This article assesses the EU’s engagement policies by tracing the background of the EU’s external policy-making abilities, by outlining EU objectives relative to the South Caucasus and matching those objectives against major events of the last ten years concerning the region. Finally, certain indicators, elicited by EU and South Caucasus experts, are measured to ascertain a sense of the EU’s external policy influence.
Evaluating the performance of the EU’s engagement in the South Caucasus cannot be done in a vacuum, or solely from the point of view of the European Union. It must take into account its object – the South Caucasus (understood as Armenia, Azerbaijan and Georgia, along with adjoining territories of uncertain status), and geopolitical competition, mainly represented by Russia, but to an increasing extent, China and Iran. The European Union’s policy-making ability has steadily increased since the Thessaloniki European Council of 2003, which gave impetus to the ESDP and CFSP, both of which had been in gestation since 2001. The two policies have been much maligned in the absence of credible institutional structures and programs to make their promises real. This has changed with the 2009 Lisbon Treaty, with the creation of a European External Action Service (EEAS), and with a plethora of programs and initiatives aimed at expanding the area of security at Europe’s frontier. The context of this institutional ferment finds its source in the acceleration of change in the geostrategic environment over the last 15 years, and with several occurrences outside European control. This has simultaneously propelled European institutional evolution and taxed its ability to focus.
In addition, major powers began to erect structures and establish institutions to mirror the EU’s. Such is the case of Russia’s Eurasian Economic Union, which burgeoned around the same time as the EEAS was set up. Thus, the South Caucasus can be categorised as a form of “settlement fringe”; a territory objectified both by the European Union and the Eurasian Economic Union. It is understood that Russian might is behind the latter’s creation. The South Caucasus, caught like a planet between two massive stars, can either orbit one or the other, or be pulled apart and disintegrate. A cursory look at the relations among the states of the South Caucasus – however defined – and their immediate neighbourhood indicates that the latter is occurring. This begs the question as to the effectiveness – or rather attractiveness – of the European Union’s engagement strategies.
The EU’s External Policy-Making Apparatus: Background
With a new swath of members, the EU authorities undertook the construction of a Europe of Security and Defence in earnest; namely redefining the 1992 Petersberg Declaration to facilitate conflict prevention and management. The impulsion given at an April 29, 2003 meeting for strengthened defence and intervention capabilities had to be seen in the context of a Europe that distanced itself from a then more adventurous United States (Iraq). This declaration was made by four members, two of which are the most powerful EU states, and among the more capable NATO allies; Germany and France. Little surprise that Javier Solana, ESDP High Representative, presented a plan in Thessaloniki in June of that year, which would put the Europe of Security and Defence on more secure footing, and articulate Europe’s strategic priorities and security concepts. The South Caucasus is named as a low priority among the EU’s objectives; the Thessaloniki text merely stating that the EU “…should take a stronger interest in the problems of the Southern Caucasus, which will in due course also be a neighbouring region.”
A Secure Europe sought to extend the zone of security around Europe, arguing that regional conflicts – often triggered by state failure, bad governance and corruption – disrupt economic activity, and threaten Europe’s prosperity. It would take several more years and upheavals for Europe to be more attentive to the South Caucasus. It did so in the aftermath of the ill-conceived attempt by Georgia to re-enact its forcible reintegration success of Adjaria, this time with South Ossetia. In August 2008, provoked by South Ossetian militias, Georgian forces attempted to regain sovereignty by force over the enclave and environs of Tskhinvali, ending with the rout of the Georgian forces by the Russian army and a six-point ceasefire brokered by France, then presiding the EU. This has opened the door for the EU’s Monitoring Mission to Georgia, which replaced the UN observer mission whose extension had not been granted by the UN Security Council.
Concurrently with the Lisbon Treaty, the post of EU Special Representative for the Common Foreign and Security Policy was created in 2009. In 2011, the EU’s External Action Service (EEAS) was set up, essentially giving the EU a foreign policy voice – and formal presence in the South Caucasus, with Ambassador Philippe Lefort. These steps are indicative of “Europe’s commitment to play a significant role” in world affairs, but are only as good as the programmatic efforts that are deployed in support of policy.
