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Opinion: “Europe’s ‘golden reserve’?” – Azerbaijan ousted from PACE but remains a strategic partner


Relations between Azerbaijan and the EU

Relations between Azerbaijan and the EU

At a meeting in Baku, the Italian president said Italy fully supports Azerbaijan’s cooperation with the European Union and considers Baku a reliable partner. Hungarian Prime Minister Viktor Orbán, meanwhile, called Azerbaijan the EU’s “golden reserve.”

These statements came as Azerbaijan was suspended from the Parliamentary Assembly of the Council of Europe. Open backing from Italy and Hungary shows that Azerbaijan is not isolated at the European level. On the contrary, due to energy and geopolitical interests, the country’s ties with Europe continue to expand.

Observers say this support could lay the groundwork for Azerbaijan’s eventual return to PACE, as key EU states are not interested in a complete cutoff and instead regard Azerbaijan as a strategic partner.

Italian President Sergio Mattarella’s visit to Baku | Photo: president.az
Italian President Sergio Mattarella’s visit to Baku | Photo: president.az

Exclusion from PACE

Since January 2024, PACE has refused to recognise the credentials of Azerbaijan’s delegation. The Assembly noted that over 20 years of membership, Azerbaijan had “failed to fulfil its core obligations,” citing “serious concerns” over the conduct of democratic elections, and the independence of its legislature and judiciary.

PACE also recalled past resolutions condemning the blockade of the Lachin corridor during the Nagorno-Karabakh crisis and the September 2023 military operation, highlighted human rights issues, and stressed Azerbaijan’s low level of cooperation with the Assembly.

In response, Azerbaijani authorities accused PACE of applying “double standards,” calling the decision “biased” and accusing the Assembly of “Azerbaijanophobia and Islamophobia,” announcing the country’s withdrawal from the organisation.

Baku emphasised that, following the restoration of Azerbaijan’s territorial integrity, such PACE statements are “pointless and reveal double standards.”

Message from Italy to Baku: could Azerbaijan return to PACE?

At a meeting in Baku, Azerbaijani President Ilham Aliyev and Italian President Sergio Mattarella made joint statements to the press. Mattarella emphasized that “Italy fully supports the strategic partnership with Azerbaijan” and noted that cooperation goes beyond the economic sphere.

He said collaboration should expand into energy, transport, education, and culture.

The Italian leader highlighted Azerbaijan’s role in the Trans Adriatic Pipeline (TAP) project and pointed out that Italy is a major importer of Azerbaijani oil. He also stressed that Italy would take concrete steps to deepen its relations with the European Union:

“Azerbaijan is a highly respected partner, and the EU recognizes this. Our cooperation will cover new areas and serve the well-being of our peoples. This is precisely why I came to Baku.”

Hungarian Prime Minister’s Remarks

Hungarian Prime Minister Viktor Orbán visits Baku | Photo: president.az
Hungarian Prime Minister Viktor Orbán visits Baku | Photo: president.az

Hungarian Prime Minister Viktor Orbán said Europe is facing serious challenges in energy security, while Azerbaijan has both rich natural resources and stable, strong leadership.

Orbán’s description of Azerbaijan as a “golden reserve” is more than a compliment; it reflects Europe’s reality. The EU is seeking to reduce dependence on Russian gas and diversify suppliers, with Azerbaijan emerging as a key alternative.

Hungary has strengthened cooperation with Baku in the gas sector in recent years, seeing it as critical for national security. By highlighting Azerbaijan’s “stable leadership,” Orbán frames its political model as a convenient partner for Europe, contrasting with criticism of Baku in the PACE and European Parliament over human rights issues.

The statements by Orbán and Italian President Sergio Mattarella reveal divisions within the EU: some institutions focus on democracy and human rights, while others prioritise energy and security concerns. Hungary’s position clearly reflects the latter, limiting Azerbaijan’s isolation in Europe.

Away from PACE, but close to Europe?

After PACE refused to recognise Azerbaijan’s delegation, questions arose about its future ties with European institutions.

