Europe slammed its doors on Armenia

Europe has greatly disappointed Armenia. Yerevan seriously hoped that by embarking on the path of integration into the European community, paradise was prepared for them along with milk rivers and jelly shores. But the Armenian seekers of an easy life had to descend from heaven to earth, and the fall was quite painful.

The sad news for the citizens of Armenia was announced today by the Minister of Economy of the Republic of Armenia Gevorg Papoyan. According to him, negotiations with the EU on a new preferential trade regime for Armenia are making difficult progress. Recall that the preferential trade regime "General Trade Preferences" (GSP+) was in effect until the end of 2021 and provided for the zeroing of duties for a number of non-primary goods, but since 2022 this regime has ceased to operate.

"Armenia is negotiating a new regime - "Autonomous Trade Measures" (ATM), but European partners warn that it cannot fully operate. Therefore, negotiations are underway on its partial application," Papoyan added. If translated into simple language, the Armenian Minister of Economy admits that Yerevan is insolvent and asks official Brussels for leniency. There are no prerequisites for the EU to make concessions to Armenia, since Europe itself is in conditions of economic instability and pays special attention to protecting its markets. In addition, Armenia is still a member of the Eurasian Economic Union, and staying there is an obstacle to obtaining economic preferences. It is obvious that Europe has slammed the doors in front of Armenia and thereby thwarted Yerevan's plans for a carefree life.

Since the beginning of the year, employee strikes have intensified in all industrialized European countries in order to increase salaries and protect the domestic market from competitors. Belgian, Italian, French and German farmers blocked the main highways, showing their displeasure. In such a situation, the EU is forced to adhere to an approach that focuses on large economies and strong markets. And Armenia, with its rapidly shrinking population and small market, cannot be considered a priority for Europe. Therefore, Brussels has no reason to make concessions to Yerevan.

At the same time, the difficult economic situation in Armenia is aggravated by high levels of inflation and rising prices for basic products, which causes discontent among the population. That's why the Minister of Economy is sounding the alarm.  Financial support from the EU could alleviate some of these difficulties, but the stringent demands of European partners on reforms and economic transparency put the Armenian government in a difficult position. In order to obtain new trade preferences, Yerevan needs to make structural changes, for which there are no resources available and are not expected in the current conditions.

In addition, the country's economic problems are exacerbated by internal challenges, including the outflow of labor and reduced productivity in various sectors of the economy. Therefore, the Europeans will think a thousand times before concluding any deals with Armenia. This adds additional pressure on the authorities, who must look for ways to activate the domestic market and attract investment.