Armenian Prime Minister Nikol Pashinyan has signalled plans to seek European Union (EU) membership. Though framed as an attempt to diversify away from decades of dependency on Russia, Moscow instead sees it as a western attempt to simply oust it from the region. Such a move is supported by some in Armenia amid disillusionment with Russia and the Collective Security Treaty Organisation (CSTO) following the 2020 war with Azerbaijan and a 2022 incursion into Armenia itself.
Nonetheless, diversification is long overdue in the country though it hardly had any choice. Only in the area of security has Yerevan found itself desperate to seek alternative partners given Russia's beleaguered situation in Ukraine. It has always been Armenia’s geography that obstructs diversification in general, especially economically, but also in terms of security. Indian weapons are presumably transported through Iran.
Landlocked, blockaded, and still reliant on Georgia and Iran for physical overland access to the outside world, the EU market is largely off limits even if local producers could meet its strict standards or compete in a crowded marketplace. Even Georgia, which has had an EU Association Agreement in place since 2014, has hardly managed to make headway despite access to the Black Sea and open borders with all its neighbours, including Turkiye.
Indeed, in 2023, Georgian exports to the EU stood at just €0.8 billion. That same year, Armenia exported roughly the same thanks to its Comprehensive and Enhanced Partnership Agreement (CEPA) signed in 2017. Since Ukraine, however, exports for both to the EU have declined. This is especially true for Armenia which is instead currently benefiting from the re-export of goods to and from Russia. That has proven nothing short of an economic miracle for the cash-strapped nation.
If overall trade between Armenia and Russia stood at $2.5 billion in 2022, it reached $12 billion at the end of 2024. Moreover, Russia accounted for 42 percent of Armenia's trade in 2023, with the EU at just 7.3 percent. Energy imports, particularly gas, and fuel for the country’s sole nuclear reactor also come from Russia. Armenia’s membership in the Eurasian Economic Union (EAEU) complicates matters as Yerevan cannot be full members of both.
Russian officials have already warned that such a move could lead to higher gas prices, increased costs for imports, and greater unemployment. Some Armenian lawmakers from Pashinyan's Civil Contract faction have dismissed these fears but others have not. Recently, former Kocharyan-era oligarch Gagik Tsarukyan, aka Dodi Gago, also rang alarm bells about potential economic hardship. A former U.S. ambassador also recently advised Armenians to be prepared for harsh winters.
The potential political fallout related from any socio-economic collapse was also flagged by the country’s new Foreign Intelligence Service in its annual report published last week that warned of external actors exploiting economic and energy dependencies to destabilise the country. It also confirmed that there had already been an alleged attempt at staging a coup last year.
Despite the risks, on 9 January, the government ostensibly moved closer to holding a referendum on potential EU membership following a petition collected by a group of extra-parliamentary forces believed close to the government. Although it garnered only 60,000 signatures, just over two percent of the overall electorate, parliament last week accepted a resulting bill that it will discuss next month. However, there is not yet any commitment as to when any EU referendum might be held.
Some critics claim that this would bolster the ruling Civil Contract and aligned political forces in parliamentary elections scheduled for mid-2026 at the latest. This, they claim, would also allow extra-parliamentary political forces to take on the traditional parliamentary opposition, helping the government maintain control over any new parliament. It is also possible that such a referendum could take place alongside or even as part of a much larger problematic one on the constitution.
Regardless, in lieu of a peace agreement, support from the EU for Pashinyan, whose ratings have been in decline, could help ensure victory. The same is true if support comes from the United States as well. Earlier this month, Yerevan signed a historic Strategic Partnership Commission Charter with Washington D.C.. This institutionalised framework for cooperation between the two countries is also important in terms of diversification in the area of nuclear energy.
But diversification should not be mistaken for replacing Russian hegemony for that from the West. In the midst of this web of geopolitical interests, Pashinyan noted at last week’s World Economic Forum (WEF) in Davos that equilibrium in Armenia’s foreign relations is vital for both national and regional stability. “Deviation from balance can have very serious consequences,” he warned, while also acknowledging that Armenia's economic future depends on normalising relations with neighbours Azerbaijan and Turkey and deepening those with Iran and Georgia.
No EU referendum or US strategic document can change that on their own.
