Department of EU International Relations and Diplomacy Studies EEUU DDiipplloommaaccyy PPaappeerrss 77//22001144 A Black Knight in the Eastern Neighbourhood? Russia and EU Democracy Promotion in Armenia and Moldova Nicola Del Medico © Nicola Del Medico 2014 Dijver 11 | BE-8000 Bruges, Belgium | Tel. +32 (0)50 477 251 | Fax +32 (0)50 477 250 | E-mail [email protected] | www.coleurope.eu/ird Nicola Del Medico About the Author Nicola Del Medico is Academic Assistant in the Department of the EU International Relations and Diplomacy at the College of Europe in Bruges. He obtained an MA from the same Department in 2014 and also holds an MA (2012) and a BA (2010) in International Relations from LUISS University in Rome, including an exchange semester at MGIMO University in Moscow (2011). Nicola Del Medico has acquired previous work experience as a trainee in the Italian Prime Minister’s Office (2013), as a Blue Book trainee at the European Commission Representation in Rome (2012- 2013) and as an intern at Italy’s Ministry of Foreign Affairs (2011). This paper is based on his Master’s thesis at the College of Europe (Voltaire Promotion), which he wrote in the framework of an EU-ENP Scholarship. Editorial Team: Nicola Del Medico, Sieglinde Gstöhl, Enrique Ibáñez Gonzalez, Lucas Maurer, Jonatan Thompson, Anna Wardell Dijver 11 | BE-8000 Bruges, Belgium | Tel. +32 (0)50 477 251 | Fax +32 (0)50 477 250 | E-mail [email protected] | www.coleurope.eu/ird Views expressed in the EU Diplomacy Papers are those of the authors only and do not necessarily reflect positions of either the series editors or the College of Europe. 2 EU Diplomacy Paper 7/2014 Abstract Europe’s peace and security are challenged by the events taking place in the Eastern Partnership region. Amid growing tensions between the European Union (EU) and Russia, the fate of countries in the common neighbourhood and their progress towards democracy are increasingly at stake. This paper tries to understand to what extent Russia is undermining EU democracy promotion in the Union’s eastern neighbourhood. By focusing on the cases of Armenia and Moldova, EU democracy promotion is analysed in light of the triangular relationship between the countries under scrutiny, the EU and Russia. It argues that domestic conditions and external pressures, linked through the filter of problems of ‘stateness’, are both crucial and mutually reinforcing for democratisation. The paper shows that Russia can undermine EU democracy promotion to the extent that it strengthens the aversion of domestic political forces to democracy-oriented reforms. 3 Nicola Del Medico Introduction “Encouraging economic and political reform […] cannot substitute for a serious effort to counter Russia's long-standing expansionism and its present desire to recapture its great- power status at the expense of its neighbors.”1 When the European Union (EU) launched its Eastern Partnership (EaP) in 2009, the project was supposed to bring democracy, stability and security to the post-Soviet countries it targeted. The current outcome is stalling reforms, growing instability and violence. The emergence of tensions in the EaP area coincided with the return of Russia as a power with regional and global ambitions. Through the Russian-led Customs Union (CU) and the planned Eurasian Economic Union (EEU), Moscow has actively advocated for the re-launch of regional integration plans in the post-Soviet space, including countries that are involved in the Union’s European Neighbourhood Policy (ENP). The rising confrontation between two competing models of regional integration combines with growing insecurity and the lack of progress in democratisation in the EaP area. This paper aims to shed light on EU democracy promotion in the eastern neighbourhood and to evaluate the impact of Russia’s proactive regional and foreign policy in this regard. Specifically, it focuses on the cases of Armenia and Moldova. The two countries are both located in Russia’s and the EU’s common neighbourhood, they are confronted with ‘frozen conflicts’ – respectively in Nagorno-Karabakh and in Transnistria – and have been targets of EU democracy promotion. However, they have made different choices in both their domestic and foreign policies. Based on the two case studies, this paper aims to give an answer to a crucial and topical question: to what extent is Russia undermining EU democracy promotion in the eastern neighbourhood? I argue that EU democracy promotion in the eastern neighbourhood is shaped by a triangular relationship between the EaP country, the EU and Russia, whereby the country under scrutiny is not a mere object but an active and decisive subject. The form and impact of EU democracy promotion depend on the mutually reinforcing blend of the objectives pursued by the third country and the influence exerted by both the EU and Russia. Specifically, concerns related to national security and 1 Y. Tymoshenko, “Containing Russia”, Foreign Affairs, vol. 86, no. 3, 2007, p. 70. 