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Armenia loses 5 billion euros

22 December 2014 [16:19] - TODAY.AZ

/By AzerNews/

By Mushvig Mehdiyev

Armenia has lost nearly 5 billion euros by canceling its European integration program and pinning its future on the Eurasian Economic Union, a Russia-led economic alliance.

The local media have just published an interesting report on Armenia's losses following its decision to repudiate signing the Association Agreement (AA) with the European Union.

In August, 2013, Armenia wrapped up negotiations on AA signing with the EU. It also submitted the "Upgrading Armenia" document on the basis of which the EU could provide Armenia with a grant of 4 billion 865 million euros, according to 1in.am, a local online media outlet. The EU was prepared to present the document to its donors as soon as Armenia initialed the AA.

Those 4.8 billion euros was just part of a larger benefit, which Armenia could get by signing the Association Agreement with the EU.

The EU planned to provide the huge money as a grant, but not a loan. The program was not accomplished due to a sole reason - President Serzh Sargsyan unexpectedly revealed Armenia's preference for the EEU over the EU in September, 2013. The decision to join the Russia-lead alliance also deprived the post Soviet country of a right to sign a free trade agreement with the European countries.

The 52-page program focused on investing 4.8 billion euros, as well as the dates for receiving the grant. Thereby, the EU decided to grant 556 million euros to Armenia in 2014-2015, while the rest 4.3 billion in 2016-2025.

Armenia could feel like in paradise by opting for the EU instead of predicting the possible challenges following the membership at the EEU.

The road infrastructure of the former Soviet country could see a boom as nearly 500 million euros would be invested in restoration of the roads in Armenia and about 560 million euros was considered for the North-South highway's restoration in particular. The EU would allocated around 3.1 billion euros to the improvement of Armenia's waters sources, irrigation systems, as well as dams and schools.

Armenia could achieve a mutual annulment of the customs duties for certain goods and services under the Deep and Comprehensive Free Trade Area (DCFTA), a part of the AA dealing with trade issues.

According to Ecocrys, a Dutch investigation company, GDP of Armenia could rise by 2.3 percent, while the revenues of the state budget up by $146 million in case of pursuing the European integration by signing the AA deal. Furthermore, the volume of Armenia's export could surge by 11 percent and 15 percent respectively in short-term and long-term perspectives. The AA also promised a strong competitiveness among the goods imported to Armenia.

According to the Upgrade Armenia program, Armenia could enjoy a 7 percent increase in the salaries due to the market competition inside Armenia based on DCFTA terms and conditions.

Moreover, the AA agreement would pave the way to decrease the current 32 percent poverty rate in Armenia as a result of improved economic condition and pricing the customs duties between Armenia and the EU.

In a nutshell, Armenia will suffer from not only economic losses but will also face deprivation of the huge economic chances and benefits it could get with signing the Association Agreement.

Several political and economic experts see no bright future in Armenia as a member of the EEU. Hrant Bagratyan, former Head of the Armenian government, believes that the country will compromise its sovereignty by joining the Eurasian Economic Union.

Another expert, Boris Navasardyan, Head of the Yerevan press-club, claims that the EEU will collapse in short term and Armenia will face the most serious problems namely within the EEU.

URL: http://www.today.az/news/regions/138048.html

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