Does EU-Armenia Agreement Threaten Gazprom?

Thanks to Konrad Adenauer Foundation, the Armenian community has learned that the EU-Armenia framework agreement envisages serous economic privileges some of which may become effective in January. One can only guess why they did not speak about the privileges about the signing of the agreement.

Presenting the advantages of the agreement, the first deputy minister of economic development and investments Garegin Melkonyan stated that all the regulations will be harmonized with the requirements of World Trade Organization. It is not clear how it will be made in line with the new EEU Customs Code which, according to experts, contradicts to WTO norms.

Nevertheless, after signing the agreement Iranian businessmen arrived in Armenia with their foreign minister Zarif, the representatives of EBRD and EIB who announced likely to invest in Armenia, the management of China Construction which ranks 24 among the world’s top 500 companies.

Were they waiting for the signing of the EU-Armenia agreement and what changes were expected of Armenia. What was that the government could not do before the signing and what is it ready to do now? Is it realistic to expect principal changes in the investment and economic policy of Armenia?

Is the current government of Armenia working in an interim mode? In a few months Armenia will shift to parliamentary governance, and the government will be changed. Will this lead to change in policy?

If the current regime remains in government, hardly it will. The EU agreement will be another document signed for the sake of image.

The economic system is based on the oligarchy which is linked to Gazprom with lots of chords. The economy has been divided “fairly” between a few dozens of oligarchs who float thanks to privileges and connections with Gazprom.

The EU-Armenia agreement contains a clause on the need for diversification of energy sources to foster competition and fight against monopolies. But will the hands of the Armenian regime reach Gazprom’s monopoly? Most importantly, is there likelihood of cutting the branch they are sitting on?

Immediately after signing the agreement the Iranian delegation came to Armenia which, according to the Armenia media, have offered cheaper gas than Russia.

However, the spokesperson for the Ministry of Energy and Natural Resources Vasak Tarposhyan said currently the Iranian gas is more expensive than the Russian gas. He said the Armenian side has not received an official offer from Iran on more competitive prices.

What will the Ministry of Energy do if Iran offers a better price and transit to Georgia.