Armenians rally against Customs Union as Putin delivers rewards

By bne IntelliNews December 3, 2013

bne -

Armenians picketed a visit from Russian President Vladimir Putin on December 2, in protest over Yerevan's surprise decision in September to join the Customs Union. The Russian leader came bearing gifts, confirming a huge discount on gas prices.

Around 500 people protested in Yerevan on December 2 over the plan for Armenia to enter the Russian-led Customs Union. Echoing the feelings of frustration at movement back towards the east being expressed on the streets of Ukraine, demonstrators carried banners demanding "Putin, go home," reports Reuters.

Others insisted ""No to the USSR", in protest against Armenian President Serzh Sargsyan's decision to turn his back on closer integration with the European Union. His country had spent months negotiating an association and trade pact with Brussels, but that process was turned on its head by a surprise announcement - in the wake of another meeting with Putin - that Armenia would instead join the Customs Union on September 3.

The protest march ended outside Sargsyan's residence, where demonstrators submitted a letter calling on the president to reverse the decision. Demonstrators also voiced solidarity with protesters in Ukraine, where mass protests have taken place in recent days after President Viktor Yanukovych failed to sign a similar agreement with Brussels, citing pressure from Moscow.

Yerevan police blocked the protesters' way, saying their demonstration was unsanctioned and arrested around 110 people, ArmInfo reports. Opposition leaders claim that police beat several demonstrators. Members of the Aizan, Free Democrats and Heritage parties are believed to be among those arrested. Several leading anti-Russian activists were detained in Yerevan before the rallies started, according to RFE/RL.

Speaking at a parliament session, Armenian National Congress MP Nikol Pashinyan criticised the arrests. He claims the demonstrators were "fighting to preserve the sovereignty and honour of Armenia", Hetq Online reported.

Sargsyan's decision to move further into the Russian sphere of influence was a shock to many Armenians, coming just two months before the Eastern Partnership summit that took place last week in Vilnius.


Under no little pressure from Russia, Armenia was the first of the six countries expected to initial or sign EU association agreement and trade pacts to drop out. In the end, only Georgia and Moldova made the commitment. Ukraine is the big fish however, and speculation swirls over Yanukovych's next move. Russia is pushing hard to swell the ranks of its own trade club, which it founded alongside Belarus and Kazakhstan in 2011. Critics have often accused Putin of trying to recreate the USSR.

Yanukovych told the EU that he cannot sign the deal due to pressure from Russia, which openly threatened to erect trade barriers if he did so. At the same time, Ukraine is in a fiscal hole, and a cut in gas prices and cheap loan would help enormously. The Ukraine leader is due to meet Putin next week, but is also in close contact with Brussels. Any definite move towards the east would raise the tension on the streets, which are occupied by tens of thousands of protestors across the country.

In Armenia, Sargsyan does not face similar pressure pushing westwards. A survey by the Eurasian Development Bank published in October found that 67% of Armenians were in favour of Customs Union membership. However, the opposition has accused Moscow of exerting heavy pressure.

Armenian consumer gas prices spiked by 18% in July, following a price hike by Russian state-controlled export monopoly Gazprom. The previous month, Russia completed an arms delivery worth around $1bn to Armenia's long time rival Azerbaijan, potentially escalating the long-standing conflict over the breakaway Nagorno Karabakh Republic.

Speaking at a Russian-Armenian regional forum in Yerevan during his visit, Putin stressed the importance of the South Caucasus region to the Russian government. "We are going to strengthen our position in the South Caucasus, drawing on the best of what we have inherited from ancestors and good relations with all countries in the region," he said, according to Reuters.

He also confirmed that Sarysyan's government will be rewarded for its decision to join the Customs Union. Putin announced the signing of an agreement under which Russia will give up its 30% export duties on gas sent to Armenia. Russia will export gas to Armenia at $189 per 1,000 cubic metres, which is less than half the price charged to Ukraine and EU consumers.

Armenia will also see the 35% duty on Russian exports of petroleum products scrapped. The charge is causing problems in more than one CIS country that is not currently part of the Customs Union. Uzbekistan and Tajikistan are currently facing fuel shortages.

Gazprom also confirmed that it will acquire the Armenian government's 20% stake in ArmRosgazprom, which will give it full control of the gas distribution company. Armenia will also be able to buy weapons from Russia at domestic prices, and oil at a 30% discount, Putin told the forum.

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