Russia claims EU accession could cost Armenia ‘23% of GDP’

Russia Warns Armenia’s EU Accession Could Cost 23% of GDP

Moscow – Russia’s Security Council Deputy Secretary Alexei Shevtsov has cautioned that Armenia’s potential accession to the European Union could result in an economic impact of approximately 23% of the country’s Gross Domestic Product (GDP), based on conservative estimates. This latest warning from Moscow follows previous statements regarding Yerevan’s pursuit of closer ties with the EU. Shevtsov predicted a rise in inflation – estimated at 22.6 percentage points – and a significant decline in living standards, citing anticipated increases in energy prices, including natural gas.

These remarks align with ongoing discussions about potential increases in Russian gas prices for Armenia, following talks between Armenian Prime Minister Nikol Pashinyan and Russian President Vladimir Putin in early April. Putin highlighted the impossibility of Armenia simultaneously participating in both the Customs Union and the Eurasian Economic Union (EAEU), while also pointing to Armenia’s discounted energy purchases from Russia – currently at $177.5 per 1000 cubic metres, compared to over $600 in Europe. Despite these warnings, Yerevan has indicated a willingness to potentially leave Russian-led economic and security blocs if gas prices rise.

Concerns have also been raised about potential visa regimes with Russia and Iran, impacting Armenia’s tourism sector, which accounts for approximately 13.5% of the country’s GDP. Recent actions by Russia, including stricter import requirements on Armenian products and the reopening of a criminal case against the major mineral water producer Jermuk, have further fueled tensions. Russian-Armenian tycoon Samvel Karapetyan has warned of an “economic war” if the current government remains in power.

Negotiations regarding Armenia’s railway system, currently under Russian management, have stalled, with Shevtsov deeming Armenia’s proposal to transfer the concession to a third party “strange, to say the least.” These developments occur as Armenia prepares for parliamentary elections in June and amid ongoing diplomatic exchanges between russia and armenia.

Topics: #russia #armenia #accession