Head of the European Union (EU) Delegation to Azerbaijan, the ambassador Peter Michalko’s interview with APA.
– Mr. Ambassador, before your appointment to Azerbaijan, you were Head of the EU Delegation to Moldova, a participant country in EaP and now you are in Azerbaijan which is also an EaP member. From experts, we always hear that in the EU's neighborhood policy these six countries have different aspirations about the EU. How would you compare Moldova and Azerbaijan in this regard?
– First of all, let me thank you for this opportunity - interview. This is the first time that I give an interview to the Azerbaijani mass media. As still a newcomer to your beautiful country, I would like to express my gratitude for the very warm welcome that I have received from people in Azerbaijan. For me, it is a great honor to serve as an EU Ambassador here to work for the progress of relations and cooperation between the EU and Azerbaijan.
As you know, in the framework of Eastern Partnership (EaP) we are developing cooperation with the partner countries taking into account also their ambitions and aspirations. The EaP summit in 2017 acknowledged European aspirations and European choice of those partners and the partner countries decided to have an Association Agreement with the European Union. In this regard, EaP has also been led by principles of strengthened differentiation while preserving the inclusivity of the Partnership. The scope and depth of cooperation are determined by the EU and partners' ambitions and needs as well as the pace and quality of reforms. On one hand, some partner countries decided to go towards an Association Agreement and that is bringing a perspective for a certain level of cooperation but this also means that with other partners we develop other levels of cooperation.
In many cases, the same fields are covered and this concerns the bilateral and multilateral dimensions of the EaP. As you know, we originally started to develop our relations with partner countries on the basis of the Partnership and Cooperation Agreement in the 1990s and currently, we are in the phase of concluding negotiations on a new generation agreement that will correspond to the requirements of our relations and cooperation in the new era. With Azerbaijan, we cooperate on the basis of this Partnership and Cooperation Agreement that has been in force since 1999 and provides a framework for appropriate political dialogue and development of political relations but also supports every effort of Azerbaijan to consolidate its democracy and develop its economy to promote trade and to complete the transition to a market economy.
Azerbaijan has chosen not to sign an Association Agreement but we are in the process of finalizing negotiations on a new comprehensive Agreement that will be designed to enhance political dialogue, trade, and mutually beneficial cooperation in many fields and will correspond to new conditions in today's world. There are many similarities among partner countries. I do not want to compare because each partner country is an important partner for the EU together with the specificities of the relationship. Each partner country has strong aspects for its relationship with the EU and we are building strong partnerships with all of them. For example, when we speak about trade relations, the EU is the largest trade partner of Azerbaijan. We are also the largest market for the export of goods produced in Azerbaijan and this tendency is growing. The EU is also the largest source of investment to Azerbaijan.
– Azerbaijan and the EU have not yet signed a new strategic partnership agreement despite optimism. Is there any development on that?
–Well, as you know these negotiations are part of a process we are working on intensively and I hope progress will soon result in the conclusion of the negotiations on the new agreement.
– The strategic dimension of the partnership between the EU and Azerbaijan was not quite visible or may not have been highlighted enough. When the European Council President was in Baku he mentioned a more strategic dimension of the partnership and its strengthening. In the near future, what kind of policy can we expect the EU will follow to achieve this?
–There are many fields that our cooperation and relations cover and together they form the strategic dimension of our partnership, the strong partnership that we are building. This is also reflected in the negotiation process for the new agreement. This is also reflected in our ongoing cooperation that is taking place on the basis of the current framework of our relations but that is updated for example through partnership priorities and through ongoing cooperation in fields that are important, including political dialogue and dialogue on sectoral policies. Energy is an important part of those. Our dialogue is also structured on the basis of the current legal framework, featuring meetings of the EU-Azerbaijan Cooperation Council and Cooperation Committee.
This also encompasses the parliamentary dimension of the dialogue, completed by the EaP dimension. There is a governmental pillar, there is a parliamentary pillar and there is also the third pillar in the form of civil society cooperation. So, from this point of view, the overall importance of the strategic character of relations is strengthened with an intensive dialogue. And that is reflected by the strengthening of respective fields of cooperation, such as trade and investment.
– The EU Enlargement and Neighbourhood Commissioner Varhelyi presented an Economic and Investment Plan for the EaP region. In the financial support package for the EU’s six post-Soviet Eastern Partnership countries, Azerbaijan is less benefited compared to others (not considering Belarus). In fact, this disparity raised eyebrows in Azerbaijan...
– EaP has brought and continues to bring tangible benefits both to our Eastern partners and to the EU. At the upcoming EaP Summit, it is expected that the Economic and Investment Plan will be endorsed and in this context, the European Commission will mobilize up to 2.3 billion euros of funding from the EU's budget for investment for the entire region of the Eastern Partnership. I underline that this is for the entire region over the next five years. And these resources, destined for the entire region, could lead to or leverage investment of up to 17 billion euros in public and private investment across the entire region and will be available on the basis of "the first come first served” basis, including for Azerbaijan.
Main areas of investment in Azerbaijan are expected in areas such as green energy and connectivity, including digital connectivity, economic development, and support to small and medium-sized enterprises as well as rural development. There is a lot of potential for cooperation between the EU and Azerbaijan that we should also explore together with international financial institutions, such as the European Investment Bank and the European Bank for Reconstruction and Development that are interested in developing further opportunities of cooperation in the framework of the Economic Investment Plan. Recently a conference was organized in Baku by EU officials from the European Commission, including Brussels, the European Investment Bank, the European Bank for Reconstruction And Development, and other financial institutions.
