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EU TO RETHINK RELATIONSHIP WITH ARMENIA
Business News Europe
Oct 11 2013
bne
October 11, 2013
The European Union is reconsidering relations with Armenia in the wake
of Yerevan's decision to join the Russian-led Customs Union. Officials
confirm the previous plan to sign an association and trade pact with
the Caucasus country is now "impossible".
Poland's Ambassador to Armenia, Zdzislaw Raczynski, told a press
conference in Yerevan on October 10 that the EU is looking for a new
platform of cooperation with Armenia, after President Serzh Sargsyan
on September 3 surprised by announcing his country will join the
Customs Union.
Alongside several other former-Soviet states, Armenia was set to
initial a Deep and Comprehensive Free-Trade Agreement (DCFTA) with
the EU at a summit to be held in Lithuania in November. However,
jealous of its influence in what it terms its "near abroad," Moscow
wants its neighbours join its free trade club instead.
The likes of Ukraine and Moldova insist they will remain on course to
step closer to the EU. Russia has issued stern warnings of economic
meltdown for Ukraine, while launching trade wars against both states.
Lithuanian trade has also been hit, while Polish interests have been
regularly threatened in the run up to the summit.
EU officials expressed their disappointment last month when Armenia
revealed its decision, and several have suggested deals with the EU and
the Customs Union are not compatible. Armenian officials, including
Sargsyan, have however continued to express hope that joining the
Customs Union will not rule out closer association with the EU.
Now, with the other potential partners holding out under the Russian
pressure, Brussels appears keen to underline that there are significant
consequences for Armenia. Cooperation between the EU and Armenia as
previously planned has become "impossible", Raczynski stated frankly,
according to PanArmenian.
Meanwhile, Armenia's relationship with Russia has improved. A natural
gas price subsidy agreement will be signed between Gazprom and Armenian
subsidy ArmRusGazprom in the near future, Armenian Energy and Natural
Resources Minister Armen Movsisyan announced October 8.
Yerevan appeared earlier this year to be moving away from the Russian
sphere of influence. Moscow, however, moved quickly to bring Armenia
- usually one of its closest allies - back into line. A steep hike
in gas prices and a large arms deal handed to Armenian rival and
neighbour Azerbaijan appear have done the trick.
Raczynski said that with an EU trade pact, "Armenia would have a
~@150m income annually. Now let's wait and see how much Armenia's
GDP will grow after joining the Customs Union."
Russia is Armenia's largest trading partner, and bilateral trade grew
22% to $1.2bn (~@910m) in 2012. Russia is also the biggest foreign
investor with a total of $3bn investment last year in a country whose
GDP totalled $9.9bn, according to the World Bank.
http://www.bne.eu/story5424/EU_to_rethink_relationship_with_Armenia
Business News Europe
Oct 11 2013
bne
October 11, 2013
The European Union is reconsidering relations with Armenia in the wake
of Yerevan's decision to join the Russian-led Customs Union. Officials
confirm the previous plan to sign an association and trade pact with
the Caucasus country is now "impossible".
Poland's Ambassador to Armenia, Zdzislaw Raczynski, told a press
conference in Yerevan on October 10 that the EU is looking for a new
platform of cooperation with Armenia, after President Serzh Sargsyan
on September 3 surprised by announcing his country will join the
Customs Union.
Alongside several other former-Soviet states, Armenia was set to
initial a Deep and Comprehensive Free-Trade Agreement (DCFTA) with
the EU at a summit to be held in Lithuania in November. However,
jealous of its influence in what it terms its "near abroad," Moscow
wants its neighbours join its free trade club instead.
The likes of Ukraine and Moldova insist they will remain on course to
step closer to the EU. Russia has issued stern warnings of economic
meltdown for Ukraine, while launching trade wars against both states.
Lithuanian trade has also been hit, while Polish interests have been
regularly threatened in the run up to the summit.
EU officials expressed their disappointment last month when Armenia
revealed its decision, and several have suggested deals with the EU and
the Customs Union are not compatible. Armenian officials, including
Sargsyan, have however continued to express hope that joining the
Customs Union will not rule out closer association with the EU.
Now, with the other potential partners holding out under the Russian
pressure, Brussels appears keen to underline that there are significant
consequences for Armenia. Cooperation between the EU and Armenia as
previously planned has become "impossible", Raczynski stated frankly,
according to PanArmenian.
Meanwhile, Armenia's relationship with Russia has improved. A natural
gas price subsidy agreement will be signed between Gazprom and Armenian
subsidy ArmRusGazprom in the near future, Armenian Energy and Natural
Resources Minister Armen Movsisyan announced October 8.
Yerevan appeared earlier this year to be moving away from the Russian
sphere of influence. Moscow, however, moved quickly to bring Armenia
- usually one of its closest allies - back into line. A steep hike
in gas prices and a large arms deal handed to Armenian rival and
neighbour Azerbaijan appear have done the trick.
Raczynski said that with an EU trade pact, "Armenia would have a
~@150m income annually. Now let's wait and see how much Armenia's
GDP will grow after joining the Customs Union."
Russia is Armenia's largest trading partner, and bilateral trade grew
22% to $1.2bn (~@910m) in 2012. Russia is also the biggest foreign
investor with a total of $3bn investment last year in a country whose
GDP totalled $9.9bn, according to the World Bank.
http://www.bne.eu/story5424/EU_to_rethink_relationship_with_Armenia