The EU’s Unexpected Ideal Neighbour? The Perplexing Case of Armenia’s Europeanisation

Laure Delcour & Kataryna Wolczuk. Journal of European Integration. Volume 37, Issue 4. 2015.

The question of why some countries adopt external policy is particularly salient with regard to Armenia. All indicators suggest that Armenia would be unlikely to respond to EU stimuli for reform. And yet, in the early 2010s, Armenia vigorously adopted EU policy and institutional templates. This article seeks to explain this conundrum by exploring how EU policies (especially under the Eastern Partnership) feed into the domestic context and meet the agenda of national elites. The article deliberately departs from the mainstream explanations of ‘Europeanisation beyond accession’ and argues that closer scrutiny of the domestic context is a sine qua non for making sense of the baffling discrepancies in neighbouring states’ responses to EU policies. The case of Armenia vividly demonstrates the imperative for re-assessing the approaches that have so far focused on EU-level factors and for bringing together EU variables with a detailed analysis of the domestic and regional contexts.

Introduction

The question of why some countries adopt external policy templates has long been of interest to academics. Because it encompasses and connects multiple levels of governance, the European Union (EU) is a stimulating field to study the interaction between external influences and domestic factors. After the last waves of EU enlargement, attention shifted to cases with regard to which membership of the EU is precluded and where the adoption of EU policy templates is voluntary and not linked to preparations for membership. The challenge, therefore, is to understand the rationale behind countries’ interest in and adoption of EU rules when accession is not the end goal.

This article selects the case of Armenia to test the main explanations provided by the literature on Europeanisation beyond enlargement. Based upon the variables identified in the literature (Börzel and Risse 2012; Dimitrova and Dragneva 2009; Lavenex and Schimmelfennig 2009), EU efforts at promoting domestic change would not be expected to be effective in Armenia, as apparently confirmed by the country’s accession to the Russian-led Eurasian Economic Union in 2014. Yet, perplexingly, Armenia had over the period of several years vigorously adopted EU policy and institutional templates.

This article explains this conundrum by exploring how EU policies (especially under the Eastern Partnership) feed into the domestic and regional contexts and meet the agenda of national elites. In doing so, we encounter the limitations of the existing approaches to Europeanisation beyond enlargement, which focus heavily on EU-level factors. As a result, the literature on non-accession Europeanisation has reduced the role of domestic factors to mere intervening variables, which tend to be very broad (e.g. (non-)democratic regimes and dependency). This is because scholars have primarily (even though not exclusively) focused on the conditions under which the EU successfully exports its regulatory and institutional templates, leaving aside the conditions under which third countries decide to adopt them.

Therefore, we argue that together with an examination of EU mechanisms, closer scrutiny of the domestic context is a sine qua non for making sense of the baffling discrepancies in neighbouring states’ responses to EU policies. We demonstrate with the case of Armenia that it is an interaction between EU, domestic and regional factors which explains both the country’s receptivity to EU templates in 2010-2013 as well as Armenia’s decision to join the Eurasian Economic Union.

We argue that the Armenian leadership decided to adopt EU rules and templates after a cost-benefit analysis of the EU’s offer against the country’s specific regional, political and economic context. We identify three interwoven factors that explain Armenian authorities’ choice to align with EU policies: first, a stronger domestic demand for reform templates; second, the perceived legitimacy of the EU’s offer and, third, the perceived compatibility of EU templates for reforms with Armenia’s security reliance on the Russian Federation. We argue that these factors cannot be analysed in isolation as the EU’s stronger engagement in Armenia coincided with domestic demand against the (temporary) lack of counter-conditionality from Russia.

The article consists of four parts. In the first section, we apply to Armenia the variables identified in the literature purporting to explain the EU’s influence on domestic change in the eastern neighbourhood. We deduce that theoretically speaking Armenia should not be responsive to the EU’s attempts to transfer its norms, rules and policies. We demonstrate in the second section that, on the contrary, Armenia is actually receptive to EU influences and shows that it has used the acquis as a template for modernisation, albeit unevenly. We then interrogate the incongruence between theory and empirical observations by drawing attention to key explanatory factors, i.e. Armenia’s authorities growing sense of urgency with regard to reforms, their positive assessment of the EU’s offer for modernisation under the Eastern Partnership and the perceived complementarity of EU templates for reform with the country’s security alliances. Finally, we conclude by drawing theoretical insights from the empirical findings.

