Recent Events in Washington, DC

EU-South Caucasus: Strategic Relationship or Strategic Failure?

Atlantic Council of the United States
Senior Fellows Program
January 27, 2006

Borut Grgic
Director, Institute for Strategic Studies, Ljubljana

The conference focused on the question of the geopolitical importance of the South Caucasus to the European Union. Mr. Borut Grgic began his presentation by noting two main factors that make the South Caucasus important to the EU – energy sources and EU’s geostrategic interests in the region. Some South Caucasian countries, such as Azerbaijan are rich in oil and gas, while others, Georgia and Armenia can serve as effective transit routes for Russian and Central Asian energy to the EU, namely, gas. With the increased energy consumption and dependence on imports, the EU could engage the countries of the South Caucasus to import the CIS energy. The South Caucasus also provides access to Central Asia, which is important to the EU in order to push reforms and check the influence from neighboring Russia, China and Iran (and possibly India) on the region.

EU’s relationship with the South Caucasus has been weak due to two reasons. First, the EU’s internal crisis over the constitution and lack of leadership are impacting its longer-term vision over the South Caucasus. This situation sets back the relations with Armenia, Azerbaijan and Georgia and gives an upper hand to Russian influence. Second, because the bureaucracy in Brussels drives the EU’s relationship with the South Caucasus, it is quite insensitive to the day-to-day problems of the region. Therefore, certain venues of reforms and bilateral relations are not pursued, while Russia is able to take advantage of the situation and fill the vacuum. For example, Russia is more actively getting involved in the resolution of the Nagorno-Karabakh problem since the EU is staying out of it. Because of this complexity, the EU’s influence on the region is weakening.

There are plenty of champions within the EU making the South Caucasus a priority but no significant progress is visible because of lingering bureaucratic stagnation. Without changing its political stance to the South Caucasus, the EU would not be able to maximize its influence on the region and will miss its opportunity to other regional players. EU needs to provide more political commitment to the region, which means stop treating it as a Brussels issue and start thinking of the future accession plans of Armenia, Georgia and Azerbaijan. EU should also provide more commitment to reforms. These actions will be timely when the EU is increasingly dependent on energy imports and is seeing the rising powers of other Eurasian players that may increase their leverage both on the South Caucasus and Central Asia.