4 EU Diplomacy Paper 7/2014 contested statehood in Armenia and Moldova have given rise to diverging attitudes towards EU democracy promotion. The following section introduces the theoretical concepts and tools relevant for the analysis. The paper then examines the Armenian and Moldovan cases by focusing on three levels of analysis – the domestic structures, the EU’s and Russia’s policies – in order to draw conclusions on the triangular set of relations influencing EU democracy promotion. Conceptualising EU democracy promotion in the EaP The existing literature on EU democracy promotion in the post-Soviet space offers important suggestions on the triangular relationship between the domestic context of EaP countries, the EU and Russia. However, the connections between these three sets of factors, and the corresponding levels of analysis, are left underexplored. As far as the domestic structures are concerned, their centrality in determining the success of democratisation is emphasised by Sasse,2 as well as by Tolstrup, who conceives the domestic ruling actors as “gatekeepers”3 that are able to upgrade or downgrade the external pressure for democratisation. With regard to the EU’s policies – the second variable – Lavenex and Schimmelfennig offer a categorisation of the modes of EU democracy promotion: leverage, linkage and governance.4 Leverage refers to a top-down model of democracy promotion targeting foreign governments, typically by means of political conditionality; linkage denotes transnational exchanges (for instance in civil society or in the economic field); and governance involves sectoral trans- governmental cooperation, leading to the adoption of transparent, accountable and participatory rules in administrative practices.5 According to the authors, the ENP is characterised by governance, as the absence of a membership perspective for its neighbours reduces the Union’s possibilities to successfully resort to leverage. However, an important caveat is that effective external democratic governance may not necessarily lead to democratisation because sectoral and administrative 2 G. Sasse, “Linkages and the promotion of democracy: the EU's eastern neighbourhood”, Democratization, vol. 20, no. 4, 2013, p. 553. 3 J. Tolstrup, “When can external actors influence democratization? Leverage, linkages, and gatekeeper elites”, Democratization, vol. 20, no. 4, 2013, pp. 716-742. 4 S. Lavenex & F. Schimmelfennig, “EU democracy promotion in the neighbourhood: from leverage to governance?”, Democratization, vol. 18, no. 4, 2011, pp. 885-909. 6 Lavenex & Schimmelfennig, op. cit., p. 896. 5 Nicola Del Medico reforms may well coexist with overall non-democratic institutions.6 Moreover, the main focus of these conceptualisations are the EU and its institutions as disseminators of democratisation, thus losing sight of the role played in the process by the domestic structures.7 Hence, there is a need to look in more depth at the links between internal and external factors when examining the promotion of democracy by the EU. Way and Levitsky’s notion of “Western leverage”8 and linkages is relevant to the present paper not only for its reference to such links, but also because the authors consider the role played by alternative international factors impacting on EU democracy promotion – what they call “black knights”,9 that is, competing external powers. This notion can be applied to Russia – the third variable in the present study – as an actor seeking to project its influence in the post-Soviet space. Sasse and Tolstrup investigate Russia’s role and repercussions on democratisation in the region.10 These analyses are also helpful in determining how and when the domestic political setting activates a triangular interaction impacting on democratisation and involving both the EU and Russia as international players. Sasse argues that one of the filters producing an interplay between internal and external factors are “stateness issues”,11 that is, unresolved political and ethnic conflicts, which have a destabilising potential and concern the very existence of the state.12 The inclusion of problems of stateness in the analysis of the domestic context is particularly relevant when looking at the cases of Armenia and Moldova, whose statehood must deal with ‘frozen conflicts’ in respectively Nagorno- Karabakh and Transnistria. 6 Lavenex & Schimmelfennig, op. cit., p. 896. 