Current Research on Europeanisation Beyond Enlargement: External Stimuli, Domestic Factors and Policy Change Applied to Armenia

The question of whether the EU can successfully transfer its policies and templates outside the context of enlargement has attracted considerable scholarly attention. According to the external governance approach—a major analytical perspective on non-accession Europeanisation—the effectiveness of rule transfer (or lack thereof) is primarily explained by existing EU institutions, which ‘provide the template for the externalisation of EU policies, rules and modes of governance’ (Lavenex and Schimmelfennig 2009, 802). Lavenex and Schimmelfennig find this explanation more germane than the two other accounts they identify as alternatives, i.e. the domestic structure explanation (which refers to the compatibility of EU rules with partner countries’ traditions, institutions and practices) and the power-based explanations (which refers to the interdependence of partner countries with alternative governance providers).

Yet, according to all three accounts identified above, we find that Armenia should not be responding to EU demands for reform. In this section, we apply specific variables identified in the literature to the case of Armenia. In the rich literature on the EU’s influence in its eastern neighbourhood, Armenia is one of the least studied countries, yet it is often perceived as a laggard in the implementation of the ENP and the Eastern Partnership for three reasons. First, Armenia eschews membership aspirations, in sharp contrast to Ukraine, Moldova and Georgia. Second, the political regime (a non-competitive political system dominated by oligarchic groups) would probably not survive the reforms which Armenia would be required to introduce. Finally, the lack of a strong dependency vis-à-vis the EU (and a strong security dependency vis-à-vis other players, as reflected by the strategic alliance with Russia and the membership in Russia-driven Collective Security Treaty Organisation (CSTO)) seemingly relegates the EU to a lower level of importance for the Armenian leadership.

From the outset of the neighbourhood policy, a number of publications have emphasised the lack of incentives (especially a membership perspective) offered by the EU as a major obstacle to the transfer of EU rules and policy beyond its borders. For Kelley (2006), the lack of a strong reward under the ENP explains the policy’s limited effectiveness. In the absence of any membership perspective, the EU’s leverage is too weak to induce compliance with EU acquis. However, more recently, scholars have challenged this assumption, developing a more nuanced understanding of the relationship between a country’s intention to join the EU and its actual compliance with EU demands. After studying Ukraine, Langbein and Wolczuk (2012) demonstrated that membership aspirations do not shape the outcome with respect to the adoption and application of EU rules. Yet they also show that the selection of EU rules, which they define as ‘the undertaking of a commitment to adopt and implement EU rules in official relations’ is mainly driven by membership aspirations. Applied to Armenia, this suggests that the country is unlikely to select EU templates, given that it has never expressed any membership aspirations.

The nature of the political regime also seems to preclude Armenia’s Europeanisation. For Franke et al. (2010, 155), the persistent Soviet-era mentality of an incumbent regime in an ENP partner country may increase adaptation costs linked to EU demands and result in considerable resistance to EU policies. Börzel and Risse (2012) also identify the type of regime (degree of democracy) as an important factor influencing domestic change in response to the promotion of EU norms and policies: the more authoritarian a regime is, the less likely is the EU to influence domestic institutional change. This seems to apply to Armenia. While the country was unprepared for the collapse of the Soviet Union and the challenges stemming from independence, the conflict with Azerbaijan in the 1990s ‘thwarted early attempts at building democratic institutions and bolstering political reform’ (Giragosian 2013, 12). As a result, unlike Georgia, Ukraine and Moldova, where democratisation (even if partial) has occurred, Armenia hardly progressed in this regard. As pointed by Iskandaryan (2012), post-Soviet Armenia has a record of rigged elections and corrupt administration. The country is characterised by competitive authoritarianism, where ‘formal democratic institutions are widely viewed as the principal means of obtaining and exercising political authority’, yet ‘where incumbents violate those rules so often and to such an extent, however, that the regime fails to meet conventional minimum standards for democracy’ (Way and Levitsky 2002, 52). The tight overlap between political and economic interests is another characteristic of the regime, resulting in depleted public trust in political elites. Against this backdrop, the political costs of adapting to EU demands would be expected to be higher in Armenia than in some other neighbouring countries. More particularly, EU requirements related to human rights, the rule of law and good governance are unattractive to the incumbent authorities.