An outline of EU Engagement in the South Caucasus
As Esmira Jafarova explained, EU engagement greatly increased in the wake of the 2008 Russo-Georgian war, but also as a consequence of the institutional capabilities put at the service of EU foreign policy. While the first decade following the collapse of the USSR saw the European Union spend some 1.4 billion Euros in the South Caucasus as development aid, it is only after 2003 that the EU became more “hands-on” in its support. The European Neighbourhood Policy (ENP) admitted the South Caucasus countries individually in the wake of the Rose Revolution in Georgia. However, bereft of dedicated interaction instruments, the relationships became solidified only with Eastern Partnership Initiative (EPI) in 2009.
The EPI gave a bilateral and a multilateral dimension to the EU’s engagement in the South Caucasus. Bilateralism focuses on trade and democratization. Particular efforts are deployed in the areas of societal development, and freedom of action of civil society. These in turn, support the liberalization of trade between individual countries and the EU through Association Agreements (AA). Multilateral efforts carry out projects under the heading of “people-to-people” contacts, essentially supporting grass-roots organizations across de facto borders, and encouraging exposure of South Caucasus youth to European education. The more important vehicles for the respective bilateral and multilateral efforts have been the Deep and Comprehensive Free Trade Area (DCFTA), and the Civil Society Dialogue Network (CSDN).
The European Union’s engagement in partially-recognized territories of the South Caucasus (commonly known as Abkhazia, South Ossetia and Nagorno Karabakh) has been timid, hampered by its “engagement without recognition” policy. On the one hand, titular states of the South Caucasus are wary of EU engagement in these regions, lest the idea of secession be confirmed through official (or even accidental) EU engagement. On the other hand, the burden of development has definitively been undertaken by Russia in Abkhazia and South Ossetia, shutting out Western influence there. The EU Monitoring Mission (EUMM) to Georgia, which replaced the OSCE and UN missions there, does not have access to Abkhazia and South Ossetia. In Nagorno-Karabakh, the parlous state of relations between Armenia and Azerbaijan and the dangers associated with the stalemate there make economic development of the area difficult and remote. There is no doubt that at present, Armenia controls much of Nagorno-Karaba
The remainder of this paper attempts to measure the outcome of the DCFTA, CSDN and EUMM as indicators of the EU’s engagement in the South Caucasus.
Measuring the EU’s Impact: the DCFTA, the CSDN and the EUMM
The Deep Comprehensive Free Trade Agreement (DCFTA)
The World Bank’s World Integrated Trade Solutions (WITS) system allows a direct comparison of a number of trade and development indices. Comparing the foreign trade performance of each South Caucasus country against the performance of the Russian Federation and the year of entry into cooperative agreement (if any) with the European Union, a graphic representation of the impact of the EU’s engagement in the South Caucasus can be made.
Figure 1: Exports in Billions USD Russian Federation
Figure 2: Exports in Billions USD Armenia
Figure 3: Exports in Billions USD Azerbaijan
Figure 4 Exports in Billions USD Georgia
A cursory look at the graphs reveals expected trends in the Russian Federation’s export performance; the Eurasian Economic Union came at a moment when exports were stagnating. These fell dramatically upon the imposition of sanctions, only to increase again from 2017 on. It is interesting to note that exports have begun rising again despite worsening relations between the West and Russia. However, one can scarcely credit the Eurasian Economic Union for this turnaround, for, if we look at Armenia’s performance, it would that it is benefiting greatly from having sided with the Eurasian Economic Union rather than the DCFTA. However, Armenia’s number of export partners has increased by 25 percent between 2013 and 2017 to 107 countries. This increase surpasses many times the number of countries participant to the Eurasian Economic Union (with which it was trading before anyway), so those numbers must be taken with due context in mind.
