The EU has in past years been criticised over its lack of a strategy for the South Caucasus. Indeed, the EU has never developed an explicit, tailor-made and overarching strategy for the region. It instead integrated the region in the early 2000s in its more general European Neighbourhood Policy and later the multilateral Eastern Partnership framework. These policy frameworks do not however show the full picture of the EU’s engagement with the countries in the region. Judging from its actual engagement with the South Caucasus region, we identify four sets of objectives and/or interests of the EU in the region.
These are the following:
It is important to note that these are not necessarily, or not all, explicit objectives to be found in EU policy documents and/or public communications. Instead, some, such as pushing back Russian influence, should be seen as more implicit interests of the EU rather than explicit objectives. They are discussed in detail below.
Norms and Values
The first objective of the EU in the South Caucasus is to export European values on good governance, democracy, human rights and rights for minorities as enshrined in Article 2 of the Treaty on the European Union.
The reliance on the export of the EU acquis has been much discussed when it comes to the EU approach towards the South Caucasus. Both the European Neighbourhood Policy (ENP) and the Eastern Partnership (EaP), which form the basis of EU engagement with the South Caucasus, emphasize the importance of good governance and democracy as a key driver for security and stability.[23] Moreover, the EU normative approach is enshrined in the Partnership and Cooperation Agreements, which require the South Caucasus states to cooperate with the EU “to strengthen the rule of law, and the protection of human rights and fundamental freedoms according to international law and OSCE principles”.[24] Obligations related to human rights, democracy and the Rule of Law are further outlined in the AA/DCFTA between the EU and Georgia and the CEPA Agreement between the EU and Armenia.
The EU has long maintained a modernization narrative, in which more democracy brings more economic development, which in turn leads to more political stability. However, despite the EU’s focus on democratization, the South Caucasus at large has not yet gone through a decisive democratic transformation. The absence of an EU membership perspective before the Russian invasion of Ukraine, the lack of coherence in EU foreign policy, and inconsistency in applying democratic conditionality have all undermined the EU’s performance in promoting democracy in the region.[25] In addition, as the EU itself realised in its 2015 revision of the European Neighbourhood Policy, “not all partners aspire to EU rules and standards”[26]. As such, the EU introduced differentiation as the “hallmark of the new ENP”[27], thereby effectively shifting its normative approach towards a more interest-driven one. As a result, in the South Caucasus, and especially towards Azerbaijan, EU engagement on democracy and human rights, including minority rights, has been fairly limited in the past years. In the region at large, actual democratic performance has only increased in the past years in Armenia, as can be seen in the graph below. Interestingly, in spite of a more pragmatic and transactional turn in the EaP, the EU’s general foreign policy discourse has remained largely normative, leading to a significant gap between the EU’s discourse and actual engagement.[28]
Consolidated Democracy 5.01-7.00, Semi-Consolidated Democracy 4.01-5.00, Transitional/Hybrid Regime 3.01-4.00, Semi-Consolidated Authoritarian Regime 2.01-3.00, Consolidated Authoritarian Regime 1.00-2.00.
Source: Freedom House, “All Data- Nations in Transit 2005 - 2022”, accessed 27-02-2023
Stability and Security
A second objective of the EU for the South Caucasus is to promote stability and security in the region, amongst others by contributing to the resolution of the protracted conflicts and enhancing the resilience of the South Caucasus states against security threats.
The EU has often been criticised for disregarding the security needs of Armenia, Azerbaijan, and Georgia, especially in the context of the EaP.[29] Its normative discourse indeed does not always connect well to the priorities of the countries in the region that experience protracted conflicts and territorial disputes. The EU Global Strategy in 2016 only discussed security challenges in the ENP in terms of resilience, although in recent years the EU discourse has become more security-focussed.[30] For example, in 2020 the EEAS declared the ambition of ‘stepping up support for security dialogues and cooperation’.[31]
In practice, especially concerning Nagorno-Karabakh, EU engagement has been modest. Nevertheless, the EU plays various roles with regard to the conflicts in the region. First, it acts as a facilitator of conflict resolution, for example through its position as a co-moderator of the Geneva International Discussions on Abkhazia and South Ossetia and through its Special Representative, Toivo Klaar. Second, the EU seeks to contribute to conflict resolution and to prevent new conflicts through its CSDP EUMM mission in Georgia and more recently the Monitoring Capacity on the Armenia-Azerbaijan border, which has recently been replaced by a more permanent mission.[32] Third, the EU supports reconstruction and reconciliation efforts in the region at large, e.g. through its EU4dialogue programme.
The EU has furthermore been active in terms of enhancing resilience against security threats, particularly those emanating from Russia. The EU has done so mainly through strengthening democratic institutions in Georgia and Armenia, security-sector reform and training in especially Georgia, and support for media freedom and political plurality in both countries. Taken altogether, through these efforts the EU has sought to enhance both the security and the stability of the region.
Economic relations and development
The third EU objective in the region is to gain economic benefit and secure energy and trade interests by contributing to economic governance and development, the development of transport infrastructure (relevant especially in terms of the Middle Corridor) and energy connections.
Already since the fall of the Soviet Union, EU engagement with the South Caucasus has focused on expanding economic development and cooperation. Over the past thirty years, the EU expanded trade with all three countries in the region starting with applying WTO special provisions for developing countries, the so-called Generalised Scheme of Preferences (GSP), to Georgia in 1995 and Armenia in 2006. With both countries, the EU also concluded so-called Partnership and Cooperation Agreements (PCA) in 1996 that outlined economic cooperation.[33] With Azerbaijan, the EU also concluded a PCA in 1996 which currently does not include trade preferences but eliminates trade quotas.[34] These measures have contributed to the EU becoming the biggest trade partner for Georgia and Azerbaijan in terms of exports and imports, while for Armenia Russia is still the main trade partner, as can be seen in the graph below. Trade relations with Georgia have become the most developed since the entry into force of the Deep and Comprehensive Free Trade Agreement (DCFTA) in 2016 that eliminates many trade barriers.
