Sergei Shoigu, the secretary of Russia’s Security Council, warned that Moscow would not only impose hefty tariffs on Armenian products and end energy price discounts but also deport scores of Armenian migrant workers.
“According to the most conservative estimates, leaving the EEU (the Russian-led Eurasian Economic Union) during the negotiation process on joining the European Union will cost Armenia 30-40 percent of its GDP,” Shoigu told reporters in Moscow.
“This will cause critical damage to the country's economy, and the drop in industrial output, contraction of the labor market and growth of unemployment and inflation will lead to a sharp decrease in the standard of living,” he said, according to Russian news agencies.
Shoigu also pointed out that there are hundreds of thousands of Armenian nationals working in Russia and generating most of the multimillion-dollar cash remittances essential for Armenia’s economy. He said that “many of them would have to return home.”
Other Russian officials issued similar warnings even before the Armenian parliament passed in the first reading last month a government-backed bill declaring the “start of a process of Armenia's accession to the European Union.” Deputy Prime Minister Alexei Overchuk described the move as “the beginning of Armenia's withdrawal from the EEU.” He said that the South Caucasus nation risks losing its tariff-free access to Russia’s vast market and having to pay much more for Russian natural gas and foodstuffs.
Armenian officials responded by saying that Yerevan has no plans yet to leave the Russian-led trade bloc. They also said that the bill in question does not amount to an EU membership bid.
The parliament controlled by Prime Minister Nikol Pashinian’s party was due to pass it in the second and final reading earlier this month. But that was postponed for what a senior pro-government lawmaker called “technical” reasons. The date of the final parliament debate on the measure is still not known.
The unexpected delay fueled speculation that Pashinian is having second thoughts about seeking EU membership due to the unfolding thaw in U.S.-Russian relations and the possible freezing of the war in Ukraine which could strengthen Russia’s hand in the South Caucasus.
Pashinian and his entourage first floated the idea of an EU membership bid a year ago amid rising tensions with Moscow. Armenian opposition leaders have described the resulting bill as reckless and warned of its severe consequences for the domestic economy.
According to Armenian government data, Russia accounted for over 41 percent of Armenia’s foreign trade last year, compared with the EU’s 7.7 percent share. Armenia also buys the bulk of its natural gas from Russia at a price that is set well below international market-based levels.
