Co-authors: Anahide Pilibossian, Vice President of Strategy and Development, and Benyamin Poghosyan, Senior Research Fellow
The events of the year 2022 led the European Union to build up its foreign and security policy efforts. Its unprecedented actions in the South Caucasus since then include:
- The EU and Azerbaijan signed a Memorandum of Understanding on a Strategic Partnership in the Field of Energy in July 2022.
- In late 2022, a short-term EU civilian observer mission was established in Armenia (despite Armenia being a member of the Collective Security Treaty Organization [CSTO]), followed by a two-year mission, the EU Mission to Armenia, in February 2023. A New Partnership Agenda was announced in February 2024.
- Georgia received EU candidate status in December 2023.
- European Council President Charles Michel initiated the Brussels format to facilitate peace negotiations between Armenia and Azerbaijan.
While the EU’s intention of being a constructive neighbor and a foreign policy powerhouse in the region is commendable, regional events have stress-tested its strength, signaling the limits of its engagement.
- In pursuing energy diversification, the EU replaced its energy reliance on a large-scale authoritarian regime with a suite of energy partners, including a medium-sized authoritarian one in Azerbaijan. To meet its gas export obligations committed to in the arrangement with the EU, Azerbaijan entered into a gas deal with Russia. Azerbaijan imported Russian gas to use for domestic consumption to free more volume of Azerbaijani gas to export to the EU. However, it was not clear whether the Russian gas was used to warm European homes, or Azerbaijani ones.
- Despite negotiations facilitated by Brussels in 2022–2023, the EU failed to prevent Azerbaijan’s use of force in Nagorno-Karabakh in September 2023. A lack of policy unity among the 27 European Union countries (the EU27) prevented the desired level of support being made available to Armenia after that.
- Georgia unexpectedly adopted a strategic partnership with China in July 2023. Nine months later, Georgia passed a suite of laws, including the controversial “Law on Transparency of Foreign Influence,” contradicting its constitutional Euro-Atlantic aspirations. A rapprochement between Georgia and Russia, particularly economically, has also been observed.
- After Nagorno-Karabakh was cleansed of Armenians in September 2023, Azerbaijan’s president, Ilham Aliyev, refused to engage in the Brussels format from that point forward.
A growing number of commentators—including the European Council on Foreign Relations (ECFR), the German Council on Foreign Relations (DGAP), the European Policy Centre (EPC), and the Georgian Institute of Politics (GIP)—have deplored the patchy and reactive nature of the EU’s approach. APRI Armenia called it “a lack of strategic vision.” The absence of a cohesive approach to the region undermines the EU’s policy objectives of being recognized as a “geopolitical weight and influence on the global stage,” as set out in Ursula von der Leyen’s political guidelines for the 2024–2029 European Commission.
With new policy leadership across the three EU institutions, now is an opportune time to reassess the effectiveness of the EU’s regional foreign policy objectives. The omission of the South Caucasus (and of its neighbors, except for Russia in the context of the Ukraine war) from the political guidelines for the new European Commission has been noted. We believe this omission is a mistake for several reasons.
- First, the EU cannot ignore the conflicts in the South Caucasus as it aims to achieve stability across Europe—a political objective for the new Commission—given its geographical proximity to the region.
- Second, the South Caucasus is quintessentially a crossroad, and therefore has the potential to be a hub of trade routes, connecting the EU with the Middle East, Central Asia, Southeast Asia, and China. (President von der Leyen has identified trade as the second pillar of the EU’s economic foreign policy.)
- Finally, failing to sustain its engagement in the region after unprecedented actions will not only shatter the EU’s foreign policy aspirations but also profoundly impact the people of the South Caucasus.
The 2024–2029 European Commission must–for the sake of the EU’s stability, global standing, and the power it seeks to project to its citizens and the world— continue its engagement in the South Caucasus. Although not mentioned in the new Commission’s political guidelines, the fact that the three South Caucasus countries remain part of the European Commission Directorate-General for Enlargement, including the Neighbourhood portfolio, attests to the region’s strategic importance for the EU. The question is how EU leadership can strengthen its regional policy.
- Shape the EU’s strategic vision for the South Caucasus: To help formulate its strategic vision, the EU should further initiate and engage in Track 1.5 dialogues. This will help it better understand the South Caucasus region and its potential. The EU should focus on the region’s geo-economic advantages and the untapped potential for values-based trade connectivity. It should also support institutional capacity-building to help these countries make their policy institutions more effective.
- Strengthen its diplomacy with actions: EU officials’ statements must be followed by concrete actions. The Georgian government’s behavior this past year was largely met with soft responses from the EU, with a shift occurring only recently. The statement by the High Representative on developments in Nagorno-Karabakh, made while Armenians in Nagorno-Karabakh were under siege—“The EU stands ready to take appropriate actions in the event of a further deterioration of the situation”— was not followed through. The South Caucasus and regional powers remember these missed opportunities for the EU to assert its influence. The EU must use its leverage, not just rhetoric, to pressure Azerbaijan into signing a comprehensive peace agreement to deliver durable peace to the region.
- Engage with Turkey on the South Caucasus: Opening the Armenia–Turkey border would bring stability to the region and increase Armenia’s flexibility in its foreign and economic policies. Turkey has rejected normalization with Armenia, making it conditional on the signing of an Armenia–Azerbaijan agreement, which has become a moving target. The EU should be more assertive in urging Turkey to open the border with Armenia, as this would unlock benefits to the region.
- Reevaluate the Eastern Partnership: The EU should approach reforms in a more dynamic way to ensure that its policies remain relevant. As we have argued before, a profound overhaul of the Eastern Partnership could be instrumental in shaping the much-needed strategic vision of the EU’s place in the South Caucasus. The EU could consider creating a South Caucasus Partnership. In this new Partnership, investments in regional infrastructure projects that support connectivity and political peace could play a central role.
- Always include all three countries in regional economic projects: The exclusion of Armenia when the Black Sea Submarine Cable Project was signed in December 2022 between Azerbaijan, Georgia, Romania, and Hungary, in the presence of the European Commission’s president, was unjustified. The EU did shift its position in October 2023 by stating its support for Armenia’s participation in the project. However, such exclusion, even tacitly, should not have been acceptable in the first place, especially since the EU is built on the philosophy that intra-regional economic projects help foster peace. This commitment to economic inclusivity should extend to all ongoing trade connectivity considerations.
- Create values-based economic relations with third countries: The EU should integrate a human rights due diligence process into its trade relationships with non-EU countries, similar to the expectations it places on its companies under the Corporate Sustainability Due Diligence Directive. This approach will most effectively link the EU’s values-based foreign policy with its trade policy.
We believe that the EU, with its constructive philosophy and geographical proximity that help it navigate geopolitical complexities, can be a force for good in the South Caucasus. This would benefit EU citizens and the people of the South Caucasus and strengthen the EU’s standing in an unstable global order.
