The Republic of Azerbaijan and the European Union (EU) have maintained a positive relationship through the years and have become more closely linked. Azerbaijan is currently part of the European Neighborhood Policy and the Council of Europe, and is a large recipient of aid and infrastructure investment from the European Union.
Until the fall of the Soviet Union, Azerbaijan had little contact with non-Soviet Europe. During the Soviet years, North Azerbaijan (today’s Republic of Azerbaijan) became the Azerbaijan SSR. It remained that until the Azerbaijani Supreme Court declared independence from the Soviet Union in September 1989, only to have this declaration made invalid in November 1989 by authorities in Moscow. The state finally gained independence in August 1991, and joined the United Nations in 1992. Through the UN and government policies, Azerbaijan has reached out to the international community, especially Europe, and has opened up its economy.
Formal relations with the EU began in 1996 when the EU-Azerbaijan Partnership and Cooperation Agreement (PCA) was signed. This agreement entered into force in 1999. This agreement marked the beginning of a mainly positive relationship between the Republic of Azerbaijan and the European Union, with both sides benefitting from the relationship.
Azerbaijan also strengthened its relations with Europe by becoming the 43rd state to join the Council of Europe on January 25, 2001. By doing so, Azerbaijan opened itself up even more to Europe and the West. Since joining, Azerbaijan has ratified 50 treaties and has been actively involved in the Council.
As the EU grew in size and scope, it launched the European Neighborhood Policy (ENP). Azerbaijan joined the policy in 2004, and the ENP’s action plan for Azerbaijan was adopted on November 14, 2006, after being passed by the Azerbaijani government and the European Commission. Key items included on the plan are investment in Azerbaijan’s infrastructure, partial integration of the Azerbaijani economy into Europe’s, and partnerships with Azerbaijan on extracting oil from the Azerbaijani controlled part of the Caspian Sea.
Opinions about Azerbaijan’s increased relationship with the European Union and the West are mostly positive, but there are concerns rising from the expanded relationship. Azerbaijan and the European Union share a common energy agenda, and both support the building of a pipeline to bring Azeri oil to Europe. The European Commissioner for Energy, Andris Piebalgs, said on November 7, 2008, that “recent events in the Caucasus have shown once again that this is a critical time for energy issues in the region and that EU-Azerbaijan energy cooperation should be strengthened now more than ever.” As more and more states are looking to Azeri oil, the Commissioner sees a strong relationship between the EU and Azerbaijan as crucial for securing future European energy supplies, as well as crucial for helping the Azerbaijani economy and infrastructure to develop.
Azerbaijan’s current government is pro-Russian but is committed to working with the European Union to strengthen its economy and political structure. Azerbaijan’s President, Ilham Aliyev, stated on April 24, 2004 that “’[Azerbaijan’s] current strategic choice is integration in Europe, European family and institutions. We are strongly committed to this policy. We will do our utmost so that Azerbaijan meets all standards and criteria peculiar to Europe. Our policy is such and we have been pursuing it for a long time. Current events in Azerbaijan are the results of this continued policy.’” Aliyev’s government sees the benefits to working with Europe, and is engaged in welcoming European business, investment, and aid.
At the same time, Azerbaijan still has strong ties to Russia, Iran (where the majority of the ethnic Azeri population lives), and its neighboring states on the Caspian Sea and in the Caucasus. The government is focused on developing Azerbaijan with a combination of European and more regional investments. These interests occasionally clash.
Azerbaijan and the European Union have similar beliefs on most policies and are presently working together to forward their combined interests. The European Community has developed a three-year aid plan for Azerbaijan, called the National Indicative Program (NIP), for which the EU has allocated a budget of €92 million over three years (2007–2010). The main goals of this program are to develop government agencies, run them more efficiently, and help Azerbaijan to develop its internal infrastructure to promote foreign investment and business growth. The EU has also set up a European Instrument for Democracy and Human Rights (EIDHR) office in Baku to give advice to Azerbaijan’s new democratic government and to make sure that human rights are protected.
The European Union and Azerbaijan are strong partners on energy policy, and are working together on a number of projects. The main project is the building of a pipeline to connect the Caspian oil supply to Europe, providing a viable route for oil and gas to reach consumers. Europe is also supporting Azerbaijan’s state sponsored program for the increased use of alternative and renewable energy sources. Azerbaijan is a partner country of the EU INOGATE energy programme, which has four key topics: enhancing energy security, convergence of member state energy markets on the basis of EU internal energy market principles, supporting sustainable energy development, and attracting investment for energy projects of common and regional interest. Negotiations are ongoing between the EU and Azerbaijan to replace their existing PCA with an Association Agreement (AA). Roland Kobia, the EU's ambassador to Azerbaijan, said in April 2013 that they could be completed prior to the Eastern Partnership meeting in November 2013. However, the Deputy Chief of Azerbaijan's Presidential administration has stated that "we aim to draft a partnership agreement – a document more adequately reflecting the level of our relations and cooperation with the European Union" rather than an AA. An EU official from the delegation to Azerbaijan stressed that "it has not been said that Azerbaijan will never sign it, just it is not right time to sign it now. So we are working with Azerbaijan on possible other formats but the final objective is to sign an association agreement." No AA was initialled at the summit, though a Joint Declaration praised the progress in negotiations and stated that the EU was willing to negotiate a Deep and Comprehensive Free Trade Agreement with Azerbaijan once they join the World Trade Organization. In December 2013, EU Commissioner for Enlargement Štefan Füle said that negotiations on the AA were continuing. In November 2016 the European Council authorized the launch of negotiations on a framework agreement, which "allows Azerbaijan to decide the extent in which it will participate in the EU's offer of political association and economic integration".