Source: International Monetary Fund, Direction of Trade Statistics, accessed 27-02-2023. Note: The Armenia data for 2019 are from the World Bank, as the IMF lacks data on Armenia’s imports/exports in 2019.
Also, when it comes to investments, the EU plays an important role in the region. The European Bank for Reconstruction and Development (EBRD) is active in all three countries, mainly supporting infrastructure, the financial sector and business development (especially small and medium-sized enterprises, or SMEs in short).[35] In terms of transport infrastructure, the EU is contributing, including through the EBRD, to developing local and regional ports as well as road and railroad connections to boost the so-called Middle Corridor, a trade corridor from China to Europe through the South Caucasus.
When it comes to energy, in 2014 the EU adopted a European Energy Security Strategy with diversification as its main priority, following earlier interruptions to its gas imports and unrest in Ukraine. In its 2016 Global Strategy, the EU considered energy diplomacy as the main instrument to ‘strengthen relations worldwide with reliable energy-producing and transit countries, and support the establishment of infrastructure to allow diversified sources to reach European markets’.[36] In the South Caucasus, the main focus has thereby been on Azerbaijan. Most recently, after the Russian invasion of Ukraine, the EU stepped up its investments in the Southern Gas Corridor (SGC) through Azerbaijan and Georgia in order to increase import capacity.[37] Commission President Von Der Leyen visited Baku in July 2022 to sign a Memorandum of Understanding to double the capacity of the SGC, as well as to improve cooperation on renewable energy and combating Climate Change.[38]
Geopolitical consolidation
Fourth, the EU in the South Caucasus seeks to contain and push back the influence of the Russian Federation by promoting the resilience of Georgia and reducing the Russian grip on Armenia.
In the past years, the EU has been forced to face geopolitical competition with other powers, even if it considered its own Eastern Partnership policy as ‘not aimed against anyone’.[39] In spite of this point of view, especially the Von Der Leyen Commission has aspired to play a geopolitical role in especially the EU’s neighbourhood. Initially struggling to secure such a role, the Russian invasion of Ukraine marked a clear shift for Von der Leyen personally as well as for her Commission and other EU institutions towards a more geopolitically motivated discourse. Apart from military support for Ukraine, the EU granted an EU accession perspective to Ukraine, Moldova and Georgia for largely geopolitical reasons.
In the South Caucasus, the EU in 2022 also asserted a somewhat more geopolitically assertive stance towards Armenia, but continued Russian leverage over both the economy and security of the country have impeded EU efforts. As long as Russia retains its military bases in Armenia and the country remains part of the Russia-led Collective Security Treaty Organization (CSTO), even if it is an uneasy relationship, the EU and other Western partners will not be able to play a significant hard security role in the country. That is unlike in Georgia, where through NATO, but also the EU itself, security cooperation and military training can take place on a continuous basis. All in all, especially since the Russian invasion of Ukraine, the EU has displayed a willingness to capitalise on opportunities to push back against Russia’s influence in the region, and we can expect the EU to continue this approach as long as Russia upholds hegemonic ambitions towards its “near abroad”.
The EU’s end game for the South Caucasus remains unclear
While in theory the EU’s soft power approach remains its main policy track, in practice we see that stability concerns, strategic interests as well as geopolitical considerations often take precedence over the formal policy paradigm enshrined in the ENP and EaP. Problematically, it would be hard to find an overall strategy in the EU’s application of its sometimes conflicting policy goals. The EU’s stability vs. democratisation dilemma – the fact that the promotion of democracy may in the short run affect perceived stability offered by semi- or undemocratic governments – has already been visible for a longer period of time.[40] However, 2022 also laid bare the geopolitics vs. democratisation, most concretely in the dilemma whether or not to grant EU candidate status to Georgia for geopolitical reasons in spite of a lack of democratisation efforts. A third dilemma became visible between the EU’s own interests vs. its normative agenda, whereby for example for the sake of EU economic needs, its normative objectives are temporarily downplayed.
As a result of realities on the ground and as reflected in its differentiation agenda, the EU in its approach towards Azerbaijan appears to have long given up on the objective of exporting EU values. The EU's more interest-driven approach became very clear when in 2022 Von der Leyen visited Baku to secure a gas deal without mentioning human rights violations or the conflict with Armenia at all. At the same time, the EU resisted granting Georgia candidate status for geopolitical reasons, knowing that it would harm its democratisation objective in the longer term (as will be reflected upon in chapter 3).
These examples show that the EU is rather inconsistent and has deviated from its initial normative approach through which it also hoped to export stability. This has led some authors to conclude that the failure to promote democratisation has resulted in remaining and even intensified security challenges.[41] It is surely too much to attribute a causal relation between the two, but it is clear that the EU has not succeeded in its aspirations and is caught up in a relatively reactive, short-term and ad-hoc modus operandi. Key to turning its investments in political and financial terms into a success will be to develop and implement a more holistic vision for the future of the region at large and the countries individually. That means that the EU should more narrowly define its priorities and make clear which objective takes precedence over the others, both in its general approach as well as in specific situations. At the same time, as will be discussed in the section on Georgia, it is possible for the EU to pursue a strategy in which its objectives are not mutually exclusive, but in which the normative approach forms a basis for guarding geopolitical interests and securing longer-term stability.