The Eurasian Union

No. 51–52 17 June 2013 Abkhazia South Ossetia caucasus Adjara analytical digest Nagorno- Karabakh resourcesecurityinstitute.org www.laender-analysen.de www.css.ethz.ch/cad www.crrccenters.org THE SOUTH CAUCASUS BETWEEN THE EU AND THE EURASIAN UNION Special Editor: Iris Kempe ■■ The Eurasian Union and the European Union Redefining their Neighborhood: The Case of the South Caucasus 2 Iris Kempe, Berlin ■■ Is the South Caucasus a Region? 5 Temuri Yakobashvili, Tbilisi ■■ The Eurasian Union: An Experiment in Finding a Place in the New World 8 Fyodor Lukyanov, Moscow ■■ The Eurasian Union: A View from Armenia 11 Richard Giragosian, Yerevan ■■ Considering Accession to the Eurasian Economic Union: For Azerbaijan, Disadvantages Outweigh Advantages 14 Vugar Bayramov, Azerbaijan ■■ Azerbaijan and the Eurasian Union: Costs and Benefits 17 Anar Valiyev, Baku ■■ OPINION POLL Friends and Enemies. How the Population of the Three South Caucasus States Perceives Other Countries 20 ■■ CHRONICLE From 8 May to 24 June 2013 25 Institute for European, Russian, Research Centre Center Caucasus Research German Association for and Eurasian Studies for East European Studies for Security Studies The George Washington Resource Centers East European Studies University of Bremen ETH Zurich University The Caucasus Analytical Digest is supported by: CAUCASUS ANALYTICAL DIGEST No. 51–52, 17 June 2013 2 The Eurasian Union and the European Union Redefining their Neighborhood: The Case of the South Caucasus Iris Kempe, Berlin Abstract The European Union and the Eurasian Union both are having an impact on the future strategic development of Wider Europe. The three states of the South Caucasus are indicating low interest in joining the Eurasian Union, but at the same time it is not clear if the EU is able to offer a strategic alternative. Better defining Russian–EU relations should include a focus on new founding principles for Wider Europe, as well as an end to the current rivalry in the joint neighborhood, supplanted by cooperation and modernization. Solv- ing the current negative perception of the South Caucasus should be seen as a litmus test. The South Caucasus Between Russia and Ukraine, which is suffering from domestic political cri- the EU ses and depends on Russian energy, is seen as the test case 2013 is a crucial year for redefining the European neigh- for conflicts between Russia and the European Union. borhood between Russia and the European Union in Each of the other neighboring countries is challenged general, and because of regional developments for the to position itself in the struggle between the Russian South Caucasus in particular. Since the downfall of the and EU strategic offers. Domestic transformation is Soviet Union and the “big bang” eastern enlargement of the crucial signal about a country’s choice. In this case, the European Union in 2004, the countries that straddle the countries of the South Caucasus have demonstrated East and West between the EU and the Russian Federa- individual success stories but remain political risks. The tion, and that once belonged to the Soviet Union, have Russian–Georgian war in August 2008 showed how far become a strategic challenge for Russia, the EU and the the worst-case scenario can go. countries themselves. Romania and Bulgaria are the lat- The armed conflict of August 2008 was the most est countries to join the European Union, while other aggressive conflict between the Russian and Western pres- countries such as, first and foremost, Ukraine, but also ence in the joint neighborhood. For that reason, Geor- Moldova and Georgia have expressed interest in joining gia, Armenia and Azerbaijan can be seen as another test the EU. The EU, suffering from a financial crisis that has case of cooperation and/or stagnation of the EU’s neigh- become a crisis of integration, has not been able to offer borhood policy, and the Russian-driven Customs Union. more than a European neighborhood policy perspective. The presidential elections in 2013 in all three countries The further development of Wider Europe has depended of the South Caucasus are a further test of how they will very much on the political and economic transforma- develop within Wider Europe. Therefore the current pro- tion in the neighborhood countries. cess of connecting Armenia, Azerbaijan and Georgia with On the other hand, Putin’s Russia considers the European institutions and actors requires more knowl- states of the former Soviet Union, whose collapse Putin edge and background information to come to a differenti- characterized in 2005 as the greatest disaster of the 20th ated assessment. Key questions to debate are whether the century, Russia’s so-called “near abroad.” Since Putin EU will be able to enlarge further or will be able to offer was re-elected to a third term in March 2012, his system its European neighbors an attractive alternative. On the has increasingly engaged in normative rivalry with the other hand, one has to see to what extent the Eurasian EU in the strategically undefined but shared neighbor- Union