Armenia-European Union relations have entered a new and dynamic phase in their shared history, marked by unprecedented momentum across political dialogue, economic cooperation and security-related initiatives. A key milestone in this process was European Commission President Ursula von der Leyen’s recent visit to Yerevan, during which new economic initiatives were announced and the EU reaffirmed its political commitment to expanding cooperation with Armenia. What geopolitical considerations underpin the deepening ties between Yerevan and Brussels? To what extent can the European Union become Armenia’s strategic partner? How might Armenia’s growing engagement with Europe affect the balance of power in the South Caucasus? And are the EU’s recently announced economic packages capable of bringing about meaningful changes to Armenia’s economy? In an interview with Armenpress, Péter Kránitz, Senior Research Fellow at the Hungarian Institute of International Affairs and an expert in international relations, shared his views on these and other issues.

-In your opinion, what is driving the current unprecedented intensification of Armenia-EU relations and the deepening of cooperation? How would you assess the current state of these relations? 

-Europe is undergoing a transformation. The establishment of the European Political Community in 2022 was an attempt to lay the foundations for a new European geopolitical space — the so-called “Wider Europe.” It is a project similar to what the Eastern Partnership was originally intended to be: the Europeanisation of Europe’s neighbourhood, with particular attention to the post-Soviet region. Although the Eastern Partnership continues to function at the micro level, its broader geopolitical ambitions have largely come to an end. Belarus has become isolated from Europe, Azerbaijan is moving away from political coordination with the European Union, Ukraine and Moldova are advancing towards EU membership, and EU-Georgia relations have reached an impasse. The European Union is now seeking to build a more cohesive political space that excludes Russia and Belarus, with Armenia emerging as a central pillar of this project. Across Europe, Armenia is increasingly viewed as a swing state between Russia and the West, where every trade agreement and every investment can be seen as a small European victory in a broader geopolitical competition. For Armenians, however, cooperation with Europe should not be viewed as a civilisational choice, nor should Armenia-EU relations be regarded as political alignment or an alliance. Although Armenia, the world’s first Christian state, will always remain part of the European cultural sphere, geography and geopolitics are not governed by symbolism. Soft power will never outweigh hard power, and the European Union is not in a position to provide Armenia with meaningful security guarantees — whether economic, energy-related or military. Instead, Armenia-EU relations should be understood as a tool for diversification and strategic hedging in an unstable security environment. Ultimately, Azerbaijan, Türkiye, Iran, Georgia and Russia will remain Armenia’s neighbours and its most important economic and political partners. Armenia’s relationship with the European Union should therefore be approached with that reality in mind.

-European Commission President Ursula von der Leyen visited Azerbaijan and Armenia on July 2. To what extent was her visit symbolic, and to what extent did it have practical significance? What could it bring to bilateral relations?

-Ursula von der Leyen’s visit to Armenia and Azerbaijan was symbolic on several levels. It came at a particularly significant moment for regional peace and development, following Armenia’s historic parliamentary elections and at a time that could prove to be a turning point in the Armenia-Azerbaijan peace process. The visit sought to reaffirm the European Union’s role as an indispensable actor in the South Caucasus and to reinforce its assumed place at the region’s geopolitical table. The visit also conveyed an important message about the evolving balance of power within the EU’s institutional architecture. Von der Leyen travelled to Yerevan with Commissioner for Enlargement Marta Kos, while High Representative for Foreign Affairs and Security Policy Kaja Kallas and President of the European Council António Costa remained in Brussels. The timing was particularly noteworthy, coming only days after reports emerged of a possible overhaul of the EU’s diplomatic service that could reduce the High Representative’s foreign policy responsibilities and further strengthen the role of the President of the European Commission. In practical terms, however, the visit delivered considerably less than its symbolism suggested. The proposed Autonomous Trade Measures are expected to liberalise approximately 80% of Armenian exports to the European Union, but they do little to address the most significant challenges facing Armenian exporters, including high transport costs, limited logistical connectivity, regulatory compliance requirements and administrative burdens. Moreover, the package must still go through the European Union’s lengthy legislative and administrative approval process before it can enter into force. While it represents a modest step towards closer EU-Armenia trade relations, it cannot realistically replace Armenia’s existing export markets in the short or medium term. Similarly, the announced €20 million “Peace Dividend” package, intended to support demining, healthcare and local businesses, amounts to approximately AMD 8.3 billion. Spread across three sectors with substantial financing needs, the package is unlikely to have more than a fragmented practical impact.

-In your opinion, how could Armenia’s growing engagement with Europe affect the balance of power in the South Caucasus? 

-Meetings of this kind carry considerable strategic value for Armenia. They underscore Yerevan’s growing international relevance, highlight the diversification of its foreign partnerships, and increase the political costs for external actors seeking to influence Armenia’s domestic or foreign policy. At the same time, the visit serves the European Union’s own strategic objectives by demonstrating that it remains a politically relevant actor in its neighbourhood, particularly in a region that is becoming increasingly important for Europe’s energy security and connectivity. Armenia is sovereign in choosing its political and economic partners. Yet sovereignty alone does not guarantee that every strategic choice will necessarily prove beneficial. Other regional powers also pursue their own national interests. Russia and Iran—Armenia’s principal energy suppliers and two of its most important economic partners—have both openly expressed concern over Yerevan’s accelerating rapprochement with the European Union. As long as Armenia-EU cooperation remains within its current parameters, Yerevan is likely to preserve its ability to balance relations between Brussels and its traditional partners. A deeper strategic realignment, however, could increase tensions with Russia, which remains Armenia’s largest trading partner, while further complicating relations with Iran, a country that is both a critical transit route and an indispensable energy supplier at a pivotal geopolitical moment following a devastating war. Managing these competing relationships will require exceptionally careful diplomacy. Armenia has long demonstrated an ability to balance competing geopolitical centres, but maintaining that equilibrium will become increasingly difficult as competition among the major powers intensifies. In this context, the Armenian government could also benefit from closer cooperation with the Armenian diaspora, whose political influence, business networks and advocacy capabilities can complement official diplomacy and help advance Armenia’s foreign policy objectives abroad.

-To what extent can the economic support packages and trade preferences announced by the European Union transform Armenia’s economic opportunities? 

-European markets offer significantly higher price levels, creating attractive opportunities for Armenian exporters. However, as long as high transport costs, limited logistical connectivity and substantial administrative burdens persist, the European Union is unlikely to become a viable alternative to Eurasian markets for Armenia’s traditional export products, particularly metals and alcoholic beverages. Instead, Armenia’s comparative advantage in the European market lies in sectors where geography plays a less decisive role. The country should therefore prioritise expanding exports of high-value services and knowledge-intensive industries, including information technology, artificial intelligence, business process outsourcing and shared service centres. Armenia’s well-educated workforce, strong STEM tradition, multilingual talent pool and comparatively competitive labour costs provide a solid foundation for the country to develop into a regional hub for European service industries and digital innovation.