However, statements from Italy’s president may signal a new phase in Azerbaijan–Europe relations. Such political support could reopen discussions on restoring links with PACE. Italy, a leading EU country, portrays Baku as a strategic partner and openly advocates deepening cooperation.

This highlights Europe’s “values versus interests” dilemma. On one hand, Azerbaijan remains excluded from the Council of Europe, with ongoing human rights concerns. On the other, it is seen as a key partner for energy security and stability in the South Caucasus.

Italy’s support suggests that at least part of the EU prefers to see Baku not “on the sidelines,” but as an integral member of the European family.

Mattarella’s message in Baku carries weight for both energy security and diplomacy, and could mark an important step toward strengthening Azerbaijan’s European ties and potentially restoring relations with PACE in the coming years.

EU’s dilemma: values versus interests

Europe’s approach to Azerbaijan reveals a clear paradox. While Brussels officially champions democratic values, energy and geopolitical interests continue to drive closer cooperation with Baku.

Following the energy crisis of summer 2022, the European Commission signed a gas agreement with Azerbaijan: supplies to Europe were set to double, and the Southern Gas Corridor expanded to meet continental demand.

Though motivated by economic concerns, the EU’s pivot toward Baku drew criticism. The European Parliament and international NGOs highlighted Azerbaijan’s human rights issues, arguing that large-scale energy cooperation was inappropriate.

In October 2024, the European Parliament called for reducing dependence on Azerbaijani gas and suspending the 2022 memorandum. This reflects a split within the EU: energy security bodies clash with those prioritising human rights.

At the same time, EU leaders have not always unambiguously supported Baku. In early 2024, President Ilham Aliyev hinted that Azerbaijan might take tougher measures if Armenia failed to meet obligations on border delimitation. Josep Borrell condemned these statements, warning that unilateral force could trigger “serious consequences,” from political and diplomatic sanctions to limits on cooperation. Azerbaijan’s foreign ministry accused Borrell of “grossly distorting the facts.”

These disputes illustrate Europe’s dual approach: promoting conditions for peace while offering Azerbaijan strategic partnership. The EU is attempting to reconcile democratic principles and reform demands with practical interests in energy and trade.

As a result, this policy is often seen as “two-faced”: PACE and the European Parliament criticise pressure on civil society, while countries like Italy and Hungary emphasise strategic cooperation with Baku.

A new diplomatic model and its consequences

Azerbaijan has recently been pursuing a multi-vector diplomatic approach in its relations with the West. Baku’s activity is increasing at the UN, at the COP29 climate conference, and in regional organizations, while the focus has shifted from EU institutions to direct intergovernmental cooperation.

Analysts note that “EU–Azerbaijan relations are driven less by formal political alignment than by geo-economic interdependence.” So far, Azerbaijan has officially stated it does not intend to join the European Union. Cooperation is largely limited to strategic projects in energy, transport, and trade.

Over the past 15 years, the EU has become Azerbaijan’s largest trading partner, accounting for over 50% of total trade, making Baku even more dependent on Europe than some neighbors with formal integration, including Georgia.

Some results of this approach are already visible. Azerbaijan has strengthened its international standing, expanded strategic partnerships with China and the US, and hosted summits with Turkic-speaking countries as well as Turkey–Pakistan meetings. In Europe, Estonian Prime Minister Kaja Kallas’ visit this year demonstrated Brussels’ recognition of Baku as a strategic partner in energy and security. Projects such as the Southern Gas Corridor and the Middle Corridor are also attracting European investors; at the EU–Central Asia summit, €12 billion was allocated for Middle Corridor development, creating a basis for infrastructure renewal.

At the same time, this model carries risks. By distancing itself from Western values, Azerbaijan could face pressure from Western institutions in the future. Already, the European Parliament has called for reducing dependence on Azerbaijani gas, and human rights groups have appealed to UN bodies regarding political prisoners. While asserting regional leadership, Baku must balance relations among the major global powers.


