Image: consilium.europa.eu

Over the past few decades, the European Union has avoided efforts to mediate the Karabakh dispute between Armenia and Azerbaijan. Achieving the settlement of this conflict was conspicuously missing from the EU’s Eastern Partnership (EaP) agenda. From the inception of EaP in 2009 to the onset of the 44-Day War in 2020, the EU was reluctant to engage in the Karabakh settlement. Instead, they deferred the key mediation role to the OSCE – through its Minsk Group trio of American, French, and Russian co-chairs – which since 1997 played a leading mediating role. Until the Second Karabakh War of 2020, the EU’s level of engagement in conflict management was passive and limited to providing support for peacebuilding projects in both societies.

All this changed after 2020 when a second war broke out between Armenia and Azerbaijan, resulting in the defeat of Armenia and Azerbaijan’s reclaiming its previously occupied territories. The November 10, 2020 Ceasefire brokered by Russia’s president, Vladimir Putin, ended hostilities, and Moscow inserted its peacekeeping troops in the areas remaining outside Baku’s control. Although Russia has maintained its strong role in negotiations (not least by facilitating meetings of the border delimitation commission), since around 2021, the EU has stepped up its mediating role too. Amidst the war in Ukraine, the EU senses that, if left abandoned, the South Caucasus may fall prey to Moscow’s imperial ambitions.

Russia vs. the EU?

Russia may exploit loopholes in the 2020 Trilateral Statement as a means of keeping its leverage over both Azerbaijan and Armenia. It seems Russia is not interested in a final resolution of the conflict and prefers to manipulate the conflict to its own advantage. This creates an urgency to balance Russian power with the collective “West” - one of the key reasons Baku and Yerevan have both been eager to participate in the EU-led negotiations in Brussels. In its turn, Russia appears to view Western-led mediation efforts of peace with suspicion, if not with outright displeasure.

Despite conflicting interpretations, some Azerbaijani experts view Moscow’s and Brussels’ mediation roles as complementary rather than contradictory and mutually exclusive. Moscow may criticize the EU’s alleged “encroachment” in Karabakh peace negotiations, but so far, it has not impeded the implementation of agreements reached by the sides within EU-mediated talks.

Motivations for EU Involvement

The European Union, naturally, also stands to benefit from the resolution of this long-standing dispute in two important ways. First, once the conflict is resolved and borders between the two countries open, the EU will gain a much more accessible, secure, and faster transit corridor to link to China via the Caucasus and Central Asia. Unblocking the regional transit routes will create an impetus for the economies along the transit route to benefit from trade between China and the EU. Cooperation on energy and connectivity projects can contribute to economic interdependence among the three economies in South Caucasus and between the region and the EU. Additionally, once the relationships between Armenia and Turkey are normalized, Armenia can become part of the Trans-Caspian International Transport Route (TITR, or the Middle Corridor) -- a rail freight corridor linking China and the EU through Central Asia, the Caucasus, Turkey, and Eastern Europe.

The EU remains Azerbaijan’s largest trading partner accounting for some 51% of the country’s exports and 16% share of imports. In 2021, Azerbaijan exported 11.7 billion euros of goods (mainly fossil fuels) to EU markets. In contrast, Armenia is mainly importing goods from the EU. In 2021, Armenia exported 753 million euros of products to EU countries.

Source: Eurostat Comext Azerbaijan/Armenia

Second, Azerbaijan is an important source of alternative energy supplies to Europe. The broader South Caucasus region is a crucial transportation route for gas and oil from Azerbaijan into Turkey and European markets. Baku returns to the EU energy security agenda as European countries seek to reduce dependence on Russian oil and gas increasing the role of the Southern Gas Corridor and Baku-Tbilisi-Ceyhan pipeline. In November 2020, Azerbaijan started commercial gas supplies to Europe via the Trans-Adriatic Pipeline (TAP). TAP currently operates at 80% of its capacity, and Azerbaijan is expected to deliver 12 billion cubic meters (bcm) to Europe this year. The ceremony of signing the EU-Azerbaijan memorandum in Baku was a historic milestone. According to a new deal, the EU will double Azeri gas imports to 20 bcm annually by 2027. 

On a broader geopolitical level, the South Caucasus region has traditionally been considered part of the “zone of Russian influence” and peripheral to EU interests. The war in Ukraine has raised the significance of the South Caucasus to the EU – and especially Azerbaijan’s gas reserves -- to a more consequential level considering Russia’s use of energy as a bargaining tool against European countries.

Against this backdrop, the rise of the EU as a proactive mediator has been a remarkable and significant new development. The EU platform gives both Armenia and Azerbaijan a degree of maneuverability against Russia. In Brussels, the negotiating sides take advantage of the benefits of a more impartial third-party mediator with a degree of credibility and trust. It also allows the breakup of Russia’s monopoly on mediation. It remains to be seen if these efforts by the EU can be sustained in light of Russia’s undisguised contempt of Brussels’ engagement. Nevertheless, there is hope that the EU’s involvement will have a positive influence on the region and resolution of the issues between Azerbaijan and Armenia.

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