This judgment is validated by Georgia’s performance; which has plummeted upon signing Association Agreements, only to recover in 2017. The drop which occurred in 2008-2009, which can be attributed (as with the other graphs) to the global recession of that year, seems to have been mitigated by the abundance of foreign aid which followed the attempt at re-integrating South Ossetia in August 2008. The number of Georgia’s trading partners has fluctuated greatly between 2013 and 2017, with Georgia losing and then recuperating new export markets during that period. This ebb and flow corresponds to the country’s fluctuation in export revenues. In any case, the DCFTA should have provided for a more secure trading base, compared to the Eurasian Economic Union.
Azerbaijan’s performance can be taken in isolation. As a non-aligned country dependent mostly on exports of energy commodities, its export returns rise and fall according to market prices. One notes the steep drop after 2014, which corresponds to the moment when Azerbaijan is thought to have reached its peak oil moment. This is despite Azerbaijan increasing its number of export partners by 10 percent between 2013 and 2017. It would therefore seem that non-alignment (along with lack of diversification in exports) is hampering Azerbaijani economic development.
The Civil Society Dialogue Network (CSDN)
Co-financed by the European Union and the European Peacebuilding Liaison Office (EPLO), the CSDN was established in 2010, and its third and final phase will conclude in 2020. It operates in cooperation with the EEAS and the European Commission. Only two years after implementation, a meeting report was stating that the “EU needs to practice what it preaches; engaging civil society is messy but crucial. One way of including civil society is to undertake joint fragility analysis, pulling together academics, UN policy-makers, CSOs (auth: civil society organisations) and think tanks.” When an organisation tasked with linking up with civil society organizations comes up with such conclusions a full two years after being stood up, usually, the results are lackluster. And they are; the CSDN’s outputs are merely reports of strategic-level meetings undertaken on key themes pertaining to civil society, peacebuilding and statebuilding. There is precious little indication of engagement with the South Caucasus in particular. One report is devastating in its honesty; “there is no inevitability of EU engagement in crises.”
During the first phase of the CSDN, there were twelve policy meetings, and six geographical meetings in three years. None focused on the South Caucasus. During the second phase, which lasted from 2013 to 2017, there were fourteen policy meetings, and only three geographical meetings, with only one focusing on the Nagorno-Karabakh conflict. In that report, participants to the meeting underscored that the EU’s policy stance continued to honour the OSCE’s Minsk Group contribution to dialogue, and that the few initiatives supported by the EU in the conflict amounted to people-to-people contacts. There is no evidence that the EU followed up on recommendations from that meeting. The only other activity relevant to the South Caucasus held by the CSDN was a Strategic Review of the EU’s Monitoring Mission to Georgia in September 2015. At time of writing, the third phase of the CSDN is underway, and the only dedicated attention given to the South Caucasus are two further strategic reviews of the EUMM to Georgia. No details pertaining to those strategic reviews are directly available on the EPLO/CSDN website. It is difficult to credit the CSDN with any success in the South Caucasus when one considers that the Armenia-Azerbaijan conflict erupted once again in early April 2016. The fact that the CSDN is piggy-backing on the EUMM as a form of “output” of its own indicates that appetite is lacking for meaningful engagement in the South Caucasus from a peacebuilding perspective.
The EU’s Monitoring Mission to Georgia (EUMM)
The EUMM to Georgia has recently been extended to December 2020, with the mandate, generated in 2008 to ensure stabilisation, normalisation, confidence-building and of informing EU policy. Eleven years since inception, the EUMM’s mandate is valid throughout the legally-defined Georgian territory. However, the breakaway regions of Abkhazia and South Ossetia remain out of reach to the some 320 monitors. While the EU’s presence provides generally-trusted information as to the situation on the ground, there is no denying that the definition of what exactly means conflict stabilization and normalization is deeply prejudicial to the populations under the EUMM’s purview. For instance, one of the tasks of the EUMM is to monitor “borderization” which is a term describing the process of fencing-off of the breakaway regions, creating a de facto physical separation between constitutional regions of Georgia and Georgia proper. There is nothing in the EUMM mandate which forces the EU to act in such circumstances. Worse, the process of “creeping annexation” witnessed in South Ossetia, where the “border” keeps moving southwards towards the Tbilisi-Gori highway has been a constant irritant for the Georgian government over the last decade.