is an alternative, and, last but not least, which hood.1 While the Commonwealth of Independent States framework of integration offers more opportunities for never had much integration in the sphere of econom- the neighboring countries and what the countries of the ics, the Eurasian Customs Union signed in 2007 and South Caucasus can offer Wider Europe. The following the Eurasian Economic Union, which is to be started sections will analyze the strategies of the different actors. in 2015, represent more of a strategic challenge for the EU in the post-Soviet neighborhood, as well as a stra- Eastern Partnership. More For More, But tegic choice for the neighboring countries. No Way Beyond From the perspective of defining global power, Because of its previous success stories of deepening and 1 ��Rilka Dragneva, Katarzyna Wolzuk: Russia, the Eurasian Cus- enlarging integration, the European Union is the most toms Union and the EU: Cooperation, Stagnation or Rivalry, important actor shaping the European neighborhood. Chatham House briefing paper, August 2012. Deepening European integration often results from devel- CAUCASUS ANALYTICAL DIGEST No. 51–52, 17 June 2013 3 opments in the European neighborhood. The Russian– litical presence to strengthen Russia’s global influence. Georgian war in August 2008 was a strategic wake-up call, Throughout the period, the Russian government has had indicating, in particular, the limits and challenges of the problems accepting the collapse of the Soviet Union and capacities of the EU’s external action. In creating the East- developing a strategy to de-colonize the Soviet empire. ern Partnership (EaP) as a response, for the first time in The first reaction was creating the Commonwealth of European eastern policy-making, an initiative developed Independent States (CIS), which lacks mechanism of under the leadership of a new EU member state (Poland) economic integration and quickly lost momentum and jointly with an old EU member state (Sweden), and in common tasks. Based on the negative CIS experience, December 2008 the European Commission adopted their Russia, Kazakhstan and Belarus have continued to work plan. Furthermore, the EaP differs from previous initia- on integration projects mostly based on the EU and on tives, such as the European Neighborhood Policy, Euro- a customs union. In 2000, when Putin took over politi- pean Neighborhood Plus, and the Eastern Dimension by cal power, he initiated the Eurasian Economic Commu- concentrating exclusively on the eastern neighbors. The nity. Despite the development of an institutional regime, six EaP countries—Armenia, Azerbaijan, Belarus, Geor- old problems persisted. The legal framework remained gia, Moldova and Ukraine—are trying to overcome the fragmented, mostly based on bilateral agreements with threefold challenges of a political and economic transi- Russia. It was no wonder that none of the South Cau- tion and at the same time create a nation state. The east- casian countries joined the integration projects. With ern neighbors are also dedicated to joining the EU. Alto- Putin gaining power, this development has been con- gether this is a process requiring the interest and input of tinuing. In July 2012 the Eurasian Economic Commis- a broad spectrum of actors. At the same time, the Euro- sion (EEC) replaced the Eurasian Economic Commu- pean institutions have to propose new options of coopera- nity.2 In comparison with its predecessor, the Eurasian tion, but are unable to offer the gold medal of membership. Economic Commission became more powerful based The EaP summit that takes place every second year on common customs tariffs, a common customs code assesses the current situation as well as providing future and a joint commission that has so far ratified 850 acts. benchmarks. The founding summit took place during However, economic cooperation within the Eurasian the Czech presidency in 2009 in Prague, followed by the Economic Commission and joining the WTO became a Polish summit in 2011, and the upcoming Lithuanian contradiction of integration interests, though ultimately summit in November 2013, which will be in Vilnius. Russia decided in favor of joining the WTO. After its founding, the EaP has been caught up by Overall, the two integration scenarios, the EU and shortcomings of transition in the neighboring countries. the EEC expressed regional and global interests. Since The European Commission viewed Ukraine and later Russia did ultimately join the WTO, the contradiction Moldova as the European frontrunners, but both coun- was solved in favor of Russia having to fulfill WTO tries have been suffering from domestic crises and unable regulations. If the previous post-Soviet regional intu- to meet European standards. Reacting to regional devel- itions were asymmetric, allowing Russia to use its supe- opments, the Commission decided to run EaP on the rior bargaining power, the ECU is the first step toward principles of “more for more.” Even if joining the Union supranationalism.

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