Categories
South Caucasus News

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South Caucasus News

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South Caucasus News

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South Caucasus News

Armenians’ living standards unchanged amid rising incomes and high inflation


Rising incomes and high inflation

Rising incomes and high inflation

At the start of the year, the average monthly salary in Armenia reached about 280,000 drams ($737), a 4% rise compared with 2024, according to the Statistics Committee. Wages grew faster in the public sector (up 5%) than in the private sector (up 3.5%). Average salaries stood at 218,981 drams ($576) in state institutions and 301,982 drams ($795) in private companies.

The highest salaries are in communications, IT, mining, finance, insurance and entertainment, while the lowest are in agriculture.



Rising wages, rising costs

Susanna Markosyan, an accountant in the telecoms sector, saw her salary rise by 11% in 2024. But at the same time, mandatory deductions — income tax, a “military stamp duty” to support servicemen and their families, and trade union fees — also went up.

“On paper, 11% is a significant increase. But after mandatory payments, the real growth was just 7%. It hasn’t improved my well-being in any way,” she says.

“In the past, even a 5% rise allowed me to rent a better flat, buy household appliances over the year, and afford other expenses.”

Markosyan believes Armenians will only feel a real improvement if wages grow by around 20%. Otherwise, she says, higher pay is quickly swallowed up by rising everyday costs.

She points to higher transport fares and waste collection fees:
In my company I also have to pay 90,000 drams [$237] a year for compulsory health insurance. Food, clothes and services have all become more expensive. I live alone and often eat out, and I can confidently say life is about 30% more expensive than last year. I’m forced to cut back.

She argues that public sector salaries should be adjusted for inflation — a step that would also affect private employers:
“My company’s management raises wages at their own discretion. There is no clear regulation or mechanism to determine who gets a raise and by how much.”

According to Markosyan, some regular adjustments are made in telecoms, finance and services, but they remain insufficient:
“Another problem is that these rises are not enough to motivate staff or encourage their professional growth. If a salary increase does not improve an employee’s quality of life, they start looking for a new job, for other opportunities. In recent years I have seen many colleagues leave once they found better conditions elsewhere. Salary remains the main motivation — and when people put all their energy into their work but feel no reward, sooner or later they will walk away.”

How much have prices increased for goods and services?

According to Armenia’s Statistical Committee, the consumer price index rose by 3.2% in January–August 2025 compared to the same period last year.

The sharpest increases were seen in basic consumer goods, meaning inflation has affected all social groups.

Prices in the restaurant and hotel sector rose more modestly, by 1.8%.

Food and non-alcoholic drinks went up by 5.1% year-on-year. Within this category, beef prices rose by 10.3%, pork by 2.5%, and chicken by 1.5%.

Sunflower oil increased by 16.8%, other oils by 12.8%, flour by 7.2%, chocolate by 9.4%, ice cream by 9.7%, coffee by 13.5%, and cocoa by 22.5%.

Sugar rose by 7.5%, vegetables by 3.6%, and fruit by 11.6%.

Alcohol and tobacco prices increased by 5.5%.

Healthcare services were up 3.5%, while education saw a record rise of 7.8%.

“Indexation is mandatory for all income”

Economist Aram Margaryan says that, according to official statistics, wages have risen roughly in line with consumer prices:

“This is a standard practice worldwide, known as wage indexation. But it should apply not only to salaries, but also to other social payments — pensions, benefits, and other government support programs. Otherwise, even small price increases hit vulnerable groups hard.”

He notes that officials often announce wage increases without taking inflation into account:

“Talking about higher salaries without mentioning inflation is political manipulation. Yes, wages are rising in almost every sector. But this doesn’t translate into real improvements. Education, transport, leisure services don’t change. The only noticeable difference is the quality of services provided.”

Margaryan explains this trend by pointing out that rising incomes are mostly spent on services — restaurants, hotels, and beauty salons:

“To truly improve living standards, financial literacy is more important than income alone. If a person cannot manage their finances effectively, a salary increase of 30–40,000 drams [$80–105] won’t change their quality of life. People have different ideas of what improving quality of life means. For some, it’s more seafood or expensive foods; for others, cultural activities; and for many, a combination of all this and more.”


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South Caucasus News

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