Regional patterns of dependencies are another set of variables influencing the effectiveness of EU policies in the eastern neighbourhood. Power asymmetries (Börzel and Risse 2012) are postulated as an important scope condition for domestic institutional change. According to the power-based explanation, the effectiveness of EU external governance varies depending on EU resources vis-à-vis and interdependence with partner countries against the role of alternative poles of governance (Lavenex and Schimmelfennig 2009, 792). Yet again, interdependence with the EU and actual linkages with Armenia are limited especially as compared to Ukraine or Moldova. For example, the number of Schengen visas requested by Armenian citizens is low when compared to Moldova and even Georgia. Trade interdependence is also weak, with low volumes of export from Armenia to the EU and even lower volumes of EU imports to Armenia. Armenia does not even use its existing export quota under the enhanced General System of Preferences (GSP+). The literature suggests that such a low degree of interdependence weakens the EU’s leverage on Armenia. In addition, scholars argue that in order for the EU to use hierarchical governance (considered the most effective mode of external governance), partner countries have to be not only heavily dependent on the EU but also more dependent on the EU than other sources of governance (Dimitrova and Dragneva 2009; Lavenex and Schimmelfennig 2009, 804). Armenia’s overwhelming dependence on Russia is therefore noteworthy. This pro-Russian orientation manifests itself in two key respects: security and dependency in key economic sectors. First, Armenia relies on Russia as a primary security guarantor. Reliance on Russian military capabilities and participation in Russia-led multilateral organisations strengthens Armenia vis-à-vis Azerbaijan and probably deters attacks. Second, it terms of economic links, Russia is the most important source of investment and a destination for labour migration. It is also a key supplier of energy to Armenia and has a monopoly over gas distribution. In sum, Armenia’s (inter)dependence with Russia is broad and deep. Since interdependence with Russia is ‘a key variable defining the effectiveness of the EU’s external governance’ (Dimitrova and Dragneva 2009, 854), Armenia would appear to be a clear-cut case for eschewing Europeanisation.

An Unexpected Acceptance of EU Policy Templates: Empirical Evidence from Armenia

Armenia has few incentives to adopt EU rules and templates, and the decision to join the Eurasian Economic Union only seems to confirm the validity of the explanations put forward in the literature. Yet, closer empirical scrutiny indicates that, contrary to the aforementioned expectations, Armenia was actually surprisingly receptive to EU influences and willing to adopt EU standards: between 2010 and 2013, the country implemented substantial reforms to comply with EU rules and continues to express an interest in doing so.

Such progress remains overlooked in the literature, with a few exceptions. Babayan and Shapovalova (2011) stress the positive attitudes towards the Eastern Partnership in Armenia. Ademmer and Börzel (2013) provide a comparative analysis of convergence in energy, anti-corruption and migration policies, noting some considerable progress. They show that while the high conditionality exerted by international actors yielded only formal changes in anticorruption policies, Armenia partially complied with the EU demands on energy and meets the EU’s detailed requirements on migration.

Our own empirical research offers evidence from four sectors. The research involves a multi-sector study of the impact of the EU on domestic change, focusing on sanitary and phytosanitary standards (SPS), regulation of state aid, visa liberalisation and reform of the gas market. Evidence of significant approximation with EU rules was observed in three of four sectors: SPS, competition and migration; energy was the exception. In sectors where changes have been identified, they are of a relatively recent origin, initiated around 2010. The three sectors where Armenia complies with EU demands are representative because two of them (food safety and state aid) pertain to the dense trade-related acquis and they were part of the EU’s conditionality—known as ‘key recommendations’ before launching negotiations of Deep and Comprehensive Free-Trade Area (DCFTA). The third sector (migration and visa-related rules) is pivotal in the light of the EU’s offer to liberalise the visa regime with its eastern neighbours; at the same time, it goes to the core of partner countries’ sovereignty, e.g. access to their territory and rules related to citizenship.

The food safety area illustrates particularly well Armenia’s adoption of EU templates. Despite only recent efforts to converge with EU food safety requirements, Armenia made substantial progress. A major step in meeting EU requirements to open DCFTA negotiations was the governmental decree establishing a State Service for Food Safety in December 2010, replacing previous bodies and creating a united authority as required by the EU. Soon after, a risk assessment centre and a network of specialised laboratories were set up (Joint communication by the European Commission 2012). The establishment of the State Service for Food Safety kicked off reforms in the area. An intergovernmental working group, comprised of food safety, veterinary and phytosanitary experts, was established to ensure further approximation of national legislation with EU requirements (Governmental Decree No 711 of 26 July 2011). A series of laws, as well as numerous subordinate normative acts, was adopted on food hygiene, fishery products, technical rules on food additives, hazard analyses of foodstuffs, veterinary drugs and phytosanitary registration. This places the country ahead of Ukraine which has neither adopted a Food Safety Law nor created a Food Safety agency. Although closer empirical scrutiny would be required to ascertain the degree to which EU rules are effectively implemented, the introduction of EU food safety standards in Armenian food-producing companies indicates that the country has started applying EU templates.

