Russian-led EAEU bloc warns Armenia of possible ‘serious blows’ to its economy
Report on suspension of Armenia’s membership of EAEU
Four countries in the Russia-led Eurasian Economic Union (EAEU) may discuss suspending Armenia’s membership of the bloc. A report prepared by experts from the intergovernmental council of Russia, Belarus, Kazakhstan and Kyrgyzstan says so.
The report’s main argument is that Armenia would face serious economic difficulties if it left the Eurasian Economic Union. These would include a 15.6% contraction in GDP.
“All the figures in this report are exaggerated by around 50%,” Armenian Economy Minister Gevorg Papoyan said in response.
He assured journalists that the impact on the country’s economy would be negligible, at around -0.61%. Papoyan cited figures from a study conducted in Armenia. The country set up a working group to assess the potential consequences of leaving the EAEU. It included representatives of the Central Bank and two ministries: the economy and finance ministries.
Unlike members of the ruling party, the parliamentary opposition considers the figures in the report alarming. Arthur Khachatryan, an MP from the Armenia bloc, said that even if the forecast proved only half accurate, the consequences would be “apocalyptic”.
Moscow has yet to comment on the document. Kremlin spokesman Dmitry Peskov said the presidential administration had not yet reviewed the report.
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Context
At a meeting of the Supreme Eurasian Economic Council in Astana on 29 May 2026, the presidents of Russia, Belarus, Kazakhstan and Kyrgyzstan issued a joint statement. They expressed concern about Armenia’s moves to strengthen ties with the European Union. In their view, European integration by an EAEU member could pose risks to the economic security of the bloc’s other countries.
They urged the Armenian authorities to hold a nationwide referendum as soon as possible on whether to choose the EAEU or the EU.
“We are working within the Eurasian Economic Union and will continue to do so until a choice between the European Union and the EAEU becomes unavoidable,” Armenian Prime Minister Nikol Pashinyan replied at the time. He stressed that the people would make the decision in a referendum. However, he said he currently saw no grounds for a nationwide vote on the issue. He explained that Armenia’s European integration process had not yet reached the stage at which citizens could make such a choice: “Until Armenia officially applies for EU membership or comes close to obtaining candidate status, holding any referendum would make no sense.”
The heads of state also instructed their representatives to prepare a report by December 2026 on “the possible consequences of suspending the Treaty on the Eurasian Economic Union in respect of the Republic of Armenia”.
A closer look at the report
According to the report, Armenia’s actions contradict an obligation set out in Article 3 of the EAEU Treaty. The article requires member states to help create favourable conditions for the union to fulfil its functions and to refrain from actions that threaten its objectives.
The authors apparently mean a law adopted by Armenia’s parliament to launch the process of joining the EU. The EAEU may also have taken note of Armenia’s more active political dialogue and growing economic ties with the European Union.
The report again calls for a referendum in Armenia on “the EAEU or the EU”. The authors note that if the decision to suspend Armenia’s EAEU membership goes ahead, the suspension could remain in force until the referendum takes place.
However, the authors themselves acknowledge that the EAEU Treaty contains no explicit mechanism allowing member states to unilaterally suspend another country’s membership.
Russia, Belarus, Kazakhstan and Kyrgyzstan nevertheless invoke the 1969 Vienna Convention on the Law of Treaties. The report says the four countries could consider adopting a joint decision to suspend Armenia’s membership under the convention’s provisions.
The document specifically warns that suspending Armenia’s membership would reduce the total volume of trade with other EAEU member states by 55.6%. The EAEU report also warns of the following consequences:
- the reintroduction of customs controls and duties, comprehensive sanitary inspections and taxation of goods;
- a 30–50% decline in exports of Armenian-made goods and a reduction of more than 90% in the re-export of goods;
- a 15.6% contraction in the country’s GDP, a 14.9 percentage-point rise in inflation and a 14.6% fall in consumption;
- an increase in the price of gas for Armenia from $177.50 to $300 per 1,000 cubic metres, a rise of 69%;
- tighter restrictions on labour migration for Armenian citizens.
How Yerevan has responded to the report
“Armenia has always honoured its obligations to the EAEU in good faith”
Economy Minister Gevorg Papoyan said Armenia had always honoured its obligations to the EAEU in good faith.
“There are no obligations that we have failed to fulfil. We see this as an economic dispute, one that also concerns economic restrictions.”
Papoyan said Yerevan had lodged a complaint with the Eurasian Economic Commission and was awaiting a meeting on the issue, scheduled for 3 November.
“What do the EAEU rules say? They say that if you believe you have been treated unfairly — for example, if someone has imposed unjustified restrictions on you — you have the right to file a complaint.”
The dispute concerns economic restrictions that Russia imposed on imports of Armenian products. They have been in force since May and remain in place. Other EAEU member states have also backed them.
Although Armenia has already filed a complaint, the minister doubts it will secure a favourable ruling. He noted that the commission requires consensus, meaning all member states — including Russia — must agree.
As for the threat of higher gas prices, Papoyan expects a negative impact.
“A change in gas prices can have varying effects: one scenario could see a 5% impact, another 7% or more. Even a 1% increase in the price would be highly undesirable.”
However, the minister said that even a rise in gas prices would not have consequences so severe that Armenia’s economy could not cope with them.
“In principle, I find this acceptable, even normal. Everything should be paid for at market prices. If we do not pay the market price for something, we ultimately pay for it in some other way.”
Amid debate over a possible increase in the price of Russian gas, some Armenian experts and residents say that “Armenia has spent decades paying for cheap gas with its sovereignty”.
“They cannot expel Armenia from the EAEU”
Hasmik Hakobyan, an MP from the ruling Civil Contract faction, is not worried about Armenia being expelled from the EAEU because no such procedure exists.
“They cannot expel Armenia from the EAEU, even if every other member state wants to.”
She stressed that Armenia is not leaving the union and has expressed no intention of doing so. Under EAEU rules, the only way to end membership is for the country itself to decide to withdraw.
“We want to continue cooperating in the same spirit and, where possible, discuss all issues and challenges at the negotiating table,” she said.
Commentary
According to analyst Vahe Davtyan, the most interesting part of the document concerns the potential losses for other EAEU member states. It says that suspending Armenia’s membership would not cause them serious economic problems. In Russia’s case, for example, the projected decline in the total volume of imports and exports of goods and services would not exceed 1%.
“The report’s political message is crystal clear. Economic pressure on Armenia could prove virtually painless for the other EAEU countries, while dealing a heavy blow to Armenia itself,” he argues.
He warns that if Armenia leaves the EAEU, the sectors hardest hit would include agriculture, food processing, alcoholic beverage production and light industry.
“These are industries for which the Russian market has been one of the main destinations for sales for many years.”
On the possibility of higher prices for Russian gas, the analyst notes:
“Suspending membership of the EAEU does not automatically mean that gas prices will be revised. The inclusion of this scenario in the document can therefore be seen as a political signal.”
In Davtyan’s view, the report’s authors have overlooked an important detail: bilateral agreements between Armenia and Russia also govern gas supplies. Nevertheless, he stresses that any change in gas prices would inevitably affect electricity generation costs and the competitiveness of Armenian industry.
Report on suspension of Armenia’s membership of EAEU
