The European Union on July 2 unveiled a new package of financial and trade support for Armenia, seeking to bolster the South Caucasus country as it faces what Brussels described as mounting economic pressure from Russia and accelerates its shift towards Europe.

European Commission President Ursula von der Leyen, visiting Yerevan for talks with Armenian Prime Minister Nikol Pashinyan, said the bloc would provide an additional €52mn in support and move to liberalise tariffs on most Armenian exports entering the EU.

The measures come weeks after Pashinyan’s government secured another parliamentary majority in elections widely seen as reinforcing Armenia’s pro-Western course, even as ties with its traditional ally Russia have frayed. It follows von der Leyen's visit to Baku on July 1. 

“The recent elections have shown the strength of Armenia’s democracy. The Armenian people have chosen reform and a closer partnership with our Union. No country should be pressured for a sovereign choice,” von der Leyen said during a joint appearance with Pashinyan.

“This is why the EU is stepping up, with €52mn and proposed tariff-free access for 80% of Armenia’s exports to the EU. Armenia can count on us.”

The proposed trade measures, which still require approval from the European Parliament and EU member states, would temporarily remove tariffs on around 80% of Armenian exports to the bloc. European officials said the move was designed to help Armenian businesses redirect trade away from Russia, where some exporters have been hit by restrictions.

Von der Leyen said the changes would cover nearly all Armenian exports of fresh fruits, vegetables and plants previously destined for Russia, as well as most beverages and spirits.

The announcement underlines a broader geopolitical realignment in the South Caucasus, where Armenia has increasingly distanced itself from Moscow following years of tensions over security guarantees and regional conflict.

Pashinyan has sought to deepen ties with the EU while advancing peace talks with neighbouring Azerbaijan after decades of conflict over Nagorno-Karabakh.

Brussels welcomed what it called “historic progress” in Armenian-Azerbaijani normalisation, linking economic integration to the prospect of lasting regional stability.

Alongside the trade package, von der Leyen reiterated plans for a €200mn EU connectivity initiative aimed at improving transport, energy and digital links across the South Caucasus. EU officials said the programme could help unlock up to €2bn in broader public and private investment. The package includes infrastructure projects in Armenia such as new border crossing points and road upgrades, as well as energy initiatives intended to strengthen regional interconnection.

A separate €20mn “peace dividends” programme, announced earlier this week, will target border communities in Armenia and Azerbaijan, supporting healthcare, demining, small businesses and local farming initiatives.

Pashinyan welcomed the measures, calling the EU one of Armenia’s “most reliable partners” and saying relations had moved beyond political symbolism into practical economic cooperation.

“Our meeting today reaffirmed that the EU is one of Armenia's most reliable partners. The phrase ‘the Republic of Armenia and the EU are closer than ever’ is becoming more tangible day by day, gaining not only political but also practical economic application,” he said.

Pashinyan said the EU’s proposed autonomous trade measures would mark a significant milestone, making Armenia the first non-candidate country without a free trade agreement with the bloc to receive such access. He urged EU institutions to move quickly.

“We also hope that it will be possible to adopt it in the shortest possible time, taking into account that the harvest season has already started in Armenia,” he said.

Armenia’s economy remains heavily intertwined with Russia, its largest trading partner, but Yerevan has increasingly looked to diversify as political ties deteriorate.

Von der Leyen was blunt in her remarks, describing the pressure facing Armenia as “nothing short of economic coercion”. 

Pashinyan highlighted ongoing cooperation with the EU on transport corridors under Armenia’s “Crossroads of Peace” initiative, which seeks to reopen regional trade routes with Azerbaijan and Turkey. He said Yerevan was also seeking closer cooperation with the EU on energy storage, renewable power and digital infrastructure, including participation in Black Sea submarine cable projects.

The EU-Armenia relationship has deepened steadily since the Comprehensive and Enhanced Partnership Agreement entered into force in 2021, with the two sides agreeing on a new strategic agenda last year. Brussels also launched a visa liberalisation dialogue with Armenia in 2024, another signal of closer ties.