1999, an Umbrella Agreement was signed on the development of hydrocarbon transportation networks between the Caspian Basin and Europe across the Black Sea region. Through these assistance programs, the Commission has been able to facilitate the building of railroads, road networks, oil and gas pipelines, and the enhancement of institutional, administrative, and judicial reforms that have made it possible for Armenia, Azerbaijan and Georgia to join the Council of Europe.

In February 2001, the Swedish Presidency decided to send the high-level EU mission to the region, to start discussions on moving towards a more effective EU policy in Southern Caucasus. In March 2003, the European Commission published its Communication “Wider Europe-Neighbourhood: A New Framework for Relations with our Eastern and Southern Neighbours”. The EU which excluded the South Caucasus states from Wider Europe Neighbourhood in March 2003, claimed, shortly after this date, in June 2003, that these states should be considered within the EU’s neighbourhood in the draft strategy titled “A Secure Europe in a Better World“.

In June 2004, the European Council decided to include Armenia, Azerbaijan and Georgia in the European Neighbourhood Policy (ENP). The objective of the European Neighbourhood Policy is to share the benefits of the EU’s 2004 enlargement with neighbouring countries – stability, security and well-being in a way that is distinct from EU membership. The ENP was based on a commitment to the shared values of democracy, rule of law, good governance and respect for human rights, and the principles of the market economy. The enlarged EU had new borders. These new borders also brought immediacy to the EU’s thinking about the states on its periphery and the policies adopted in response to potential and actual threats emerging from these regions.

Moreover, the Black Sea Synergy has introduced in 2007 which was designed to boost regional economic and trade relationships between the Black Sea countries. However, the project has broader significance, while the existence of the conflicts hampered the fulfilment of the EU’s initiated programs.

The “Eastern Partnership” for the South Caucasus

EU foreign policy in the South Caucasus is conducted primarily through the regional framework of the Eastern Partnership (EaP), which includes the six former Soviet Union countries of Belarus, Ukraine and Moldova in Eastern Europe, as well as Georgia, Armenia and Azerbaijan in the South Caucasus. The Eastern Partnership Program (EaP) under the  EU’s Neighbourhood Policy is designed to create stability, prosperity and good governance in the countries on Europe’s periphery. Since 2009, the EaP has offered new opportunities for South Caucasus countries to develop their relationship with the EU. Armenia, Azerbaijan, and Georgia have diverse foreign policy priorities and domestic reform processes therefore, they have different expectations vis-à-vis the EU.

Over the past few years, Georgian attitudes towards the EU have shifted as a result of both regional and domestic developments. During the early years of the Saakashvili presidency (between 2004-2013), integration with the EU was not a key priority; instead, membership in the North Atlantic Treaty Organisation (NATO) was. The 2008 conflict with Russia – which resulted in the de facto loss of Abkhazia and South Ossetia while also putting an end to the hopes of NATO accession in the short run – marked a turning point. For Georgia, the EU’s EaP has two major failings. First, it falls short of offering any prospect of membership and the recognition of Georgia as an ‘Eastern European country in the 2014 Association Agreement is of little consolation. Second, the EaP offers nothing to address Georgia’s immediate security concerns. For example, the November 2014 ‘Treaty on Alliance and Strategic Partnership’ between Russia and Abkhazia triggered suspicion and concern in Tbilisi, but the EU could do nothing more than reiterate its support for Georgia’s territorial integrity.

While Armenia chose to join the Russian-led Eurasian Economic Union (EAEU), Yerevan welcomed the EU’s enhanced offer under the EaP. The 2008 conflict in Georgia and a failed rapprochement with Turkey made the country more vulnerable and the country needed urgency for greater economic modernisation. Despite the EAEU accession, the Armenian authorities have sought to preserve links with the EU to the greatest extent possible. While the EAEU membership and a Deep and Comprehensive Free Trade Area (DCFTA) are mutually exclusive, Armenia was keen to conclude an agreement that would reflect improved relations with the EU – perfectly, an Association Agreement (AA) without a trade component. However, this is unlikely to be easily accepted by the EU, since Yerevan’s 2013 U-turn generated disappointment and mistrust in Brussels.