Despite not having access to the breakaway regions, the EUMM has nevertheless established a hotline to report violations of the six points agreement, as well as to report breaches of individual rights which the mission is supposed to monitor. This hotline has generated important data over the last decade which helps demonstrate that on the ground, the situation is far from normalized, and, if anything, increasing in instability. From January to October 2018, the hotline received more than 1780 calls, the vast majority of which were to report borderization activities. An increase in borderization means that the EU’s engagement in Georgia is not attractive enough (especially since Georgia is the only DCFTA partner in the region) to bring Abkhazia and South Ossetia into greater economic integration with the EU through the rest of Georgia. Unwilling to provide more muscular support to Georgia, or sweeter incentives to the Russian Federation or the breakaway regions, the EU’s engagement, although welcome because it is good leverage for EU accession talks, is nevertheless marginal in effect.
Although the EU is the most culturally- and commercially-attractive trading block in the world, it can nevertheless be a political liability for a region like the South Caucasus, whose very existence is a stake in the ambitions of a competing great power such as the Russian Federation, or even that of a fledgling trading block like the Eurasian Economic Union. We have seen above that the EU’s engagement, frequently predicated upon domestic reforms by the targeted countries, doesn’t produce the expected results. The DCFTA for Georgia didn’t produce the steady increase in exports to Euro-paying markets as expected. This may be due to the fact that Georgian policy-making has become more pragmatic, and more atuned to Russia’s weight in the region and the corresponding loss of appetite by the EU and the United States to commit themselves further. Georgia has resumed trading with Russia over certain goods. The accumulation of trade sanctions against the Russian Federation may have had ripple effects on Georgian exports as well. The EU has been unable to bring Azerbaijan closer to integrating its market. Making its own way according to its own choices, Azerbaijan seems to be suffering consequences of its own making as well. Armenia has been lost to the Eurasian Economic Union, and the outcome for that country has been only beneficial.
The EU’s peacebuilding and civil society engagement has been very active, but the outcome is difficult to credit as a success because it has focused so little on the South Caucasus. When it did, such as over Nagorno-Karabakh, it was merely to reiterate the precedence of other international organizations, and the engagement achieved has been too weak to deter Armenia and Azerbaijan from going head-to-head in April 2016. Similarly with the EUMM, whose mandate does not benefit from coercive or compelling support from the EU towards effective stabilization and normalization, one cannot credit the EUMM in Georgia with achieving confidence-building among populations when there is a steady increase in reporting of borderization. All one can say is that each side is using the EU presence for their own benefit.
None of the foregoing suggests ill-will from the EU’s perspective; it must be recalled that the EU’s engagement – even as the expression of a nominally autonomous EEAS – is merely the reflection of the will of its many members. There is no denying that the activities engaged by the EU are executed according to the intentions of the members, and within the mandate alloted. Yet for all that, if the strategic objective was to secure one of the EU’s neighbourhoods, the evidence shows that the level of engagement is not achieving the desired result.
 Joint Declaration of the Heads of State and Government of Germany, France, Luxembourg and Belgium on European Defence. In: Ancuta, C.-R. and Bereschi, Z., eds., European Union Foreign, Security and Defence Policy: Basic Documents. Bucharest: Romanian Institute of International Studies Nicolae Titulescu, 2003, 390.
 Joint Declaration, Op. Cit., 390.
 Javier Solana. A Secure Europe in a Better World: Thessaloniki European Council, 20 June 2003. In: Ancuta, C.-R. and Bereschi, Z., eds., European Union Foreign, Security and Defence Policy: Basic Documents. Bucharest: Romanian Institute of International Studies Nicolae Titulescu, 2003, 267.
 Ibid., 267.
 Elena Mandalenakis. European Union Foreign Policy and Interests in the South Caucasus. In: Felberbauer, E. M., and Labarre, F., Eds.: Building Confidence in the South Caucasus: Strengthening the EU’s and NATO’s Soft Security Initiatives, Vienna: Austrian National Defence Academy, July 2013, 24.
 Esmira Jafarova. EU Conflict Resolution Policy towards the South Caucasus. Connections Quarterly, Summer 2011, 59.
