How lucrative is the EU prize? Armenia’s bet after Iceland’s refusal

 

Yerevan, driven by the trauma of the 2020 war and the 2023 loss of Nagorno-Karabakh, is rowing towards a harbor whose lights are visibly dimming

Amitabh Singh

The Hindu

Two small nations moved in opposite directions in the last week of August. On August 24, Prime Minister Nikol Pashinyan told Armenia’s parliament that his government would formally apply for European Union membership “in the near future”, with a referendum to follow, and declared that Yerevan would “welcome” its own expulsion from the Russian-led Collective Security Treaty Organisation. Five days later, Icelanders voted 52.8% to 47.2% against even resuming accession talks with the same union. One small state is fleeing towards Brussels; another, far wealthier and safer, has just declined the same door. The juxtaposition forces the question Yerevan has not yet honestly asked itself: how lucrative, really, is EU membership for Armenia?

Reykjavik’s refusal

The Icelandic verdict deserves close reading in Yerevan. The ballot asked only whether or not Iceland should resume the accession negotiations it suspended in 2013 — actual membership would have required a second referendum years later. Even that modest step was rejected: 1,18,040 votes to 1,05,339, on an exceptionally high turnout of 82.5%, with only the two central Reykjavik constituencies voting in favor. The government had framed the vote as a “now or never” moment, presenting membership as a shield against trade wars and Arctic rivalry. Yet despite direct great-power pressure over Greenland, the security argument lost to sovereignty over fisheries and the cost of living. The result is technically non-binding, but the government has promised to respect it, and officials concede the question may now be settled “for a generation”.

The lesson is uncomfortable. Here was a near-ideal candidate — prosperous, democratic, already inside the European Economic Area — offered what would have been a fast track to membership. Its voters still calculated that the costs in sovereignty exceeded the gains in prosperity and security. The European offer, in other words, is no longer self-evidently lucrative even on Europe’s own doorstep.

The Brexit shadow

Iceland’s “no” does not stand alone. A decade ago, Britain voted 52% to 48% to leave the European Union, and in 2020, it actually departed — establishing the precedent that membership is reversible and that a major economy can judge the club’s benefits not worth its constraints. Years of subsequent debate over trade friction, lost investment, and sluggish growth have kept alive the argument that Brexit was costly; but the political fact remains that the single market could not hold its fifth-largest economy. If Brussels’s economic magnetism failed to retain Britain, enlargement rhetoric should not blind Yerevan to how much weaker that magnetism has become.

Both episodes share a deeper pattern that Armenia must note. Referendums on Europe are volatile, decided by narrow margins — 52-48 in Britain, 52.8-47.2 in Iceland — and are won on identity and sovereignty rather than GDP arithmetic. Armenia’s own plan places precisely such a referendum at the end of the process: application first, then Brussels’s response, then a negotiated road map, and only then a national vote. The final verdict on this historic pivot will rest with an electorate fully capable of doing what the British and Icelanders did.

The offer and the price

Measured soberly, what Brussels offers Armenia today is modest and distant. There is no membership perspective with a date; there is a process measured in decades. Candidate status, as Georgia’s experience shows, can be granted with ceremony — as in December 2023 — and frozen within a year, with Tbilisi’s ruling party halting accession work until the end of 2028 and the European Commission now reportedly regarding Georgia as a candidate “in name only”. EU friendship brings grants, the prospect of visa liberalization, regulatory alignment and political association. It does not bring soldiers, security guarantees or protection of territory — a fifth of Georgia’s land remains occupied despite every European declaration.

The price of admission, by contrast, is immediate and payable to Moscow. In 2025, 37.5% of Armenia’s trade was with the Eurasian Economic Union — Russia alone took 35.8% — against just 11.7% for the entire EU; exports ran $3.22 billion to the EAEU against $667 million to the Union. Some 82% of Armenia’s gas arrives from Russia at $177.50 per thousand cubic meters, a third of European prices, through a distribution network owned by Gazprom. The national railway remains a Russian Railways concession until 2038, the Gyumri military base is leased until 2044, and Moscow has demanded Yerevan choose by December — EU or EAEU — in a referendum. The ledger, then, is stark: the certain and immediate loss of market access, cheap energy, and residual security cover, weighed against contingent benefits that arrive slowly and exclude the one thing Armenia needs most. On pure economics, the option is not lucrative. Its value is strategic and civilizational — a far harder sell at the ballot box.

A gamble, not a windfall

The neighborhood compounds the risk. As Russia recedes and Iran — which calls any change to its border with Armenia a red line and opposes an American presence under the Trump Route for International Peace and Prosperity — watches warily, the vacated space is being filled by Turkey and Azerbaijan, Armenia’s historic adversaries. The peace treaty with Baku remains unsigned pending constitutional changes, with 2027 the earliest realistic date, and the 42-kilometre Zangezur road through Armenian territory is still at the engineering-survey stage. Ukraine stands as the permanent warning of how Moscow responds when a former republic walks west. And the referendum Armenia has promised could easily replicate Iceland’s near-even split — except that in a country of three million ringed by rivals, such division is not a generational pause but an existential vulnerability.

How lucrative, then, is EU membership for Armenia? Iceland answered from safety, wealth and NATO membership: no. Britain answered from inside the club: leave. Armenia, driven by the trauma of the 2020 war and the 2023 loss of Nagorno-Karabakh, is rowing towards a harbor whose lights are visibly dimming. The crossing may still be worth making — but Yerevan should be honest with itself that it is buying insurance, not treasure. The premiums fall due immediately, in Russian gas, trade and troops; and the payout is one that Brussels, as Reykjavik has just reminded the world, cannot even guarantee its own admirers will accept.

Amitabh Singh is an Associate Professor at the Centre for Russian and Central Asian Studies at the School of International Studies, Jawaharlal Nehru University.