Legal approximation on migration issues confirms this picture. Armenia started negotiations for a visa facilitation and readmission agreement with the EU only in 2012. Yet the country has reformed in line with EU standards in the area of migration. In 2009, the State Migration Agency was upgraded to a State Service status with policy-making and coordination competences, as recommended by the EU. This places the country ahead of neighbouring Georgia which, despite being further ahead in the visa liberalisation process, has not yet established a Migration Service (Delcour 2013). In line with EU recommendations, Armenia adopted a migration management concept establishing an intergovernmental working group in 2010. The national action plan on migration drafted with the help of EU advisors and approved in November 2011 includes performance indicators and benchmarks. The signing of the visa facilitation (December 2012) and readmission agreements (April 2013) reflects Armenia’s progress towards EU migration rules, even though an examination of the implementation of these agreements would be needed to clarify the extent of application in the area of migration.

With regard to regulation of state aid, as part of key recommendations for opening negotiations on the DCFTA, Armenia was required to develop a strategy and draft legislation on monitoring state aid. In line with the EU recommendations, the State Commission for the Protection of Economic Competition became the key body to oversee regulation of state aid. The EU funded a twinning project on ‘Competition and State Aid’ over 2011-2012, located within the State Commission, which provided significant support to Armenia in terms of legal approximation. With regulation of competition state aid being a highly sensitive area due to its restrictions on sovereign tax and industrial policies, Armenia has showed a considerable degree of openness to the EU, including the presence of EU’s long-term experts inside the State Commission. Even though the process of approximation was cut short by the decision to join the Customs Union, staff of the Commission expressed a great interest in continuous cooperation with the EU.

It is important to stress that such rapid reforms at the sectoral level cannot be attributed to influence of other external actors, even though they have been present in Armenia for a long time. Both domestic and EU actors specifically attribute the domestic changes initiated since 2010 in Armenia to EU’s engagement, and rapid results were visible in a number of sectors with specific reference to the EU’s conditions, templates and assistance.

Armenia’s substantial achievements in terms of legal approximation and institution building resulted in a rapid conclusion of DCFTA negotiations. The DCFTA section of the association agreement encompasses tariff and non-tariff barriers. Partner countries are expected to incorporate the bulk of EU’s corpus of rules. DCFTAs thus entail wholesale institutional and regulatory reform in key sectors of EU internal market and trade policy (e.g. food safety, competition and intellectual property rights). Prior to opening DCFTA negotiations, the EU issued ‘key recommendations’, which required Armenia to adopt specific EU rules in key sectors, such as food safety standards, competition and state aid, intellectual property rights and so forth. In order to open the negotiations, Armenia adopted a ‘Strategy for accelerating the reforms in the Republic of Armenia within the framework of the Eastern Partnership’ (2011), introduced the changes and was able to commence the DCFTA negotiations early March 2012. According to EU officials, it was an ‘easy country’ to negotiate with, in contrast to Ukraine or Georgia; and EU-Armenia negotiations were completed in July 2013.

Therefore, evidence shows that Armenia has been actively engaged with EU policy and institutional templates, although implementation is uneven, recent and in some sectors may prove to be short-lived owing to the country’s decision to join the Customs Union. It is thus clear that an in-depth analysis is needed to understand this unexpected, even if circumscribed, receptivity, to EU templates.

Explaining the Interlocking Dynamics Behind Armenia’s Silent Europeanisation

In this remaining part of the article, we explain the incongruence between theoretical accounts and empirical evidence of compliance with EU demands in Armenia. We postulate that only through an understanding of the domestic agenda is it possible to discern the key factors driving the adoption of EU policy and institutional templates by a non-member state.

Our overarching premise is that Armenia’s compliance derives from the country authorities’ (cost-benefit) analysis of the EU’s offer in the light of the challenges presented by the country’s specific context, i.e. a noticeable deterioration in its political, economic and geopolitical situation. Armenia’s interest coincided with the EU’s enhanced offer under the Eastern Partnership, an initiative which addressed the elites’ needs while entailing few political costs for them. This choice was underpinned by the perceived compatibility of adopting EU’s templates with its security alliance with Russia.

Modernise to Survive

After 2008, ‘modernisation’ was prioritised as a survival strategy for an increasingly vulnerable Armenia and its incumbent authorities. The decision to reform derives from economic and geopolitical crises that have weakened the country’s position, and from lingering political tensions that have developed since 2008.