Azerbaijan seemed open to some reforms inspired by Brussels and competed with Yerevan on receiving better marks in annual EU reports. Looking at the EU approach; first, the EU is less concerned about developments in a country that is not a direct neighbour and has no desire for membership. Second, the EU views Azerbaijan as an alternative to Russia for gas supplies. Last, the country is an interesting partner of the EU from a geostrategic perspective. Like neighbouring Iran, yet moderate and secular, and is ethnically and linguistically close to (NATO member) Turkey.

In December 2019, the 8th Euronest Parliamentary Assembly passed a resolution on the creation of a new instrument known as the “Trio Plus Strategy 2030”. The strategy foresees the creation of a “new generation of institutions and policies, sustainable trade and stabilisation agreements”, which is complementary to the EaP. The Trio includes the EaP states of Georgia, Ukraine and Moldova, and seeks to reinforce their reforms in the rule of law and democracy and to go much further in their integration with the EU over the next decade. The strategy has also recommended a “more comprehensive and enlarged strategic format Trio + 1” that includes Armenia”.

Consequently, Georgia has the strongest relations with the EU and signed a bilateral Association Agreement (AA), which includes a Deep and Comprehensive Free Trade Area (DCFTA) and visa liberalisation. Armenia has signed a Comprehensive and Enhanced Partnership Agreement (CEPA) with the EU – a less integrative agreement that recognises Armenia’s membership of the Russia-led Eurasian Economic Union (EAEU). Azerbaijan does not seek significantly closer political integration with the EU, and support is provided through Action Plans.

Latest Developments…

Proposed European Union membership with Georgia

The European Parliament passed a resolution in 2014 stating that “by Article 49 of the Treaty on European Union, Georgia, Moldova and Ukraine, as well as any other European country, have a European perspective and can apply for EU membership in compliance with the principles of democracy, respect for fundamental freedoms and human rights, minority rights and ensuring the rule of rights.” Georgians welcomed membership, with 77% of the population approving the government’s goal to join the EU and only 11% opposing it according to the survey.

The Ministry of Foreign Affairs of Georgia has submitted an action plan to achieve accession to the European Union. The commission received information about the implementation of the Georgia-EU Association Agreement and the National Action Plan for the Implementation of the Association Agenda. The European Commission commended the reforms of the Georgian Government aiming at the implementation of the Association Agreement.

Georgia was planning to apply for EU membership in 2024, after further reforms. Amid the 2022 Russian-Ukrainian War, this was expedited to 3 March 2022. On 11 April, Georgia received EU Membership Questionnaire to fill out and send it back for review in May. On June 17, 2022, the European Commission recommended that Georgia have the perspective to become a member of the European Union, but deferred recommending it be given candidate status until after certain conditions were met. On June 23, 2022, the European Parliament adopted a resolution calling for the immediate granting of candidate status for membership of the European Union to Ukraine and Moldova to grant Georgia the status of a candidate for accession to the European Union after a set of recommended reforms. The EU asked Georgia to complete economic reforms including more investment in education, renewable energy generation, and transportation and requested political reforms including reduced political polarization, election reforms, judicial reform, stronger anti-corruption institutions, implementation of “de-oligarchisation”, reduction organized crime, protect journalists from government interference and criminal threats, protection of vulnerable groups against criminal human rights violations, improving gender equality, reduce violence against women, increase decision-making influence of civil society, and make the public defence more independent.

Common aviation area with Armenia

Armenia is a member of the European Civil Aviation Conference (EUROCONTROL) and a partner of the European Aviation Safety Agency. After the new Armenia-EU Partnership agreement was signed in February 2017, Armenia began negotiations to join the European Common Aviation Area. During the first round of talks, the Head of Armenia’s Civil Aviation Department stated that Armenia attaches great importance to joining the common aviation area and that this will allow Armenian and European airlines to further boost their activities and allow more European airlines to fly to Armenia. The EU Delegation in Yerevan stated that the agreement will enable Armenia to have a stronger connection with Europe and the outside world and will open up new travel routes while reducing travel costs for passengers. Once the agreement is finalized, airlines will have the opportunity to operate new routes without any limitations and enjoy equal opportunities of servicing a market with a population of 500 million.

On 15 November 2021, Armenia and the EU finalized the Common Aviation Area Agreement negotiations. The benefits of the agreement included new air transport opportunities, more direct connections and economic benefits to both sides. All EU airlines can operate direct flights from anywhere in the EU to any airport in Armenia, and vice versa for Armenian airlines. All limitations and restrictions on flights between Armenia and the EU were removed. With the agreement, Armenia should further align its legislation with EU aviation rules and standards.

