The Government of the Republic of Armenia

In the Foreign Affairs Committee of the European Parliament

Honorable President;
Esteemed Members of the European Parliament,
Ladies and Gentlemen;

I am greatly honored today to address the Foreign Affairs Committee and grateful to the European Parliament for organizing this meeting.
Any question that is on today’s agenda must be viewed in the context of the recent developments taking place in the world.
1. What force is driving the current turbulence, crises, and conflicts in the Middle East and North Africa? The answer is simple - people want change.
2. We know from history, however, that not all changes yield the desired goal.
3. I believe, therefore, that the success of fundamental change depends on the ability to collectively formulate goals and to secure the people’s engagement in the process of achieving them.
4. The experience of European states clearly demonstrates the effectiveness of democratic institutions in accomplishing this, while respecting the fundamental right of freedom of expression and the importance of pluralism and public debate.
5. Armenia has consciously chosen the European path of development. Our choice stems from the shared Christian roots of our heritage and the decision to move away from our past under authoritarian regimes. The centuries-old legacies of the Ottoman Empire and Soviet Union have fundamentally shaped our social behavior.
6. Democratic reforms do have the potential to change behaviors, and they start with improving the electoral process, strengthening protection of property rights, safeguarding judicial independence, and promoting the emergence of a middle class - a class of economically and socially responsible voters and citizens.
7. However, there is still a gap between the values and aspirations declared by Armenia and our present reality.
8. In today’s world, change happens more quickly than ever. Armenia, therefore, has to accelerate the implementation of reforms and of institutional transformation. It has now become clear that the technical assistance and financial support of the European Union will be crucial, in ensuring fast and substantive progress.
9. In this context, the Eastern Partnership offered by the EU is a vital tool that can boost the transformation process. We reiterate our gratitude for the offer, and our intention to further develop our economic and political integration with the Union. We are currently negotiating an Association Agreement with the EU. We are working to launch talks about a Deep and Comprehensive Free Trade Agreement with the EU.
9.1 Thanks to the EU’s assistance, we have already implemented a number of important projects. In particular, we succeeded in establishing a strong and independent Ombudsman in Armenia. We introduced e-governance to all structures of the Armenian Government and an electronic tax-return system, an important tool for improving the business environment and reducing corruption risks. Two other important projects - Support to Justice Reforms and the Support for Access to Justice in Armenia – are currently under way. The assistance of the EU and the expertise of its Advisory Group were especially instrumental in implementing economic and judicial reforms in Armenia.
10. On the downside, our reform potential is seriously undermined by real geopolitical risks that continue to mar the South Caucasus.
Firstly, Azerbaijan’s hostile rhetoric, uncontrolled military spending, and explicit desire to resolve the Nagorno-Karabakh issue by means of war, further escalate the political tension in the region.
Secondly, the continuing blockade of Armenia by Turkey sharply reduces the possibilities of diversifying the Armenian economy. Turkey’s ambitions in our region negatively influence the peace talks on the Nagorno-Karabakh conflict, contributing to the delay of its settlement.
Finally, with no intention at all to question the EU efforts aimed at maintaining international peace and stability, I want to draw your attention to the fact that the international sanctions against Iran are, in fact, challenging our potential for economic growth. Other than Iran, the only corridor that today connects Armenia to the rest of the world is through Georgia. The tragic events that occurred in our region in August 2008 revealed the vulnerability of the Armenian economy caused by overdependency on a single transport corridor. At the time, we survived only by arranging the transport of essential commodities via Iran. The tightening of sanctions sharply reduces the availability of this corridor, while our joint efforts with the EU to open the Turkish border have failed.
11. The potential of dormant conflicts to reemerge in the South Caucasus can only be reduced by building a common platform of values. Turkey, Azerbaijan, Georgia, and Armenia all claim to be on the European path of development. We clearly recognize that effective reforms along this path will contribute to regional security and cooperation. The only viable option for the countries of our region should be based on values such as mutual trust, tolerance, and solidarity, all of which are among the cornerstones of modern Europe.
12. The global crisis has brought to light the fundamental problems of our country: insufficient diversification of the economy, an ineffective public administration system, and unequal conditions for competition. In addition, the economic crisis has affected a rise in poverty, an increase in external public debt, and high inflation. All of these factors have reduced our potential to implement reforms. However, the European Union has provided considerable support in overcoming the aftermath of the global financial crisis.
Dear colleagues,
13. I would now like to present our institutional reform agenda in a few short points.

• Strengthening democratic institutions is at the top of our agenda. The existence of strong democratic institutions, an active civil society, freedom of expression and fair representation are vital in maintaining political stability.
•  An independent judiciary can safeguard democratic rights and freedoms and promote entrepreneurship.
• Education sector reform is the most effective way to increase intellectual potential and to accelerate changes in societal behavior. A modern society cannot be built without modern universities.
•  A level playing field is a must for a functioning market economy. Competition is impossible without tax and customs reforms.
• Corruption and ineffective public administration are serious barriers to the implementation of reforms. For this reason, we have adopted the Anticorruption program and are in the process of creating a Disclosure of Conflict of Interest legislation.
•  A reliable social welfare program should generate adequate health care, a sound pension system and help reduce poverty and unemployment.

14. We clearly understand that delays in the implementation of reforms undermine confidence in our government. We can only boost confidence by taking effective measures in this respect. I am certain that the EU’s support will be essential for Armenia to take bold steps in this direction. It will enable us, among other things, to manage risks and ensure macroeconomic stability.
15. To summarize, dear colleagues, our current situation clearly requires radical change and bold initiatives. The European Union has an important role in sustaining peace and stability in the South Caucasus by means of more active engagement in the region through stimulating and supporting reforms. Armenia needs the financial and intellectual support of the donor community to fill the existing gap between our reform potential and our declared values. With the leadership of President Serzh Sargsyan, Armenia has the political will to speed up the reform process. Hence, we remain committed to further active and fruitful engagement with the European Union.