The conference dealt with issues dedicated to blending with a focus on the use of all available financial instruments. This is a new phase that we are opening now and which goes beyond the current level of cooperation. Blending means combining various financial instruments, in particular grants, loans, and guarantees. Exactly now we are in the phase of exploring this perspective and matching it with the needs of Azerbaijan, its plans in terms of the development of the needs of the country. I hope that we are going to see a very high level of support for Azerbaijan through these financial instruments.
– EU officials underline the readiness of providing assistance to the sides - Azerbaijan and Armenia on the question of demarcation of borders, sharing its experience, Mr. Ambassador, can you please elaborate on this, what kind of assistance the EU suggests?
–Conflicts in the South Caucasus continued for many years. There is an accumulated memory of distrust. A conflict cannot be resolved in a simple manner and dialogue and cooperation between the sides are needed. For more difficult conflicts, larger formats with the involvement of a diverse range of actors may be needed. The European Union is committed to working with partners to overcome tensions and work towards a secure, prosperous, and stable South Caucasus. We are ready to contribute to areas where we can support important issues, such as demining. The EU is the largest contributor to the UNDP in supporting ANAMA’s efforts for demining.
We can also provide support to other issues, where we have specific expertise, such as border delimitation/demarcation but there are also broader issues related to economic cooperation and regional cooperation where the EU has a lot of experience. Therefore, we are interested in being involved in this and helping reach the objective I have mentioned before, which is a peaceful, stable, and prosperous South Caucasus. The EU has the experience to support the stabilization of conflicts in various regions. The EU itself is also a peace project that appeared after the tragedy of WWII in Europe. In this regard, the EU supports activities aiming to achieve stabilization and prosperity elsewhere. You can also see this from the involvement of the EU in dialogue with its partners. You could also see throughout this year how intensive the EU’s dialogue with Azerbaijan has been.
The President of the European Council, Mr. Michel, visited Azerbaijan in July this year. The European Commissioner for Neighbourhood and Enlargement Policy, Mr. Varhelyi, also visited Azerbaijan in July and three Ministers of Foreign Affairs visited the country this year on behalf of High Representative Mr. Borrell, in addition to which the EU Special Representative Mr. Klaar regularly visits the region. A number of other examples of bilateral dialogue, including at the parliamentary level and also on the level of the civil society show there are a lot of ongoing contacts. Moreover, recent high-level phone contacts between President of the European Council Charles Michel and President of Azerbaijan Ilham Aliyev and Prime Minister of Armenia Nikol Pashinyan show that there is also a continued interest from the EU side. There is a possibility to contribute to stabilization and positive development.
– It is a fact that the post-conflict period in the Caucasus is not calm. We heard reports about border clashes between Azerbaijan and Armenia just several days ago. The European Council President Michel had phone calls with leaders of both countries and announced that leaders of Azerbaijan and Armenia had agreed to meet in Brussels but before this upcoming meeting the two leaders met in Sochi, Russia. According to some experts, the meeting in Russia is a real one, the one in Brussels more nominal. It would be interesting to know your view as an EU representative...
– As you said, the meeting in Brussels was announced after the phone calls of the President of the European Council with the President of Azerbaijan and the Prime Minister of Armenia. On that occasion, President Michel proposed to host a meeting in Brussels in the margins of the EaP Summit. The leaders agreed to meet in Brussels to discuss the regional situation, and ways of overcoming tensions and to build a prosperous and stable South Caucasus which the EU supports. The leaders on that occasion also agreed to establish a communication line at the level of respective Ministers of Defence to serve as an incident prevention mechanism. This is a concrete result of the phone calls.
The upcoming meeting in Brussels is important as the EU has clearly demonstrated the political engagement and commitment towards the region at the highest level. I would like to repeat that also in July President Michel visited Azerbaijan. As an honest broker, the EU is ready to support Azerbaijan in the process of establishing an atmosphere of trust in the region, which will contribute to peace and stability. I strongly believe that all outstanding issues should be resolved through dialogue and diplomatic means. The Brussels meeting is important and it is an opportunity for dialogue about solutions.
– As we know, Azerbaijan also supplies a total of 10 billion cubic meters of gas per year to Europe. How do you see the prospects for doubling this volume? In your opinion, could Europe's energy crisis accelerate the expansion of the Trans-Adriatic pipeline?
– Indeed our cooperation in the energy area is very important, it is one of the strategic fields of cooperation. The last segment of the Southern Gas Corridor Trans Adriatic Pipeline started delivering gas from Azerbaijan to the EU market on 31 December 2020. During the first nine months of this year, Azerbaijan exported 4.6 bcm natural gas to the EU which is worth almost 1. 5 billion US dollars. Interested parties can submit firm bids in the ongoing market testing process of the Trans Adriatic Pipeline expansion and discussions are ongoing on a possible extension of the Southern Gas Corridor to the Western Balkans.
I would like to add that it is not entirely accurate to refer to the current situation as a crisis. It is rather an exceptional situation as it originated in the increase of global demand for energy and this is connected to the fact that the economies of the countries on this planet are emerging from the COVID pandemic. The current market outlook says that high energy prices are transitory and may fall significantly towards spring next year. But still this is an important lesson about the necessity of the strategic nature of cooperation in the energy field. I think that this is a very important factor that will play a role in the future.
Photo by Ilkin Nabiyev © APA Group