In spite of the early introduction of structural reforms after the USSR collapse, followed by a successful macro-economic stabilisation programme in the mid-1990s, Armenia struggles with widespread poverty, high unemployment and rising inequalities (BTI Armenia Country Report 2012). The economic crisis of 2009 exposed the fragility of Armenia’s economic model with its heavy reliance on, first, remittances from labour migrants and its diaspora, and second, the service sector and construction industry (BTI Armenia Country Report 2012). The scale of the contraction of the Armenian economy shocked the leadership. Remittances, an important part of the GDP, have become an increasingly unreliable source of income and support.

The deterioration of the regional environment only added to Armenia’s economic woes. In particular, Armenia’s regional isolation resulting from the war with Azerbaijan over Nagorno-Karabakh has been a defining feature of its post-Soviet existence. Its isolation (owing to the closed borders with Turkey and Azerbaijan) also hinders trade and lowers its economic growth by up to 30% of GDP. The 2008 conflict in Georgia (a major gateway to the world for Armenia) and the failed rapprochement with Turkey a few months later further exacerbated its vulnerabilities. In this context the Armenian authorities had little choice but to embark on domestic reforms.

This emerged as a crucial issue for the authorities who faced a profound internal political crisis. The 2008 presidential elections, from which Sargsyan emerged as a nominal winner, were marred by post-electoral violence. This violence resulted in casualties and a deadlock between the authorities and the opposition, in which neither side emerged as a clear winner (BTI Armenia Country Report 2012, 2). While the authorities became deeply unpopular, the opposition lacked clear policy alternatives. The political deadlock left the Armenian authorities deprived of legitimacy and was viewed with suspicion by a deeply polarised population. As a result, a consensus emerged on the urge to reform further.

Overall, pressures for reforms increased so much that by 2010, the Armenia government became intent on carrying out reforms. The need for domestic change became important to the political elites both to overcome the country’s geopolitical and economic vulnerability and to ensure their political survival.

The EU as a Key Partner in the Modernisation Process: A Cost-benefit Analysis

The EU’s enhanced offer under the Eastern Partnership was therefore serendipitous and highly relevant to the country’s needs, while at the same time not threatening the political survival of the elites through democratic conditionality.

The Eastern Partnership — A Timely Template for Armenian Reforms

While in the 1990s, the EU was uninterested in the South Caucasus, the launch of the ENP and, especially, the Eastern Partnership heralded a new beginning. In particular, following the Rose revolution in Georgia and increasing pressure by some EU actors, South Caucasus countries were formally included in the ENP in 2004. The policy became fully operational only in 2007 after the ENP action plans were signed. Nonetheless, the EU remained a distant actor, owing to the lack of EU Delegation in Armenia until 2008. Overall, the ENP—with its vague and remote prospect of a ‘stake in the Internal Market’ (European Commission 2003, 4)—failed to offer tangible incentives for Armenia to reform in absence of domestic demand.

In contrast, the Eastern Partnership launched in 2009 proved a particularly attractive offer, coinciding with the country’s needs, as it provided new and tangible prospects: an enhanced contractual framework (association agreements combined with DCFTAs), the prospect of visa liberalisation and increased sectoral cooperation. Even though the EU’s eastern policy largely eschews security issues that have been pivotal for Armenia, it offered an unprecedented scale and intensity of linkages. The Eastern Partnership established direct links between sectoral reforms and an enhanced relationship with partner countries. From the EU perspective, a closer relationship with neighbouring countries depended on their convergence with EU’s technical rules and political norms. Regulatory approximation was expected to ‘contribute to the modernisation of the economies of the partner countries and anchor the necessary economic reforms’ (European Commission 2008, 3)—an objective which meets Armenian authorities’ own modernisation agenda.

The Eastern Partnership introduced highly targeted conditionality at a sectoral level. As DCFTAs include binding provisions on the application of trade and regulatory frameworks, the EU used conditionality to ensure that key elements were effectively implemented before negotiations were opened (Delcour and Wolczuk 2013). Therefore, the launch of the EaP was crucial in terms of linking greater proximity to the EU with reforms in a few specific sectors, such as food safety, migration and state aid. Together with explicit sector-specific conditionality, the Eastern Partnership intensified interactions at a technical, expert level. Such interactions with the Caucasus countries had been underdeveloped within the ENP. Until 2008, in Armenia ‘there was very little understanding as to what the ENP was actually about’, according to an EU official based in Yerevan. Being much more focused on the specificities of policy transfer, therefore, the Eastern Partnership fostered a better understanding within Armenia as to what was required of the country in order to ‘move closer’ to the EU. The increased technical assistance and intensification of governance networks greatly facilitated the exposure of Armenia to EU governance templates. Under the various Eastern Partnership bilateral and multilateral formats, Armenian high-level officials, experts and civil society organisations have been repeatedly exposed to EU rules, norms and practices.

