EUROPEAN PROSPECTS FOR BAKU

Observers note that in recent weeks, relations between Azerbaijan and the European Union have shown a steady trend towards convergence. This is driven by several factors, chief among them being the mutual necessity for one another amid significant shifts in global politics.

In this context, it is particularly telling that in early July, two key figures in Azerbaijan’s foreign policy articulated Baku’s stance on a crucial issue—relations with the EU. First, Elchin Amirbayov, the Representative of the President of the Republic of Azerbaijan for Special Assignments, gave an interview to the Greek publication To Vima, followed shortly by Hikmat Hajiyev, Assistant to the President and Head of the Foreign Policy Affairs Department of the Presidential Administration, who elaborated on Baku’s vision for future dialogue with the EU in a discussion with Slovakia’s Hospodárske noviny. Notably, both high-ranking officials emphasised the resolution of the Armenian-Azerbaijani conflict as a factor unlocking new opportunities for regional development and international integration. At the same time, Azerbaijan has made it clear that sustainable peace requires the removal of legal and ideological obstacles, including aggressive provisions in Armenia’s constitution. Baku has demonstrated its readiness to sign a peace treaty, stressing that the ball is now in the neighbours’ court.

Between Brussels and Moscow

Azerbaijani diplomats have placed special emphasis on energy as the foundation of practical cooperation with the EU. Azerbaijan not only positions itself as a reliable gas supplier but is also constructing a broader architecture of strategic partnership around energy collaboration. Energy ties with Central and Eastern Europe have become a channel for Baku’s foreign policy engagement with Brussels. Meanwhile, Azerbaijan consistently highlights its role in strengthening Europe’s energy security, expecting greater clarity from the EU—particularly in the form of long-term contracts and infrastructure investments.

Against the backdrop of geopolitical turbulence and energy market transformations, Baku insists that shifting from sporadic successes to a stable and systematic model of cooperation with the EU—where Azerbaijan seeks to act not as a peripheral partner but as an independent and proactive player—is a prerequisite for productive dialogue.

Since gaining independence, Azerbaijan’s foreign policy has been characterised by a pursuit of sustainable balance. From initial attempts to forge alliances with various power centres, Baku transitioned to a model of sovereign pragmatism, where flexibility, multi-vector engagement, and strategic autonomy are determined solely by national interests. This approach has allowed Azerbaijan to occupy a significant position at the crossroads of regional interests and to consistently defend its priorities amid global instability.

However, this strategy inevitably leads to overlapping interests with external actors seeking exclusive influence in the region. Over the past decades—especially in recent years—geopolitical rivalry between the two main players, the EU and the Russian Federation, has intensified in the region. In their efforts to strengthen their positions, both Brussels and Moscow have occasionally resorted to methods perceived in Baku as unacceptable, leading to tensions and clashes of interests. At the same time, both the EU and Russia have sought to leverage tensions with each other to position themselves as more reliable and understandable partners for Azerbaijan.

Following the failure of Brussels’ mediation mission in resolving the Armenian-Azerbaijani conflict due to France’s overtly biased stance, relations between Baku and the EU cooled, while cooperation with Moscow grew. The EU’s decision to deploy an observer mission on the Armenian-Azerbaijani border without consulting Baku drew sharp criticism from Azerbaijani leadership. The EU’s apparent one-sided support for Yerevan, particularly on issues related to Garabagh Armenians who left the region under pressure from former separatist authorities, also did little to de-escalate tensions.

Meanwhile, the deterioration of dialogue between Baku and Moscow in the wake of the tragedy involving an Azerbaijani airliner in Russian airspace prompted the EU leadership to intensify efforts to normalise relations with Azerbaijan. Other factors also played a role: changes in Brussels’ political figures responsible for foreign policy, the EU’s growing interest in Central Asia—where Azerbaijan serves as a key transit hub—and broader geopolitical recalibrations.

Europe shifting priorities?

