When Armenia was preparing to sign an association agreement with the EU in 2013, leading figures in its dairy industry — one of the country’s largest exporters — had high hopes. Armenia’s geography and climate are akin to the Swiss Alps, perfect for making quality milk. And “you need good milk to make good cheese,” said Armen Gigoyan, head of the country’s Cheese Makers Union.

But what Armenia also needed was help modernizing its dairy industry, which was still reliant on old production methods and quality control procedures. A deal with the EU, Gigoyan believed, would have been the answer. “With our natural gifts, then we could have been able to compete in Europe.”

Just before he was due to sign the deal, however, President Serzh Sargsyan announced that he had changed his mind — clearly influenced by Russia — and would instead pursue Eurasian Union membership. And Armenia joined in 2014, just a day after the union was created.

Are you a Eurasianist? Find out about the ideological arm of the EEU.

Armenia’s economic ties with Russia were already close. It exports nearly all its cheese there, for example. So in some ways, Eurasian Union membership has had little economic impact. And some believe that signing the EU deal would have meant a lot more pain than its backers acknowledge, as Armenia complied with tougher European quality-control measures and other codes.

But Sargsyan’s last minute about-turn didn’t give him a chance to follow Kyrgyzstan’s example and make sure Armenia got the best deal. “No one had a chance to bargain, to get advantages for their business,” said Artak Manukyan, president of Armenia’s Small and Medium Enterprises Cooperation Association. “It was a very bad deal.”

What’s more, by opting for the Eurasian Union, Armenia has yoked its fate even more tightly to Russia’s. And still struggling under sanctions and low oil prices, the Russian economy remains more of an anchor than an engine. “Both the [EU deal] and the Eurasian Union would have hurt in the short term,” Manukyan said. “But at least with the EU there was a potential for a positive future.”

President Sargsyan’s last minute about-turn didn’t give him a chance to follow Kyrgyzstan’s example and make sure Armenia got the best deal.



Armenia is in a difficult position. Still locked in conflict with Azerbaijan over Nagorno Karabakh — which it conquered from its neighbour in the 1990s — it relies on Russian military aid to hang on to the disputed territory. And Moscow delivered a timely reminder of its power as the EU deal was being negotiated in 2013, announcing plans to sell billions of dollars worth of arms to Azerbaijan — which quickly prompted Sargsyan’s about face.

The result though is that Armenia is the country least satisfied with Eurasian Union membership, according to survey data from the Eurasian Development Bank, with fewer than half of Armenian respondents viewing it positively.

Armenia has tried to maintain economic ties with Europe, and last year it signed a “Partnership and Cooperation Agreement” with the EU. But it was significantly watered down compared to the deal the government had been on the cusp of signing in 2013, with any clauses on free trade removed in deference to its EEU obligations and Russian concerns.

Russia made clear it would only allow the agreement to go ahead if it did not challenge the supremacy of the EEU deal. And in an interview, Armenia’s chief negotiator Garen Nazarian, admitted that the government had taken an “over-cautious” approach in talks with the EU, jokingly paraphrasing its position as: “We’ll do this with you, unless Russia tells us we don’t like it.”

Some pro-Western parliamentarians have tried to take a harder line, introducing legislation for Armenia to secede from the Eurasian Union. It had no chance of passing, but it did spur a public debate about the merits of membership. And some hope that may help President Sargsyan gain some traction with Moscow, to bargain for a better deal.

Additional reporting by Seda Hergnyan.

Illustration by Aleksandra Krasutskaya.

This piece is produced by Coda Network — a collaboration of independent newsrooms. Its partners include Coda Story, Ukrayinska Pravda, Spektr.Press, Kloop and Hetq.