Since the Eastern Partnership was launched, there has been a consensus amongst domestic actors on the benefits of closer relations with the EU. Instead of being a distant external actor, the EU came to be seen as the major partner in the modernisation process, as reflected in President Sargsyan’s speech in Marseille in December 2011:

The European Union has not only become one of our most important partners in the world but also plays a significant role inside Armenia, assisting us in the implementation of the reforms and in strengthening economic and overall stability of the country.

The discourse held by Armenian leaders and officials was highly positive for two key reasons. First, the absence of a membership perspective under the Eastern Partnership, which has been strongly criticised by some other eastern neighbours, such as Ukraine, was not considered a drawback in Armenia as the country had not declared membership aspirations. Second, EU governance templates were viewed as highly timely for Armenia. In particular, there was no incongruence between pre-existing reforms and EU templates—a factor that explains Georgia’s resistance to compliance under the Saakashvili presidency (Delcour 2013). So when the EU stepped up its role as a ‘governance exporter’ in 2009, Armenia was strongly interested in adopting external policy and institutional templates. The Eastern Partnership came to be perceived as a timely stimulus for modernising the country, much in line with the EU’s own vision of the policy. The EU’s role inside Armenia, according to President Sargsyan’s speech in Marseille, was to provide guidance for the country’s internal reform process.

This is reflected in Armenia’s approach to convergence at the sectoral level. Armenia has carefully estimated the costs of reforms to comply with EU demands, for instance in the food safety sector. This is particularly noteworthy as it has not yet been done by all eastern partners, including those ahead of Armenia. The considerable costs associated with SPS (e.g. creation of laboratories and training of inspectors) have not deterred the country from further reforms in line with EU requirements. Indeed, Armenia has accepted the short-term costs for the sake of the long-term benefits expected to accrue from the adoption of EU rules, as reflected in the food safety sector and seeking access to the single market. At early stages of reform, the Food Safety Agency and the Ministry of Agriculture have consulted widely (including food industry and producers, consumer associations) in order to identify products suitable for future exports to the EU market.

Clearly, Armenia’s choice of the EU as a beacon was premised on the belief that EU rules and policies would be conducive to modernisation and benefit it, as reflected in the comments of Sargsyan at the Vilnius Eastern Partnership summit:

The Eastern Partnership enabled us to give new impetus to the modernisation efforts to our state and society upon the principles of democracy, human rights and rule of law. It stimulated the agenda of our wide-scale reforms.

The Eastern Partnership: Modernising with Minimal Political Costs

The EU’s offer—focused on long-term, low-politics cooperation on technical issues—was all the more attractive as it did not require (at least in the beginning) political reforms that would entail high costs for the Armenian elites, or even threaten their political survival.

Under the Eastern Partnership, especially, the EU has focused on sectoral regulatory approximation, initially leaving aside polity-related changes, i.e. democratisation and human rights as well as the rule of law. Upon the launch of the Eastern Partnership, the EU adopted explicit conditionality based on clear benchmarks only with regard to specific sectors identified as priority areas under the forthcoming DCFTA negotiations, as well as negotiations related to visa facilitation and/or liberalisation. True, it has been argued that EU sectoral policies include strongly codified democratic governance provisions (Freyburg et al. 2009, 1033). Yet closer scrutiny of EU conditions under key sectoral policies reveals that the EU has only occasionally fostered the ‘incorporation of democratic principles into administrative rules and practices’ (Freyburg et al. 2009, 1028) at the sectoral level. Rather, it has primarily sought to export those rules guaranteeing the quality and safety of products to be traded under DCFTAs; likewise, under the visa facilitation/liberalisation process, it has prioritised security-related rules at the expenses of human right-related provisions (Trauner et al. 2013).

For Armenia, this means that when the Eastern Partnership was launched, the EU accepted the non-democratic political status quo after the 2008 crisis as a given without making explicit political changes a precondition for closer ties, not requiring a sharp separation of politics from the economy, as advocated by civil society organisations (Chatham House 2011). Thus, powerful economic actors present in Armenian politics could continue to advance their business interests via political means unhindered.

Therefore, the modalities of EU’s policies vis-à-vis Armenia facilitated the country’s responsiveness to EU influences. The political costs of engagement with the EU were low, while the elites could increase their legitimacy by modernising the country, especially as regulatory convergence did not entail immediate power costs in terms of loosening their control over the political system. The elites dovetailed their domestic agenda with EU-Armenia relations, even though civil society organisations and experts criticised the EU’s lack of emphasis on democracy and human rights arguing that it added legitimacy to the old political establishment, leading to disenchantment in society (Chatham House 2011). Despite their non-democratic profile, Armenian authorities were de facto legitimised by the EU which actively interacted with them under the negotiations for association agreements and DCFTAs.

