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Two years after the Velvet Revolution, Armenia needs the EU more than ever

Dennis Sammut

Date: 02/06/2020
Engaging “strategically, ambitiously, flexibly and inclusively” with Armenia is exactly what is needed at the moment and for the immediate future. But the EU should be ready to take its cooperation with the country to the next level when the time is right.

Armenian Prime Minister Nikol Pashinyan was one of the last foreign leaders to visit Brussels before the Coronavirus lockdown in March. The visit underlined the increased intensity in EU-Armenian relations since Pashinyan became prime minister in May 2018, following the Velvet Revolution. The European Union (EU) has played a crucial role in supporting Pashinyan’s ambitious reform agenda and during the visit, both parties expressed a readiness to further develop cooperation, including in trade and economic relations. Furthermore, the EU’s timely support for Armenia in combatting COVID-19, including through a EUR 92 million financial package, has stood in contrast to the inertia shown by the Russian-led Eurasian Economic Union (EEAU), which Armenia joined in 2016 after it rebuffed an Association Agreement with the EU following Russian pressure.

The Comprehensive and Enhanced Partnership Agreement (CEPA), the new instrument that was subsequently agreed as the new framework for Armenia-EU relations, has yet to be ratified by all EU member states, although large parts of it are already being implemented. While Brussels wants the Armenian government to be more focused on implementing the roadmap for CEPA, to ensure it can be fully operational and give maximum benefit, Yerevan has been distracted, even before the COVID-19 pandemic, by domestic issues.

Coronavirus has already taken a heavy toll on Armenia, with the number of confirmed cases hovering around ten thousand, and 139 deaths so far – numbers that are far larger than those in neighbouring Georgia – and the government has been accused of not having a grip on the situation. On 1 June, Nikol Pashinyan announced that he and his entire family had contracted the virus, adding to concerns.

Russia has failed to offer Armenia any significant assistance during the pandemic, and sometimes appeared to be using the situation to keep the pressure up on Yerevan. Pashinyan has so far succeeded in maintaining a fine balance, including what appears to be a reasonably good working relationship with the Russian president. But the pandemic has made Armenia’s economic needs even bigger than they were before, narrowing the government’s room for manoeuvre. It is important that the EU continues to support and encourage political and economic reform and respect for human rights and the rule of law, while being ready to further step up its engagement if necessary.

Pashinyan’s unorthodox approach

Nikol Pashinyan has plenty of vision and ego. Two years into his premiership, he remains popular with his grassroots supporters, with whom he communicates daily through video messages on his Facebook page, marathon press conferences, and regular television appearances. In the December 2018 parliamentary elections, his ‘My Step’ parliamentary bloc won over 70% of the vote.

Not surprisingly, given the amount of vested interests he has trampled on since coming to power, he has plenty of domestic critics. They claim he does not have the necessary skills to lead the country and lacks a strategic approach. Pashinyan remains a controversial leader who has broken the mould of Armenian politics. His somewhat unorthodox style of leadership often irritates even his supporters. The government system he presides over is designed to resemble a pyramid, with Pashinyan on top and with different layers of activists and loyalists connecting the leader with the people. But for outsiders, Pashinyan’s government often appears as if it is a one-man-show. His critics, including some who supported him in 2018, say that he is not collegiate, and makes decisions based on impulse and deeply entrenched perceptions.

This has especially been the case when it comes to the rule of law and judiciary reform. The Pashinyan government has sought to bring to justice people accused of abuse of power and corruption, including former presidents Robert Kocharyan and Serzh Sargsyan. Critics of Pashinyan say he has spent too much time and energy pursuing old enemies; he argues that people demand justice. Others, more prosaic, say Pashinyan had to go after his enemies before they had time to regroup and go after him. That logic also explains Pashinyan’s approach to the judiciary, which had been packed with sympathisers of the previous government. However, Pashinyan’s attempts at judicial reform were considered to have been rather clumsily executed. In the end, he opted to complete this reform through a constitutional amendment, but the referendum needed to endorse this – originally scheduled for April – had to be postponed because of the COVID-19 pandemic, leaving a loose end that Pashinyan will need to deal with as soon as possible.

But despite his unorthodox approach to government, Pashinyan has proven to be a wily politician rather than a naïve novice. His opponents from the previous government are still out to get him, but so far he has outfoxed them. Going forward, Pashinyan needs to keep his team reasonably united and his opponents dispersed and divided. Some new political forces have started to emerge, less burdened by the past, and less intimidated by Pashinyan’s populist rhetoric. Armenian politics remain highly charged, and many of the state institutions are yet to consolidate following the change of government in 2018, which may lead to unpredictable developments.

