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Armenia: Yerevan Mending Fences With EU

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  • Armenia: Yerevan Mending Fences With EU

    ARMENIA: YEREVAN MENDING FENCES WITH EU

    EurasiaNet.org
    Feb 9 2015

    February 9, 2015 - 11:13am, by Gayane Abrahamyan

    With the Russian economy hitting the skids, it looks like Armenia
    wants to hedge its economic bets. Although Yerevan became a member of
    the Russia-led Eurasian Economic Union in January, a senior Armenian
    government official told EurasiaNet.org that the country is working
    to complete an updated version of an EU Association Agreement that
    Armenian officials put on hold back in 2013.

    Balancing trade and other commitments inherent in EEU membership along
    with those involved with an EU association agreement appear, at least
    on paper, to be problematic. But that isn't deterring Yerevan. A need
    for money seems to be the main motivation. With Russia, Armenia's
    main economic partner, suffering the effects of both low oil prices
    and Western sanctions, Armenia saw its remittances from guest workers
    abroad fall by 39 percent in 2014, and exports sag by 18 percent,
    according to the National Statistical Service. And so far, the expected
    economic benefits of joining the EEU have not materialized.

    Simplified export-import procedures are not in effect yet, while
    import duties have been raised on over 7,000 products.

    Many Armenians had hoped Western sanctions against Russia would cause
    trade volume from Armenia to Russia to rise. Yet Armenian exports
    ended up dropping by 8.9 percent in 2014 compared to 2013. Russia's
    ITAR-TASS news agency, however, claims the exact opposite - an alleged
    increase of 3.2 percent to $1.5 billion.

    Armenian entrepreneurs have not noticed any positive change. "The
    EEU is, by far, not paradise," remarked Raffi Mkhchian, head of
    Armenia's Exporters' Union. "Everything is vague; maybe later things
    will get normalized."

    To justify joining the EEU, Armenian leaders had cited
    strategic reasons, especially a need for a stronger deterrent
    against Azerbaijan. But 2014 has seen the most bloodshed in the
    Nagorno-Karabakh contact zone since the 1996 signing of the ceasefire
    agreement. Ten Armenian soldiers and two civilians were killed during
    the first month of 2015 alone.

    Political analyst Aghasi Yenokian, head of the Armenian Center
    for Political and International Studies, characterized the EEU as
    "half dead." And given that the EEU shows no signs anytime soon of
    fulfilling its initial promise, Yanokian said "it is important to
    have an alternative -- at least in perspective."

    Enter the EU, which, in November, pledged to provide Armenia with up
    to 170 million euros ($192.48 million) through 2017 for encouraging a
    variety of reforms, in particular in the justice sector. In a separate
    package, the EU handed over 77.5 million euros (over $87.7 million)
    in January for agricultural, anticorruption and civil-service reform
    projects.

    Armenian Prime Minister Hovik Abrahamian stated on January 16 that
    such cooperation is "of fundamental importance" for bolstering the
    Armenian economy. Several days later, at a meeting of officials
    working on forms of cooperation with the EU, word emerged that
    "renewed cooperation steps" were under discussion.

    First Deputy Economy Minister Garegin Melkonian called talks with the
    EU "productive" and underlined that "active steps are being taken"
    to formalize Armenia's cooperation with the EU. The aim, he said,
    is to hold onto the free-trade and other economic provisions from
    the 2013 Association Agreement, while "amending the points that are
    subject to change due to the EEU commitments."

    Armenia already exports more goods to the EU than to fellow EEU-members
    Russia, Kazakhstan and Belarus, according to the State Statistical
    Service.

    Some observers say Armenia's re-engagement of the EU doesn't mean
    Yerevan is maneuvering to abandon Moscow any time soon. Political
    analyst Stepan Safarian, a former opposition MP, believes that
    officials' interest in the EU is "limited mainly to getting funds
    from the EU; meaning that these steps to maintain cooperation are
    mostly taken to not lose that support." As yet, Russian officials have
    not responded to Yerevan's latest EU overture. Whether that changes
    "depends on the seriousness of the upcoming [EU association] document,"
    Safarian said.

    At the same time, Safarian believes that rising tension over Karabakh
    has prompted Armenian officials to acquire "a deeper understanding
    of the value of an alternative" to the EEU.

    Editor's note: Gayane Abrahamyan is a freelance reporter and editor
    in Yerevan.

    http://www.eurasianet.org/node/71986

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