The unresolved conflicts in the South Caucasus could ignite into full-fledged wars in Europe’s neighbourhood, so to guarantee its own security, the EU must become more engaged in resolving them. Thus far, others have taken the lead in promoting conflict settlement in the region, but over a decade of negotiations led by the UN in Abkhazia and the Organisation for Security and Cooperation in Europe (OSCE) in Nagorno-Karabakh and South Ossetia have failed to produce peace. With its reputation as an “honest broker”, the EU has a greater role to play, and especially since the 2004 enlargement brought the South Caucasus closer, it has strong incentive to get involved. This is a challenge Brussels has, however, only begun to address.

EXECUTIVE SUMMARY AND RECOMMENDATIONS

Instability in the South Caucasus is a threat to European Union (EU) security. Geographic proximity, energy resources, pipelines and the challenges of international crime and trafficking make stability in the region a clear EU interest. Yet, the unresolved Nagorno-Karabakh, Abkhazian and South Ossetian conflicts have the potential to ignite into full-fledged wars in Europe’s neighbourhood. To guarantee its own security, the EU should become more engaged in efforts to resolve the three disputes. It can do so by strengthening the conflict resolution dimension of the instruments it applies. As the EU is unlikely to offer membership to Georgia, Armenia and Azerbaijan even in the medium term, it must identify innovative means to impose conditionality on its aid and demonstrate influence. This is a challenge that Brussels has only begun to address.

Since 2003 the EU has become more of a security actor in the South Caucasus, particularly in Georgia. It has appointed a Special Representative for the South Caucasus, launched a European Security and Defence Policy (ESDP) mission, and employed the Commission’s Rapid Reaction Mechanism to support post “Rose Revolution” democratisation processes. It has included Armenia, Azerbaijan and Georgia in the European Neighbourhood Policy (ENP) and started Action Plan negotiations due to end mid-2006. The Commission has allocated some €32 million for economic development confidence building programs in Georgia, and it has cooperated closely with the UN and the Organization for Security and Cooperation in Europe (OSCE).

Nevertheless, the EU can do more to help resolve conflict in the region, in particular through the Action Plans currently being negotiated with each country. For the EU, these are a chance to enhance and reposition itself in the South Caucasus if they can be tied to conflict resolution and include specific democratisation, governance and human rights benchmarks. For the region they may be an opportunity to map out the reform process concretely. But there is a long way to go. The EU’s relations are not strong with either Azerbaijan or, to a lesser extent, Armenia. It does not participate directly in negotiations on Nagorno-Karabakh, Abkhazia or South Ossetia. In and around Nagorno-Karabakh, it has done little for conflict resolution. It has rarely raised the South Caucasus conflicts in its high-level discussions with partners and has employed few sanctions or incentives to advance peace.

To become more effective, the EU must increase its political visibility. Compared with Russia, the U.S., the UN and the OSCE, its financial and political engagement in the region has been minimal. However, as it gives more aid through new and old instruments, its ability to provide incentives and apply conditionality should grow. Compared with other actors, the EU can offer added value, with its image as an “honest broker” free from traditional US/Russia rivalries; access to a range of soft and hard-power tools; and the lure of greater integration into Europe.

The arrival of a new Special Representative (EUSR) is an opportune moment for the EU to strengthen its political presence. The EUSR should try to become an observer in the three conflict negotiation forums. In South Ossetia and Abkhazia, where the Commission has already allocated significant funding, efficient and well-targeted assistance can give weight and credibility to the EU’s diplomatic and political efforts.

In Nagorno-Karabakh, rather then wait for an agreement on the principles of resolution mediated by the OSCE Minsk Group, the EU should begin contingency planning to assist peace implementation now. Sending military and civilian assessment missions to the region could give new impetus to a negotiation process which seems to be dangerously running out of steam. Whether or not a peace agreement is eventually signed, the EU should be prepared to implement confidence building programs or – in a worst case – to consider a range of options in case of an outbreak of fighting. Otherwise, having remained out of Nagorno-Karabakh and the adjacent occupied districts for over a decade, either war or peace will find it struggling to catch up in its own neighbourhood.

RECOMMENDATIONS

To the European Union and its Member States:

To increase the EU’s visibility and effectiveness as a political actor

1.  Open fully-staffed European Commission Delegations in Baku and Yerevan.

2.  Strengthen the EUSR’s regional presence by at a minimum appointing a EUSR political analyst in each of the three South Caucasus capitals.

