BACKGROUND: The European Union’s relationship with the South Caucasus has been perplexing for several years. European states, individually and collectively, are significant donors to the South Caucasus: a billion Euro worth of aid has been allocated since the early 1990s, with little to show for it. In fact, European policy in the South Caucasus has been characterized variously as a “costly failure” or as a policy of “splendid isolation”. Other European multilateral organizations such as the OSCE, the Council of Europe, and increasingly NATO (mainly through its Partnership for Peace Program), have been considerably involved in the region. In spite of its aspirations to a role as a global actor stated in its Security Strategy, the EU has nevertheless chosen not to engage the South Caucasus in a meaningful way. While individual member states and EU institutions have made occasional pushes for a greater EU role (most obviously the European Parliament’s request for a EU strategy toward the region) the lack of strategic vision was best illustrated by the decision in March 2003 to leave the South Caucasus outside the European Neighborhood Policy (ENP). This in spite of the equally significant challenges to European security, as well as European interests, in this region compared to other areas included in ENP such parts of North Africa and the Eastern Mediterranean; and in spite of the institutional connection of the states of the South Caucasus to the European family of nations, primarily through membership in the Council of Europe and NATO’s Partnership for Peace program – which other states included in ENP do not have. The South Caucasus was left out mainly because no influential member state was arguing the case of including the region. This is not for a lack of actual, discernable European interests; in fact, the EU faces obvious challenges but also opportunities in the South Caucasus. Among the former, the rise of transnational organized crime ranks high, as do issues of extremism and terrorism, the unresolved ethnic conflicts with their potential danger of conflict and migration flows, regional arms races, and environmental concerns. Opportunities center mainly on the energy resources of the region and the role of the South Caucasus as both a source area and transit corridor for oil and gas supplies to Europe, which remains heavily dependent on Persian gulf oil and Russian gas supplies. The building of the South Caucasus as a hub of trade between Europe and Asia was acknowledged by the EU in the early 1990s through the TRACECA project. However, TRACECA is cash-starved and inactive in spite of its promise and the interest of regional states.

IMPLICATIONS: In Summer 2003, in a move to rectify the mistake of leaving the South Caucasus outside the ENP, the EU appointed a Special Representative to the South Caucasus, the Finnish Diplomat and former co-chair of the OSCE Minsk Group Mr. Heikki Talvitie. The Special Representative’s mandate is limited, however, and the distribution of duties among EU agencies and between them and the Special Representative is unclear. In the past, the interest of the individual member state holding the rotating presidency of the EU seems to have been a determining factor. Some states, such as Finland, Sweden and Greece, made the South Caucasus a priority on their agenda; others did not, taking away coherence in the EU’s approach to the region. The appointment of a Special Representative was thought to reduce this problem, which would nevertheless require a stronger mandate. In mid-June 2004, the EU is likely to reverse its exclusion of the South Caucasus from ENP. Instead of being literally a footnote, its is expected that the EU will include Armenia, Azerbaijan and Georgia into the main instrument of EU relations with its periphery. This is a welcome development, but questions remain as to whether this means a true EU engagement is forthcoming. In fact, the EU faces a host of problems in trying to formulate a policy toward the region. Firstly, the South Caucasus is likely to continue to be a backburner issue given the large issues looming over the Dutch presidency of the EU in the remaining half of 2004. The debate over the EU’s Constitution is likely to remain a major internal issue; while the question of whether to grant Turkey a date for accession talks could well dominate the EU’s external relations. Transatlantic and trade relations and the unrest in the Middle East and Iraq are other issues that rank higher than the South Caucasus in priority. Secondly, while trying to find a role for itself in the South Caucasus, the EU is entering a crowded scene. A host of multilateral organizations are already at work, whether successfully or unsuccessfully. Individual states, including EU member states, are other actors on the scene. Both member states and other organizations can pose diplomatic challenges to an increased EU role, especially in conflict resolution; the French role in the OSCE Minsk group illustrates both of these problems simultaneously. EU member states already form a large majority of the members in most international organizations active in the South Caucasus, including the Council of Europe, the OSCE, or NATO. In this context, the specific role that the EU as an organization could play remains to be determined; if not, the EU may only play a coordinating role among its member states within these other organizations with more specific mandates. Finally, the basic internal problem that the EU faces vis-à-vis this region has not changed: there is no driving force for the formulation and implementation of EU strategy or EU priorities in the South Caucasus. If both North Africa and the Western CIS have obvious sponsors within the EU, this is not the case for the South Caucasus. It is telling that the EU presidencies which have done the greatest impact on the region have been those of smaller EU members.

CONCLUSIONS: The inclusion of the South Caucasus in the European Neighborhood Policy is a positive development. Rather than being hailed as a success, however, it should be seen as an overdue correction of a strategic mistake. It now remains for the EU to outline a strategic vision for its relationship with the states of the South Caucasus and of its own role in that region. This process is likely to be gradual and unhurried. The EU is still in need to be thoroughly convinced that it is in the collective and individual interest of its members to engage with the South Caucasus. For a more coherent EU role to appear, a stronger institutional or national driving force within the union will likely need to emerge. Unless that happens, the great potential that the EU countries could potentially exercise to bolster the security and development of the South Caucasus – and thereby improve its own security – will remain unfulfilled.

AUTHOR’S BIO: Svante E. Cornell is Editor of the Central Asia-Caucasus Analyst and Deputy Director of the Central Asia-Caucasus Institute, Johns Hopkins University-SAIS, as well as Research Director of the Silk Road Studies Program, Uppsala University.