Von der Leyen pledges investments, EU trade liberalization during visits to Baku, Yerevan

By Nicholas Castillo

On July 2, European Commission President Ursula von der Leyen and European Commissioner for Enlargement Marta Kos touched down in Yerevan for the second leg of a two-day South Caucasus trip to both Azerbaijan and Armenia.

In Yerevan, von der Leyen held talks with Armenian Prime Minister Nikol Pashinyan, followed by a press conference with the two leaders.

Alongside other comments, von der Leyen announced a series of new measures aimed at supporting Armenia as the country faces numerous trade restrictions imposed on Yerevan by the Kremlin. 

“Armenia is still facing significant economic pressure from Russia,” von der Leyen stated. "Nothing short of economic coercion.”

“You will soon receive an additional 18 million euros to help strengthen and diversify your trade,” she announced. 

“Autonomous trade measures will liberalize almost 80% of Armenian exports to the European Union… This means 80% of your trade with us will now be tariff-free.”

“This measure will open the European doors for almost 99% of Armenia’s fresh fruit, vegetables, and plants that used to be exported to Russia. And it will open the door to more than 90% of your exports of beverages and spirits.”

“This is only the beginning,” von der Leyen said.

“In mid July we will deploy experts to Armenia to work directly with your businesses and your exporters and help them seize all the opportunities that a privileged partnership with the European Union can offer.”

Von der Leyen later stated EU experts would also arrive in Yerevan to offer experience sharing related to energy diversification. 

Previous weeks have seen similar announcements of EU aid for Armenia’s agricultural sector. In early June, the European Union announced it was preparing an assistance package of €50 million for sectors affected by Russian trade restrictions. 

Both von der Leyen and Kos had been in Baku on July 1 for talks with Azerbaijani officials. 

Following a meeting with Azerbaijani President Ilham Aliyev, von der Leyen delivered a set of public comments outlining Brussels’ priorities for the South Caucasus going forward. 

“Through our Global Gateway Investment Programme, we will invest up to €200 million in grants for transport, energy and digital links across the South Caucasus with the potential to mobilise up to EUR 2 billion in public and private investment,” von der Leyen stated, specifically mentioning the possibility of EU investments into the port of Baku and “the railway connection through Nakhchivan.”

Additionally, the Commission President announced that the EU would provide €20 million for what she described as “peace-fostering” programs. Von der Leyen offered the procurement of ambulances, demining, and water management as examples of what the funds may be directed toward.

As for energy, von der Leyen reiterated the EU’s position that Azerbaijan had become a “reliable trusted energy partner for Europe.” She additionally stated that the EU would “very much welcome [Baku’s] suggestion of an electricity cable to Armenia.”

The latest trip to the Caucasus marks the second in the last three months for top European Union policy makers. In May, von der Leyen, EU Council President Antonio Costa, and top EU diplomat Kaja Kallas all took part in the European Political Community summit in Yerevan, while Kallas then went onward to Baku for talks with Aliyev.

Recent years have seen the South Caucasus rise in significance for the European Union’s economic and geopolitical outlook. In June, EU officials announced a new coordination platform and €2 billion in investment plans targeted toward Middle Corridor development, the global transit route that links Europe to China through the Caucasus and Central Asia. 

European leaders also offered Pashinyan public support in the run-up to June 7’s parliamentary elections in Armenia, thereafter congratulating the Prime Minister on his election victory.