At the same time, Armenia’s strongly centralised political regime facilitated the adoption of EU templates with few veto players able to block rapid reforms. The vertical exercise of power proved to be a driver for policy change where it coincided with the domestic agenda, as illustrated in our study by the migration and food safety areas.

The Perceived Compatibility between EU Templates for Modernisation and a Security Alliance with Russia

The defining feature of post-Soviet Armenia has been the Nagorno-Karabakh conflict. The protracted nature of the conflict and ongoing fears of an attack by Azerbaijan elevated Nagorno-Karabakh to the paramount foreign policy priority for Armenia, relying on Russia to provide its security. However, the continued vulnerability of Armenia means that it is constantly seeking other allies, even if in economic — rather than security — terms. Thus, while the role of the EU as a security provider is highly circumscribed, the country aimed to ‘enhance Armenia’s strategic significance to the West while also elevating its value as Russia’s reliable regional ally’ (Giragosian 2011, 3).

In contrast to the EU, Russia is not regarded as a credible source of policy templates for modernisation. Hence, there was no incongruence between dependence on Russia for security and economic reasons and the interest in the EU, thereby enabling Armenia to seek integration with both, yet along different lines. In essence, the ‘complementarity’ principle signified the combined reliance on Russia to protect Armenia militarily with reliance on the EU to promote the country’s economic development. However, Russia has remained the key security guarantor and hence linkages with the EU complement rather than replace the dependency on Russia. This dependency accounted for Armenia’s restrained rhetoric vis-à-vis the EU. As one Armenian interviewee put it: ‘we are not in a position to yell: “EU!” because of our security situation’. This makes Armenia an interesting case of ‘silent Europeanisation’, whereas most states seeking closer integration with the EU, including Georgia, Ukraine and Moldova, are only too keen to loudly proclaim their pro-European aspirations.

Nevertheless, this compatibility owing to Russia’s lack of objection to Armenia’s policy towards the EU proved relatively short-lived. While initially Russia did not constrain Armenia’s moves towards the EU, this abruptly changed in 2013. Russia became concerned over growing EU influence in the neighbourhood, especially as it launched its own project of deep economic integration, the Eurasian Customs Union (ECU) of Belarus, Kazakhstan and Russia. The ECU was developed with a view to creating in 2015 an alternative to the EU, through the Eurasian Economic Union (Dragneva and Wolczuk 2013). Although Armenia initially ruled out membership in the Eurasian project, Russia gradually forced Armenia to reverse its decision. In April 2013, the country signed a memorandum of understanding with the Eurasian Economic Commission, which was still vague and lacked any binding obligations. Yet on 3 September 2013, President Sargsyan suddenly announced his country’s intention to join the ECU, stating that ‘participating in one military security structure [i.e. CSTO] makes it unfeasible and inefficient to stay away from the relevant geo-economic area’. The role of Russia in guaranteeing the country’s security was key in Armenia’s decision on accession to the Russian-led Single Economic Space. Russia’s use of security vulnerability (e.g. arms sales to Azerbaijan) forced Armenia to reject EU’s offer of deep economic integration even though negotiations had been completed a few weeks earlier. The highly centralised decision-making system in Armenia helps explain this volteface. The decision to engage in Eurasian integration was taken by the president without any domestic deliberations and took the Armenian elites, society as well as the EU itself by surprise.

Armenia’s decision has taken the association agreement with a DCFTA off the agendas. While it did not raise any significant protests in the country, this decision overshadows persistent tensions and doubts within parts of Armenian society, primarily NGOs and business (Delcour 2014). Paradoxically, Armenian officials continue to proclaim an interest in adopting EU policy templates, suggesting that the first two factors behind Armenia’s compliance are still valid. As indicated by President Sargsyan, ‘building and strengthening Armenian nationhood upon a European model has been a conscious choice of ours, and that process is hence irreversible. Our major objective is to form such mechanisms with the EU that on the one hand would reflect the deep nature of our social, political and economic relationship, and on the other—would be compatible with other formats of co-operation’.