7 R. Youngs, “Democracy promotion as external governance?”, Journal of European Public Policy, vol. 16, no. 6, 2009, pp. 895-915. 8 L. Way & S. Levitsky, “Linkage, Leverage and the Post-Communist Divide”, East European Politics and Societies, vol. 21, no. 1, 2007, pp. 48-66. 9 G.C. Hufbauer, J.J. Schott & K.A. Elliott, Economic Sanctions Reconsidered: History and Current Policy, Washington, DC, Institute for International Economics, 1990, p. 12, quoted in Way & Levitsky, op. cit., p. 51. 10 G. Sasse, “Who cares about Transnistria? Linkage and Leverage: External actors and conflicts in the post-Soviet space”, Politics In Spires, 24 October 2012; Tolstrup, “Studying a negative external actor: Russia's management of stability and instability in the 'Near Abroad'”, Democratization, vol. 16, no. 5, 2009, pp. 922-944; Sasse, “Linkages”, op. cit. 11 Sasse, “Linkages”, op. cit., p. 554. 12 See also J.J. Linz & A. Stepan, Problems of Democratic Transition and Consolidation – Southern Europe, South America, and Post-Communist Europe, Baltimore, The Johns Hopkins University Press, 1996, p. 16. 6 EU Diplomacy Paper 7/2014 Although Sasse’s study focuses on linkages, this paper will take stateness into account also in the analysis of the leverage and governance dimensions of EU democracy promotion. A focus on this issue in Armenia and Moldova can reveal insights on the role of a ‘black knight’ Russia and on the extent to which EU democracy promotion is shaped by competing external factors. In sum, the variables that guide the present analysis are identified at the intersection of international and domestic political factors. In the case of the ENP – and specifically of the EaP – EU democracy promotion is shaped by a triangular relationship between the third country, the EU and Russia as an alternative pole of attraction. These variables are explored by using different sources such as official documents, literature and nine semi-structured interviews with officials and experts based in Brussels, Chisinau, Paris, and Yerevan. Armenia’s volte face “A ‘captured’ state”13 Freedom House ranks Armenia as a “semi-consolidated authoritarian regime”.14 The country is governed by a strong executive power which supersedes both the judiciary and the parliament.15 It faces serious economic difficulties, with nearly one third of the population living below the poverty line.16 Armenia’s political, security and economic challenges have shaped its participation in the ENP and in the EaP. In the Armenian case, Sasse’s notion of ‘stateness’ problems points directly to the unresolved Nagorno-Karabakh conflict as the major issue affecting the country’s state building and security.17 This conflict has impacted significantly on political competition in Armenia. On the one hand, restrictions on political liberalisation can be explained by the fact that, since the country’s independence, the domestic political spectrum has converged around the need to preserve the country’s borders and security. Keeping a firm and uncompromising stance vis-à-vis 13 F.L. Altmann, J. Deimel & A. García Schmidt, “Democracy and Good Governance in the Black Sea Region”, Commission on the Black Sea Policy Reports, no. 4, 2010, p. 37, quoted in N. Mikhelidze, “Juggling Security, Democracy and Development in the Caucasus: What Role for the EU?”, IAI Working Papers, vol. 13, no. 22, Rome, IAI, July 2013, p. 5. 14 Freedom House, “Nations in Transit. Armenia”, 2014, retrieved 15 October 2014, http://www.freedomhouse.org/report/nations-transit/2014/armenia#.VD4wtdJWG70. 15 Bertelsmann Stiftung, “Armenia Country Report”, in Bertelsmann Transformation Index (BTI) 2014, Gütersloh, Bertelsmann Stiftung, 2014, p. 31; 16 Ibid., p. 13. 17 Sasse, “Linkages”, op. cit., pp. 553, 574-576. 7 Nicola Del Medico Azerbaijan became an essential requirement of political credibility, particularly for those aspiring to the highest government offices.18 On the other hand, there is a perception that democratisation can engender threats to state security because it can pave the way to cleavages and divisions, thus weakening the state and its effective control on borders and territory.19 Hence, the unresolved nature of the Nagorno-Karabakh conflict reinforced the centralisation of power in Armenia.20 According to an Armenian expert, incumbent governments have exploited the Nagorno-Karabakh issue not only to undermine the electoral process but also to suppress recurrent post-election demonstrations.21 In such cases, the government’s discourse framed the limitations to competition and the repression of protests as dictated by the need to maintain stability and unity, for the sake of state security.22 The prominence of security needs permeated also the country’s economic structure and