THE EU AIMS AT THE SOUTH CAUCASUS

President of the European Council Herman Van Rompuy visited Azerbaijan as part of his diplomatic tour of the South Caucasus. Before Baku, he visited Armenia and Georgia. It was the first visit to the region by the EU president. In a sense, it symbolized the growing interest of the European Union in the South Caucasus. Last year Azerbaijan was visited by European Commission President Manuel Barroso, and in April of this year, all three South Caucasian republics were visited by the EU High Commissioner for Foreign and Security Policy Catherine Ashton.

These republics of the South Caucasus, included in the EU's Eastern Partnership programme, are engaged in negotiations and preparatory work to conclude three important agreements with Brussels: on association, on comprehensive and deep free trade, visa facilitation and readmission. There is the Parliamentary Assembly of the European Union and the Eastern Partnership countries - EURONEST, the first plenary meeting of which was held this spring in Baku. There is also the European Civic Forum of non-governmental organizations. The countries of the region are actively participating in European educational and cultural programmes. Azerbaijan and Georgia are important partners of the EU in major energy, transport and communication projects.

Meanwhile, President of the European Council Herman Van Rompuy came to the region mainly due to political circumstances. In the context of the situation around Iran's nuclear programme and growing pressure on the South Caucasus from Russia, Brussels makes it clear that it will not remain indifferent to the Kremlin's plans to restore its former dominance here through force and threats. Earlier, a similar signal to the Kremlin was sent by Washington during the recent visit to the region by Secretary of State Hillary Clinton.

As for Van Rompuy's visit to Azerbaijan, after the official welcoming ceremony, he had a conversation with President Ilham Aliyev - first one on one, and then in an expanded format. At the end of the meeting, statements were made to the media. "Azerbaijan is a secular state, and the EU appreciates the local attitude towards religious values and tolerance. Europe needs a quiet Azerbaijan based on democratic values," the president of the EU Council told the press. Herman Van Rompuy stressed three points: the need for further development and deepening of relations between the EU and Azerbaijan, as well as the implementation of the Southern Corridor and Trans-Caspian pipeline projects.

He welcomed the recent agreement between Turkey and Azerbaijan on the Trans-Anatolian pipeline and noted that the EU sees Azerbaijan as an important partner in the energy sector. Furthermore, the president of the European Union said that it is necessary to intensify the negotiations on a new association agreement, including on trade and investment.

With regard to the Karabakh conflict, Van Rompuy said: "To find the solution that we need, we must build trust and respect. I said the same thing in Yerevan. It is with deep concern that we receive reports of serious armed incidents on the border between Armenia and Azerbaijan and on the contact line, and I deeply regret the loss of life. The conflict will not be resolved by military force. Only a peaceful settlement through negotiations could allow the region to change the status quo towards a secure and prosperous future. Azerbaijan and Armenia should take action to achieve a lasting and peaceful settlement based on the Madrid principles."

Van Rompuy stressed that the EU will "continue to ask for access to Nagornyy Karabakh and the border areas for its representatives".

The president of Azerbaijan said in his speech that the country's relations with European institutions cover economic cooperation, energy security and other sectors. "Our relations with the EU are very strong and mutually beneficial. We are the first country to put forward the initiative to dispatch the hydrocarbon resources of the Caspian Sea to the European market. Our country will continue to be actively involved in ensuring the energy security of European allies. Azerbaijani gas is a new source for Europe and the world, and these projects cover the coming decades or even centuries," he said.

Speaking at a ceremony to award him the title of honorary doctor at the University of Foreign Languages, Van Rompuy called for the broad participation of Azerbaijan's civil institutions in the process of democratic development and expansion of relations between Azerbaijan and the EU.

If we compare the content of the speeches by the president of the European Union in the regional countries, we can see some nuances. For example, he named Georgia as an example for others in terms of reform and commitment to European integration. He confirmed the position of the European Union, which consists in resolving the Abkhaz and South Ossetian conflicts on the basis of the territorial integrity of Georgia, but he called for dialogue and normalization of Tbilisi's relations with Russia.

Herman Van Rompuy also praised Armenia for progress in the development of democracy and civil society, but noted that the authorities have much to do. He said that the formula of Brussels' relations with member countries of the Eastern Partnership programme is universal: "Great assistance for great reform." However, the amount of 15 million euros in additional aid to Armenia caused a deep disappointment. They hoped that Brussels would organize a donor conference and allocate soft loans amounting to 1.5 billion euros for 3 years, but in reality they got a thousand times less.

And this is against the backdrop of the deteriorating financial and economic situation in Armenia. Russian gas is expected to rise in price from the current extremely favourable $ 180 per thousand cubic metres to $ 260 by 1 October and $ 320 by 1 January 2013. At the same time, Armenia's payments for the previously obtained loans will reach $ 400 million. The media wrote that the Armenian authorities are conducting unofficial negotiations with the Russian government for a loan of $ 800 million to $ 1 billion at a fairly high, variable interest rate. Without this money, the government is not able to fulfill social obligations and avoid increasing the already high utility tariffs. That is to say Serzh Sargsyan is facing big problems in the upcoming presidential election expected in February 2013.

Although the European Union, represented by its president, did not directly link the allocation of substantial credits and assistance to Armenia to readiness for compromises in the settlement of the Karabakh conflict, they made it clear to Yerevan that without progress in the talks they should not expect them. If the US and Russia behave in a similar way, perhaps, Armenian politicians and the population will consider the reality more closely and realize the illusory nature of their territorial claims against neighbours, particularly Azerbaijan.

In contrast to Armenia, we do not need financial handouts. Azerbaijan's own foreign exchange reserves have reached $ 44 billion, while the consolidated budget is an impressive sum of $ 25 billion. The few tens of millions of euros that the EU allocates to each country of the region do not make any difference to Baku. An impetus to deepening relations between Azerbaijan and the EU could be political support for the withdrawal of the Armenian forces from the occupied territories and the promotion of the Karabakh settlement. So far, this is not being felt. It stems at least from the extremely streamlined wording that Herman Van Rompuy used in Baku. He said: "I welcome the territorial integrity of Azerbaijan in the resolution of the Nagornyy Karabakh conflict." This phrase may even go down in the annals of diplomatic word juggling, but Brussels' actions are more important than its words. It is precisely on the basis of Brussels' actions that Azerbaijan will build its relations with the European Union and undertake and implement reciprocal obligations.