Energy crisis: Azerbaijan, energy partner of Europe

Azerbaijan is a major oil and natural gas supplier to the European Union, and there are many joint energy initiatives between the two sides.

Azerbaijan has been sending natural gas via the Trans Adriatic Pipeline (TAP) to the European marketplace since December 31, 2020. TAP forms a part of the Southern Gas Corridor (SGC) mega pipeline, which is designed and built for increasing and diversifying European energy supplies by bringing Caspian natural gas to Europe for the first time. TAP, the final segment of the corridor, starts at the Turkish-Greek border and runs along 773-kilometre onshore and 105-kilometre offshore routes traversing Greece and Albania toward its end destination in Italy.

The three-segmented SGC traverses seven countries and six regulatory systems, links 11 different investors, and supplies 12 different gas buyers, primarily in Europe. The 3,500-kilometer-long mega pipeline strengthens European energy security, diversifying its energy supplies and boosting decarbonization efforts by providing an uninterrupted flow of Azerbaijani gas. The Southern Gas Corridor, defined as one of the world’s most complex and expensive pipelines built to date, is a unique energy route that carries natural gas from the Caspian Sea reserves directly to the European marketplace. The main source of natural gas for the SGC is Azerbaijan’s offshore Shah Deniz field, with an estimated 1.2 trillion cubic meters of proven reserves.

The European Union countries have been experiencing a steep gas crisis amidst the escalation of an economic conflict between the West and Russia – the largest supplier of natural gas to Europe.  However, since Russia invaded Ukraine in February of 2022, the supplies dropped due to the West’s economic sanctions against Moscow. Russia’s state-run energy operator Gazprom halted gas exports to Poland and Bulgaria as it demanded the payments to be made in Russian roubles.

The escalations with Russia pushed the EU leaders to seek alternative supplies to fill the gap left after a decrease in imports from Russia. Although Azerbaijan is not able to compete with Russian supplies given the volume of its annual transportation, Baku is well placed to help the EU solve the gas crisis.

Currently, the European market accounts for the largest share of daily gas exports from Azerbaijan. In the first quarter of 2022, 2.6 billion cubic meters of Azerbaijani gas reached the European markets.37

Conclusion: South Caucasus region with its links to Central Asia and energy-rich regions, is of particular interest to the European Union. In addition, the South Caucasus region is a bridge between Europe and Asia.

After the collapse of the Soviet Union, the support of global and regional powers was important for the development of the newly independent South Caucasus countries. In the 1990s, the European Union preferred to implement projects and programs aimed at the economic and social development of the countries of the region. Such programs have made a significant contribution to the infrastructure development of the three South Caucasus countries. With the European Union’s Neighborhood Policy, the approach to the South Caucasus region has also changed, and the European Union has begun to offer political support and the development of civil society. Certainly, the Eastern Partnership program encouraged this support to deepen. Although the Eastern Partnership program failed to fully achieve its goals, the program offered opportunities for multifaceted cooperation with the three countries of the South Caucasus – Armenia, Azerbaijan, and Georgia and contributed to bilateral cooperation with the European Union.

According to its Agenda, the European Union has approved the green light for Georgia’s efforts to join the Union, has signed new cooperation in the field of aviation with Armenia, and has formalized the long-term use of Azerbaijan’s alternative energy after strained relations with Russia.

Aytan Aliyeva
Aytan Aliyeva
Aytan Aliyeva graduated from the School of International Relations and Regional Studies at the Azerbaijan University of Languages. Ms. Aliyeva has more than seven years of work experience; as external relations and partnership officer and Secretary General for the international NGO – “Great Silk Way” International Youth Union, Assistant to the member of parliament and head of the Youth and Sports Committee of the Azerbaijani Parliament on foreign relations, especially on security and energy issues, and head of the Department of Foreign Relations and International projects at the Fund for Support to Azerbaijani Diaspora. Aytan Aliyeva is doing a PhD in the Vienna Doctoral School of Social Science, Department of Political Science at the University of Vienna. She examines Transport Connectivity between the European Union and China and the role of the South Caucasus region. She is considered an expert on Connectivity Policy, Geopolitics, China, European Union, South Caucasus.