With the onset of Europe’s energy crisis, triggered by reduced Russian gas supplies, Baku began to be viewed in Brussels as a primary partner in ensuring energy security. A memorandum on strategic energy partnership was signed in 2022, but it was only in 2025 that cooperation took tangible shape. This was accompanied by active visits from European officials to Baku and Azerbaijan’s participation in EU sectoral forums.

A turning point came with the official visit of EU High Representative for Foreign Affairs Kaja Kallas to Baku in April, followed by talks between Azerbaijani President Ilham Aliyev and European Commission President Ursula von der Leyen, as well as European Council President António Costa, in Tirana in May. Earlier, Azerbaijan hosted a delegation led by EU Energy Commissioner Dan Jorgensen, who participated in advisory council meetings on the Southern Gas Corridor and green energy.

Political contacts have also intensified. Despite the sensitive nature of Azerbaijani-Armenian relations, Brussels has increasingly made pragmatic statements about the need to acknowledge new regional realities. The EU has begun engaging Azerbaijan in direct dialogue on a mutually beneficial and institutionally sound basis, moving away from previous ideological rhetoric.

Special attention is being paid to the reconstruction of liberated territories. Although official EU funding in this area remains limited, mine clearance and rehabilitation programmes for contaminated lands have drawn notice. Additionally, European companies have shown interest in tenders for infrastructure projects in energy and logistics. In turn, Azerbaijan is keen on advanced European technologies and institutional standards, particularly in implementing its "Smart Village" and "Smart City" concepts.

Azerbaijan itself has played a significant role in reshaping Europe’s approach. By cultivating strong ties with several European countries, including Balkan states and Italy, it has become a valued partner that European leaders are reluctant to alienate over abstract goals. German President Frank-Walter Steinmeier’s visit to Baku earlier this year symbolised growing interest from major European states in cooperation with Azerbaijan. Even France, which has maintained a biased stance towards Baku, has had to adapt to new realities. In June, French Ambassador to Azerbaijan Anne Boillon visited Shusha for the first time as part of a diplomatic corps delegation, despite France’s previous refusal to recognise it as part of Azerbaijan.

Economy as the core of bilateral relations

The economy remains the cornerstone of EU-Azerbaijan relations. Over the past two decades, trade and economic cooperation has become one of Baku’s top foreign economic priorities. The EU is Azerbaijan’s largest trade partner and investor, particularly in energy, infrastructure, agriculture, and finance. The Southern Gas Corridor has cemented Azerbaijan’s role as a key energy supplier and strategic link between the Caspian region and Europe.

Since the 2010s, bilateral trade has grown steadily—from €9-10 billion annually at the start of the decade to over €17 billion in 2022. Exports to the EU, primarily oil and gas, reached around €15.6 billion, while imports of European goods remained at €1.5-2 billion, ensuring a positive trade balance for Baku. The EU also leads in foreign direct investment, accounting for over 50% of all inflows, with the UK (via BP), the Netherlands, Italy, Germany, and France as top investors.

International financial institutions play a key role, notably the EBRD, which has invested over €3.5 billion since the early 2000s, including in renewable energy projects. The European Investment Bank has also been active.

Transport cooperation is gaining prominence. Azerbaijan is central to the development of the Trans-Caspian route, especially after the 2017 launch of the Baku-Tbilisi-Kars railway. Freight and container volumes have grown steadily, reaching record levels in 2024—3.3 million tonnes and 56,500 TEUs, respectively. The BTK railway’s capacity has been increased to 5 million tonnes annually, while upgrades to Baku’s seaport further enhance the country’s role as a transit hub.

Amid sharp EU-Russia confrontation, trade disputes with the US, and growing wariness of China, the South Caucasus and Central Asia have gained strategic importance for Brussels. Total EU trade with these regions exceeded $87 billion in 2024, with Azerbaijan serving as a critical transit route for goods between Central Asia and the South Caucasus.

The evidence leads to a clear conclusion: recent months have seen cautious but steady alignment between Azerbaijan and the EU. Both sides aim to build a strategic partnership on a stable foundation rooted in concrete interests. While the process is far from complete, a qualitative shift in how European institutions perceive Azerbaijan—and Baku’s readiness to deepen cooperation without compromising sovereignty—is already evident.