While Armenia’s openness to EU’s policy templates remains high, it has, however, been severely constrained by participation in the Eurasian integration project. In practice, the programme of economic modernisation à la EU has been largely suspended by the Union, reflecting the fact that in the EU’s view Armenia’s membership in the Eurasian project is not compatible with the adoption of its own acquis. Whereas in migration there is a high degree of complementarity (Ademmer and Börzel 2013), in other sectors Eurasian integration regime requires a high degree of harmonisation with its own expanding regulatory frameworks. The EU is reluctant to facilitate Armenia’s regulatory modernisation, even when it relates to WTO commitments, when this facilitates membership in an alternative regime for economic integration. It has thus significantly reduced the scope of its assistance to Armenia.

Yet, as the ECU and its upgraded form—the Eurasian Economic Union—are complex organisations, preparation for membership has been a cumbersome process. Even though formally major steps have been undertaken with the adoption of a road map in December 2013 followed by the approval of the action plan for implementation in January 2014 and the signature of the accession treaty to the Eurasian Economic Union in October 2014, the country has actually requested exemptions from customs duties on 900 commodity groups during accession talks. This huge number reflects Armenian concerns about the economic consequences of accession not only in terms of rising import customs duties but also the need to reconsider Armenia’s WTO commitments (Delcour 2014).

Conclusions: The Case for Revising Existing Approaches to Non-accession Europeanisation

According to the key explanations used in the literature, Armenia should not be converging with EU norms, yet it has done so, rather rapidly. Strong empirical evidence across policy sectors demonstrates the country’s receptivity to EU influences, something that existing approaches seem unable to explain.

In our view, this stems from both the predominant focus on EU-level variables in the literature and their disconnection with other sets of variables. EU sectoral conditionality and incentives under the Eastern Partnership do matter to explain Armenia’s adoption of EU templates in 2010-2013. Yet they fail to explain why the country abruptly decided to join another regional integration project at a time when it had met key EU demands under the DCFTA and completed the negotiations. Despite the ‘pull’ for compliance triggered by the need for modernisation, the domestic structure explanation (Lavenex and Schimmelfennig 2009) alone does not suffice to explain the conundrum of Armenia’s integration as it is a broad and vague concept which subsumes domestic preferences, actors and shifting dynamics. Finally, the power-based explanation taken in isolation cannot explain why Armenia initially complied with EU demands.

What the single case of Armenia demonstrates is that the three sets of factors taken separately and analysed as static and isolated variables fail to explain empirical evidence on the country’s Europeanisation. On the contrary, we show that it is the temporal interlocking of EU, domestic and regional factors which accounts both for the rapid compliance with EU demands and the sudden decision not to pursue association with the EU.

We highlight three factors. The first is Armenian authorities’ growing sense of urgency around modernisation, stemming from an increased regional vulnerability (in the wake of the 2008 conflict in Georgia and the failed rapprochement with Turkey and lingering political tensions in the aftermath of the 2008 presidential elections). In this context, the EU’s enhanced offer under the Eastern Partnership provided an opportunity for Armenian authorities to modernise the country with a view to loosening its vulnerability while incurring few political costs for the ruling elite. The EU’s path to modernisation was also regarded as compatible with (and complementary to) Russian-centred regional security regimes. Nonetheless, ultimately Russia’s pressure on Armenia (together with the lack of any security guarantee by the EU) has swayed the country’s decision away from concluding the Association Agreement and instead towards joining the Russian-led Eurasian integration.

By providing empirical material on a little known case study, we enrich our understanding of non-enlargement Europeanisation in cases where the EU is not the only ‘diffusing power’. In our view, Armenia’s ‘silent Europeanisation’, i.e. adopting EU templates without a vocalised demand for membership, demonstrates the need for a research design which allows for stronger interactions between EU-related variables with domestic conditions and regional linkages. This is not least because the nature of the EU’s policies can only be assessed at a country level rather than ex ante: outside the context of enlargement, what constitutes an ‘incentive’ is highly country-specific as EU influences are filtered through shifting domestic preferences, constraints and capacities. In other words, in the neighbourhood, countries’ receptivity is determined by ‘importing’ countries rather than the ‘exporting’ organisation and this applies both to the eastern and southern neighbourhoods of the EU.

Overall, our research has demonstrated that existing theories do not accommodate realities ‘on the ground’ and signal the need for a new research approach based on extensive empirical data. Theory building about EU’s influence in non-member states needs to be premised on actual systematic and comparative empirical research, even though data collection in those countries is more challenging for a variety of reasons, not least logistical and linguistic. By zooming out from EU-level variables and starting with the domestic context, structures and agenda, scholars will be able to identify a wider range of factors accounting for domestic change in the eastern neighbourhood countries, or lack thereof, and to develop a more robust research framework allowing for cross-country, cross-sector, but also timely, comparisons in what is a rapidly changing part of the world.