3.  Start a public awareness campaign in the region about the EU, its values, institutions, programs and conflict resolution capabilities.

To take full advantage of the negotiating process for European Neighbourhood Policy Action Plans

4.  Define the peaceful resolution of the Nagorno-Karabakh conflict as an Action Plan priority for Armenia and Azerbaijan, with the Plan aimed specifically at ensuring that:

(a)  Azerbaijan and Armenia should commit to resolving the conflict through peaceful negotiations without delay, defining the principles of an agreement as renunciation of the use of force to settle disputes; incremental withdrawal of occupied districts; return of displaced persons; opening of transport and trade routes; and determination of the final status of Nagorno-Karabakh through a referendum;

(b)  Armenia should pledge to encourage the de facto Nagorno-Karabakh authorities to agree to a peace settlement according to the principles defined above; and

(c)  both states should commit to foster reconciliation, confidence building and mutual understanding through governmental and non-governmental channels.

5.  Action Plan elements should include clear benchmarking to measure progress in the development of genuine democracy, good governance, respect for human rights, the rule of law and free and fair elections; and the establishment of a comprehensive monitoring mechanism, whose reports are made public.

6.  Increase public ownership and awareness by engaging civil society in Action Plan preparation and monitoring (particularly in Azerbaijan), organising conferences, seminars, and media events, and strengthening the involvement of parliaments and local authorities.

7.  Coordinate with other bilateral and multilateral players to ensure consistency between the Action Plans and the commitments made to the Council of Europe (CoE), the OSCE, NATO and the UN.

To increase the impact of crisis management and conflict prevention actions

8.  Strengthen the capacity of Commission staff in the region to carry out post-conflict rehabilitation by offering training in security sector reform, mediation and reconciliation, confidence building, and demobilisation, disarmament and reintegration (DDR).

9.  Develop more initiatives focused on confidence building across ceasefire lines and the soft side of conflict-resolution, such as working with civil society, media, women, youth and former combatants, and apply community participation to project planning, implementation, monitoring and follow-up.

10.  Increase engagement with non-recognized entities (Abkhazia, South Ossetia and Nagorno-Karabakh) and promote democratisation, civil society development and the rule of law, not as recognition of status but as a means to break their isolation, build confidence and avoid exclusion from broad EU integration processes.

11.  Promote European Initiative for Democracy and Human Rights (EIDHR) funding opportunities, especially in Azerbaijan, and develop an interim mechanism to distribute funds to local civil society groups, possibly through a member state embassy or the Europa House, before an EU delegation opens in Baku.

12.  Support new regional programs in particular for students, teachers, professors and other professional groups including police, judges, lawyers and journalists.

To prepare for an eventual Nagorno-Karabakh peace settlement and encourage the parties to compromise

13.  Seek agreement for the EUSR to participate in the OSCE Minsk Group as an observer.

14.  In the case of the Commission, carry out a needs assessment study of Nagorno-Karabakh and the adjacent occupied territories (including places where IDPs have settled) even before a framework agreement on the principles of a settlement is agreed between Azerbaijan and Armenia.

15.  In the case of the Council, request the Secretariat to develop ESDP options in support of peace implementation, send assessment missions in close cooperation with the OSCE and begin contingency planning so as to prepare for:

(a)  deployment of peacekeepers around Nagorno-Karabakh; and

(b)  deployment of a civilian crisis management advisory team to engage in DDR, security sector reform, mediation, political affairs, human rights and media issues in and around Nagorno-Karabakh.

To support the peaceful resolution of the Georgian-South Ossetian and Georgian-Abkhazian conflicts

16.  Expand the Commission’s role in addressing the Georgian-South Ossetian conflict and finance another tranche of aid to support projects identified in the OSCE needs assessment.

17.  Once Georgia passes the appropriate law and designates a budget line for its implementation, make funding available to its new property commission and property restitution fund.

18.  Agree a Joint Action to provide financial support for the Joint Control Commission (JCC) mechanism in April 2006.

19.  Request the JCC and the parties to the Geneva process to invite the EUSR to observe their meetings and activities.

20.  Raise the Georgian-South Ossetian and Georgian-Abkhazia conflicts at EU-Russia summits and other high-level dialogue forums.

21.  Continue the border management assistance mission and facilitate communication and cooperation between Georgian and Russian border guards.

22.  Agree a Joint Action to support a Georgian-South Ossetian Special Coordination Centre and joint policing.