The growing importance of Euro-Azeri relations

During a November meeting between Azeri President Ilham Aliyev and European Commission (EC) President Jos? Manuel Barrosso in Brussels, the pair signed an agreement to launch an energy partnership between Baku and the European Union (EU). But the EC president insisted that the importance of Euro-Azeri cooperation went far beyond energy security.

Barroso said he was pleased with the strengthening EU-Azerbaijan relations through the European Neighborhood Policy (ENP), but the agreement was multi-faceted. "Our relations are also about pursuing shared European values of democracy, good governance, fundamental freedoms and the protection of human rights," he said.

Barroso's words reflect the increased European interest in Azerbaijan and the South Caucasus area.

The Cooperation Council, consisting of the EU and the Republic of Azerbaijan, held its seventh meeting in Brussels on 14 November, just one week after Aliyev's visit, highlighting Europe's strong interest in stabilizing the region and forging solid energy relations.

At a time of growing anxiety over energy security and worries about Georgia's political instability, the EU is actively seeking a comprehensive security policy for the troubled, but energy-rich, region. And it must do so while at the same time initiating a new common stance policy toward a resurgent Russia, which appears committed to restore its hegemonic role in its neighborhood.

It will not be an easy task.

The EU's enlargement into former Soviet regions has brought new security issues. Since 2003, the ENP framework has been aimed at enhancing political, security, economic and cultural cooperation with a number of countries, including Georgia, Armenia and Azerbaijan.

In such a broad framework, the Euro-Azeri relations have taken on a new dimension. As a country whose post-Communist elite showed interest in cultivating good relations both with Russia and with Western institutions, Azerbaijan was quickly identified as one of the new republics in need of Western economic aid. Additionally, European leaders have not been opposed NATO's steps to include Georgia and Azerbaijan among the countries which may join the organization in the next decade.

Azerbaijan's geopolitical location is key. Notwithstanding its troubled relations with Armenia and the unsettled Nagorno-Karabakh issue, Baku enjoys relative political stability and its importance as a gateway between the Caspian Sea and Georgia is reflected by the new Baku-Tbilisi-Ceyhan oil pipeline and other pipeline projects that aim at increasing hydrocarbons transportation between Kazakhstan and Azerbaijan.

Former EC President Romano Prodi stated in 2004 that Azerbaijan and Kazakhstan were destined to play an increasingly vital role for Europe's energy needs. The EU's interests lie especially in fostering broad legal reforms in Baku, leading to the possible harmonization of EU-Azerbaijan energy market rules.

Such a goal is pursued by European negotiators at a time when Russia's ambitious energy-based power strategy - thanks to state-owned Gazprom- is perceived as a threat to European energy diversification needs and liberal rules.

Viewed from Europe, the most important task in the next few years is the diversification of Caspian oil and natural gas routes, contrary to Gazprom's hegemonic attempts. For Azerbaijan, it is vital to preserve national security and its role as an energy hub between Central Asia and Europe, and Russia and Iran.

Although Europe insists on Azerbaijan's democratization and full commitment to respect human rights – as stated in the November agreement – energy security obviously emerges as the most important goal beyond Europe's actions.

The agreement's priorities include energy legislation harmonization, security and safety enhancement of energy supplies and transit systems, development of an energy demand policy and exchange of expertise.

However, from the Azeri perspective, the country needs to secure its growth and be regarded as a reliable partner, while guaranteeing its strategic security.

Elnur Aliyev, Azerbaijan's representative for multilateral economic relations in Brussels, told ISN Security Watch during an interview this week that Baku wanted to enhance cooperation with Europe on all fronts. "What we think is that focusing on energy will facilitate other kinds of cooperation, since Europe's needs make it a good basis for more common policies."

Since Azerbaijan's foreign policy is based on balancing good relations among Russia, the EU and the US, Baku will be careful not to strain ties with the parties.

"Our relations with Russia are very pragmatic," Aliyev said. "They follow a strategy dictated uniquely by our need to protect our interests." He stressed that Azerbaijan “is not trying to be pro-Western or pro-Russian."

Aliyev said that as a consequence "we are positive that we can be a stabilizing player in South Caucasus. We will continue to support Georgia's territorial integrity against separatism and all kind of extremism, just like we've always had."

The main obstacle for the future of the EU-Azeri bilateral relations could be Russia, which, among other issues, does not share Europe's views on EU expansion.

After his Brussels trip, Aliyev flew to Moscow where he discussed the future of the Russo-Azeri strategic partnership with President Vladimir Putin. Although Moscow's main worry concerning Azerbaijan is Baku's strengthening ties with NATO, energy matters were also part of the talks. Aliyev's apparent unwillingness to satisfy Moscow's requests on Georgia and NATO may expose the country to possible energy blockades reminiscent of the Russo-Ukrainian dispute in January this year.

Analysts in Russia and Western Europe have described the context of the EU-Russia-Azerbaijan relations in various ways. Some European reports highlighted Moscow's chances of fully restoring its hegemony in Azerbaijan – like in the Soviet days.

However, in a report in the Russian daily Komersant earlier this month it was argued that Azerbaijani authorities appeared determined to resist Russia's diplomatic offensive and continue forming its EU-US ties.

For Europe, stability in the South Caucasus and an effective partnership with Azerbaijan are key to enhance energy security and prestige. As the EU prepares for enlargement in the Black Sea area - with Romania and Bulgaria joining next month - its capability to attract the Caucasian republics and project its political influence in the region has become increasingly important.

How to reach such goals while improving relations with Russia is one of Europe's big challenges in the years to come.

By Federico Bordonaro for ISN Security Watch