favoured military spending, rather than investments leading to social welfare and development.23 In 2010, Yerevan’s military expenditure accounted for $395 million or 4.2% of the country’s GDP.24 In the last few years, moves to reduce the defence budget were criticised25 in light of Azerbaijan’s almost thirtyfold increase in military spending in the last decade26 – nearly $2.8 billion in 2010 –27 and claims that Baku’s military budget is worth as much as Armenia’s GDP.28 In addition, Armenia has faced difficulties in international trade and cross-border flows: the country is landlocked and it has closed borders with Turkey and Azerbaijan. A “no 18 T. Mkrtchyan, “Democratization and the Conflict of Nagorno-Karabakh”, Turkish Policy Quarterly, vol. 6, no. 3, 2007, pp. 6-7. 19 Mikhelidze, op. cit., p. 8. Mkrtchyan argues against this view and states that the key to Armenia’s security and to conflict resolution rests on steady democratisation. See Mkrtchyan, op. cit., p. 8. 20 M.R. Freire & L. Simão, “From words to deeds: European Union democracy promotion in Armenia”, East European Politics, vol. 29, no. 2, 2013, p. 181. 21 Interview with Hrant Kostanyan, Associate Research Fellow, Centre for European Policy Studies, Brussels, via Skype, 25 April 2014. 22 Ibid. 23 Mikhelidze, op. cit., p. 6. 24 “Armenia – The SIPRI Military Expenditure Database”, Stockholm International Peace Research Institute (SIPRI), retrieved 19 October 2014, http://milexdata.sipri.org/result.php4. 25 S. Harutyunyan, “Ex-Official Concerned Over Actual Military Budget Cut”, RFE/RL, 7 October 2009. 26 Z. Agayev, “Azeri-Russian Arms Trade $4 Billion amid Tension with Armenia”, Bloomberg, 13 August 2013. 27 “Azerbaijan – The SIPRI Military Expenditure Database”, Stockholm International Peace Research Institute (SIPRI), retrieved 17 October 2014, http://milexdata.sipri.org/result.php4. 28 A. Eberhardt, “Countries Briefing on Armenia and Azerbaijan”, European Parliament, 12 June 2012. 8 EU Diplomacy Paper 7/2014 peace, no war”29 stalemate and unfriendly relations with two of its neighbours have had a significant impact on the economy and contributed to make Armenia the poorest country in the South Caucasus.30 Economic hardship went along with concentration of wealth and economic power in the hands of few oligarchs, the so-called ‘Karabakh clan’.31 The ‘clan’ includes individuals and families that moved to Armenia from Nagorno-Karabakh and seized control of key economic sectors by taking advantage of their close relations with Karabakh-native political elites.32 The need to enhance Armenia’s economic development was a major driver behind its participation in the ENP and the EaP.33 The reason that led Yerevan to join a partnership with the EU was, in the first place, economic integration, coupled with an expectation that this, in turn, would result in the lift of the border blockade by Turkey.34 The role attributed by the Armenian government to the EU as a provider of prosperity and economic opportunities is crucial in examining the Union’s promotion of democracy, especially in light of Armenia’s priorities and the country’s foreign policy strategy.35 At the top of the government’s agenda is the preservation of security and a pledge to economic development, with democratisation being a second-order aim.36 Armenia has transposed the pursuit of these priorities at the level of its foreign policy of “complementarity”,37 whereby the country seeks to carefully balance the interaction with external actors that can support the achievement of national objectives.38 29 Mkrtchyan, op. cit., p. 5. 30 “Armenia”, Eastern Partnership Community, 2010, retrieved 26 April 2014, http://www.easternpartnership.org/partner-states/armenia. 31 Freire & Simão, op. cit., p. 180. 32 M. Duffy Toft, “The irony of Nagorno-Karabakh: formal institutions versus informal politics”, in J. Hughes & G. Sasse (eds.), Ethnicity and Territory in the Former Soviet Union: Regions in Conflict, New York, Frank Cass, 2002, pp. 155-157. 33 Freire & Simão, op. cit., p. 183; interview with Kostanyan, op. cit. 34 “Armenia’s President expects Eastern Partnership to deblockade closed border with Turkey”, Armenpress, 25 April 2014, retrieved 26 April 2014, http://armenpress.am/eng/news/ 759627/armenia’s-president-expects-eastern-partnership-to-deblockade-closed-border- with-turkey.html. 35 N. Babayan & N. Shapovalova, “Armenia: the Eastern Partnership’s unrequited suitor”, FRIDE Policy Brief, no. 94, Madrid, FRIDE, September 2011. 36 Mikhelidze, op. cit., pp. 7-8. 37 Vartan Oskanyan, quoted in Freire & Simão, op. cit., p. 183. 38 K. DerGhougassian, “Farewell to Complementarity: Armenia’s Foreign Policy at a Crossroad”, The Armenian Weekly, 1 April 2014. 9