Pashinyan’s success and longevity in government will depend on his ability to improve Armenians’ quality of life. Before the pandemic broke out, he had already declared the economy to be front and centre to his strategy, declaring an ‘economic revolution’, and identifying the high-tech sector as Armenia’s niche economic activity. In 2019, Pashinyan’s first full year in office, the country witnessed GDP growth reaching 7.6%, a reduction in poverty and inflation, and the unemployment rate falling to 18% in the third quarter. However, as the World Bank noted in a recent report, “some regions lag behind the rest of the country, and the bottom 40% have not shared equally in overall economic growth.”

COVID-19 will inevitably affect the Armenian economy very negatively this year. A recent IMF report estimates real GDP will contract by 1.5% this year. Pashinyan has expressed confidence that the economy will bounce back in 2021. The future of his government will depend on its ability to do so, and this may in turn depend on other factors outside of Pashinyan’ s control, including the state of the Russian economy. A big chunk of the Armenian economy still depends on remittances from Russia and the earnings of seasonal workers there.

The Kremlin’s overall approach to Pashinyan is best described as ambivalent. Put simply, the foreign policy of independent Armenia has always been about how to manage relations with Russia, and how to use that relationship as a counterweight to Armenia’s regional adversaries, Azerbaijan and Turkey. During the Velvet Revolution and ever since, Pashinyan has emphasised that his was not a western-inspired movement, and that relations with Russia will be maintained at the highest possible level. Over the last two years, his opponents have constantly accused him of failing in that, often predicting that Armenia-Russian relations were on the verge of collapse, or that Moscow was withdrawing its favour of Armenia somehow, especially in the Nagorno-Karabakh conflict. But despite some strains, especially concerning the cost of Armenian energy imports from Russia, there is little indication that either of the two countries wants a dramatic departure from the status quo.

From the start, Nagorno-Karabakh was considered Pashinyan’s Achilles heel. Having pushed out the Karabakh elite from their two decades of power in Yerevan, many expected a backlash. Pashinyan himself appears very aware of this risk and has developed a rather nuanced approach. He managed to build at least a basic level of understanding, even if not yet trust, with the Azerbaijani leadership. He accomplished this mostly through three tête-à-tête informal meetings with President Aliyev, without giving anything in return in the formal negotiation format presided over by France, Russia and the United States as co-Chairs of the OSCE Minsk process.

A somewhat calmer situation on the line-of-contact suits Pashinyan’s strategy of concentrating on domestic, especially economic issues. By regular visits, a bit of cajoling and some arm twisting, Pashinyan has been able to neutralise the threat that a hostile leadership in Nagorno-Karabakh could have posed to him and his government. However, Pashinyan does not seem to have a vision or a strategy for dealing with the Karabakh conflict itself, beyond saying that any solution needs to have the approval of Armenia, Azerbaijan and Nagorno-Karabakh, without suggesting how that state of nirvana can be reached.

Relations with the EU: Is there room for a new level of ambition?

“Strategic, Ambitious, Flexible and Inclusive” is how the EU sees its relations with its six eastern neighbours, including Armenia, according to the conclusions of the European Council on 11 May 2020. Since 2013, and the famous U-turn when Armenia abandoned plans to sign an Association Agreement with the EU, the message from Brussels, coated in the usual plethora of jargon, is that in Armenia the EU is happy to play second fiddle to Russia. This approach, for the moment, suits Armenia too. In the short term, the Union’s approach of supporting poverty reduction, targeted economic sectors, and broadly, the reform agenda, makes sense. On Karabakh, the EU is content to be informed of developments within the OSCE Minsk Group peace process, rather than influencing or directly engaging with it. This too, for the moment, suits Armenia, which does not want any changes in the format of the negotiations.

However, Pashinyan’s Armenia is a work in progress. Continued frustration with Russia, vulnerabilities in the economy exacerbated by the pandemic, and a need to hasten reforms to start delivering on people’s expectations, increase the likelihood that Armenia will, in the not-so-distant future, ask the EU to step up its engagement. Armenia is a small country where EU assistance can make a tangible difference. Engaging with Armenia strategically, ambitiously, flexibly and inclusively is exactly what is needed at the moment and for the immediate future. This will require constant review, and an ability to respond quickly to both challenges and opportunities, whilst moving cautiously but coherently in areas such as visa liberalisation, engagement with the Karabakh conflict settlement process and support for Armenia’s ambitions in the high tech sector.  Increased EU engagement with Armenia will not please Russia, and this reality will have to be factored into consideration to avoid a repeat of the 2013 scenario.

Dr Dennis Sammut is a member of the EPCs Advisory Council and Director of LINKS Europe and Managing Editor of the web portal He is a foreign policy specialist focusing on European security issues, conflict prevention and resolution, and on EU relations with neighbouring countries to the east and the south.

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