 Mandalenakis, op. cit., 26 and Ibid., 60.
 Ibid., 64.
 Elena Mandalenakis. European Union Foreign Policy and Interests in the South Caucasus. 26-27.
 Ibid., 30. Also: Statement by Bogdan Catalin Udriste, monitor for the EUMM, made at the 15th Annual Conference of the Partnership for Peace Consortium of Defense Academies and Security Studies Institutes, Vienna (Austrian National Defence Academy), 23 June 2015.
 World Bank. World Integrated Trade Solutions (WITS) Comparison of Armenia, Azerbaijan, Georgia and Russian Federation Export in USD Billions (1999-2017) https://wits.worldbank.org/CountryProfile/en/Compare/country/RUS/indicator/XPRT-TRD-VL/partner/WLD/product/Total/country/ARM;AZE;GEO;/show/line# consulted 20 August 2019.
 World Bank. World Integrated Trade Solutions (WITS) Comparison of Armenia, Azerbaijan, Georgia and Russian Federation Export in USD Billions (1999-2017) https://wits.worldbank.org/countryprofile/en/country/ARM/startyear/2013/endyear/2017/indicator/NMBR-XPRT-PRTNR consulted 20 August 2019.
 World Bank. World Integrated Trade Solutions (WITS) Comparison of Armenia, Azerbaijan, Georgia and Russian Federation Export in USD Billions (1999-2017) https://wits.worldbank.org/countryprofile/en/country/GEO/startyear/2013/endyear/2017/indicator/NMBR-XPRT-PRTNR consulted 20 August 2019.
 World Bank. World Integrated Trade Solutions (WITS) Comparison of Armenia, Azerbaijan, Georgia and Russian Federation Export in USD Billions (1999-2017) https://wits.worldbank.org/countryprofile/en/country/AZE/startyear/2013/endyear/2017/indicator/NMBR-XPRT-PRTNR, consulted 20 August 2019.
 European Peacebuilding Liaison Office (EPLO) http://eplo.org/activities/ongoing-projects/civil-society-dialogue-network/, consulted 21 August 2019.
 EPLO. “Peacebuilding and Development”, Civil Society Dialogue Network Meeting, 17 October 2012, Brussels, Belgium, 6. http://eplo.org/wp-content/uploads/2017/02/CSDN_Policy-meeting_Peacebuilding-and-Development_Report.pdf consulted 21 August 2019.
 Laura Davis. “From Combatants to State-builders: Armed Groups in Participatory Peace Processes”, CSDN Policy Meeting Report, 10 February 2012, 8. http://eplo.org/wp-content/uploads/2017/02/CSDN_Policy-meeting_Armed-Grp-PP_Report.pdf consulted 21 August 2019.
 EPLO. “Nagorno-Karabakh: Continuing EU Support for building Peace – Gathering Civil Society Input”, CSDN Geographic Meeting Report 12 May 2015 http://eplo.org/wp-content/uploads/2017/02/CSDN_Geographic-meeting_Nagorno-Karabakh_Report.pdf consulted 21 August 2019.
 See http://eplo.org/activities/ongoing-projects/civil-society-dialogue-network/policy-meetings/ consulted 21 August 2019.
 See Joint Eastern Partnership-EUMM presentation, October 2018 http://eap-csf.eu/wp-content/uploads/Combined-Presentations-EU.pdf consulted 21 August 2019.
 See the excellent report by Gerard Toal (Gearóid Ó Tuathail) & Gela Merabishvili (2019) Borderization theatre: geopolitical entrepreneurship on the South Ossetia boundary line, 2008–2018, Caucasus Survey, 7:2, 110-133, DOI: 10.1080/23761199.2019.1565192 Note also that most reporting of such creeping annexation and borderization is published by neo-conservative think tanks and publications in the United States, such as the National Interest, the Jamestown Foundation and the Heritage Foundation.
 Joint Eastern Partnership-EUMM presentation, op. cit., http://eap-csf.eu/wp-content/uploads/Combined-Presentations-EU.pdf