Peace in the Caucasus: Ensuring Europe Plays a Role after Trump’s Ceremony

Azerbaijan’s Gains

President Ilham Aliyev did not get the complete climb down by Armenia that he wanted, but he won a great deal. Aliyev leaves with an agreement that deepens his relationship with the US, securing help for a safe connection with Nakhichevan and a promise of US investment in the corridor.  One foundation of the peace-in-practice proposed by the Biden team was a US pledge to impose sanctions on officials and companies that build, operate or use a corridor without Armenian consent. From Aliyev’s standpoint, a US promise to back the corridor now, before Armenia has taken the final step of amending its constitution, could mean that this bit of leverage has been surrendered. In short, the US paid up front while Aliyev only had to reiterate peace assurances he has offered many times before.

Armenia’s Strains

The potential backlash in Armenia will be a problem. There will be no substantial peace dividend for Armenia: no open border with Turkey, no extra investments for Armenia’s benefit (beyond what was promised by former secretary of state Antony Blinken in April 2024 and the US-Armenia agreement signed on August 8th); only a corridor connecting different parts of Azerbaijan. The election campaign will now be dominated by the prospect of a coerced constitutional change. This will be deeply unpopular in Armenia and will hurt Pashinyan further.

This is a shame. Pashinyan has been a courageous, far-sighted leader. A weak and Moscow-dependent Armenia, or one polarized like neighboring Georgia, will almost certainly not live up to the hard compromises needed for peace. And an Armenia that cannot uphold the agreement will be vulnerable to intervention by Moscow or Baku.

Russia’s Shadow

The White House ceremony did send a strong message to Moscow, which has long regarded the south Caucasus as its zone of influence but is now weakened by Ukraine, sanctions and harsh disagreements with both Yerevan and Baku.

However, this is an incremental and maybe only a transitory benefit. Trump seems to be in a hurry to find an accommodation with Vladimir Putin. Sanctions relief, a ceasefire with Ukraine or any understanding with the US president will give Moscow latitude, money and military might to intensify its engagement in the Caucasus — especially in Armenia, where it already has (weak) proxies and security bases.

While anti-Russia sentiment in Armenia is now highly prevalent, Russia has learned in campaigns in Moldova, Romania and Georgia how to help its preferred candidates while avoiding backlash — and will certainly apply these lessons in Armenia’s election. Additionally, after the upcoming Trump-Putin Alaska summit, I believe Putin will almost certainly claim (perhaps privately to the regional leaders) that he secured an understanding from Trump that the south Caucasus is in the Russian sphere. The US and Europe will need to clarify immediately that this is untrue.

No Business without Turkey

Turkish president Recep Tayyip Erdogan was neither present nor mentioned in Washington. The problem is that the corridor’s success depends on accessible routes to global markets, with Turkish ports the only scalable option. Turkey, then, will decide whether the corridor lives up to its promise. But the border between Armenia and Turkey remains closed and is likely to stay that way until a final peace deal is signed — and the price is likely to go up if Armenia does not change its constitution.

Until the promised regional super-highway opens, the only real costumer for this short corridor is Baku. Given this uncertainty, early entrants in this project may pursue short-term benefits to themselves, such as taking exorbitant loans on favourable terms, using construction contracts to obtain more loans from interested banks, or quickly selling the concession to unknown third parties. Each step in this cut-and-run capitalism will create opportunities for graft, inefficiency and manipulation.

European money can be the key to guarantee the corridor’s success. With their knowledge of the issues and the preparatory work they have done already, Europeans can ensure transparency, which will be critical to avoiding capture by predatory states. Fossil fuel states from the Arab Gulf and central Asia may have deep pockets, but they have little ability to hold off Russia and Iran, while from my experience in both government and the private sector it seems very unlikely that the US Development Finance Company could quickly commit enough funds to support a project on this scale.

If the corridor fails to develop into a global network soon, it will then be of interest almost exclusively to Azerbaijan. This will tempt Moscow-dependent and hardline Armenian officials to use it as leverage in relations with Azerbaijan. Things could come to this point in a year or two, when Azerbaijan might claim US acquiescence in securing the corridor.

This points to a final problem: the responsibility to protect the corridor seems to be falling through the cracks among the multiple players. Based on private conversations, US troops might be deployed to protect US commercial interests there, if they exist by then. While this sounds like the late-19th-century gunboat diplomacy that appeals to Trump, such a move seems unlikely. It would be unwise for a business to assume that an anti-intervention president would send US troops into territory where Russia, Iran, Turkey and now the twice-victorious Azerbaijan can escalate quickly.

European Capital(s)

Even though London, Berlin and Paris have been active behind the scenes, Washington has now taken center stage on this issue. The reality is that Baku and Yerevan do not see Europe as enough counterweight to Russia.

This should lead Europe to reassess its tools for engaging with conflicts on its borders. European gas purchases from and arms sales to Azerbaijan far outweigh the assistance, tentative enlargement offers and arms sales to Armenia. Even Paris, which has strongly supported Armenia, sought to soften its posture toward Azerbaijan this year.

If peace is achieved and the corridor opens, however, then Europe’s experience with economic integration will become increasingly relevant, as will its newfound military strength.

The Washington ceremony is a material step toward peace. It crystallizes American involvement and highlights the two countries’ aspirations for peace — two things that had been known but not fully acknowledged. But the underlying cause of the conflict has not been resolved, just postponed, and the event excluded parties who will try to get what they want in the meantime.

US special envoys Tom Barrack and Steve Witkoff will need to work quickly.  Europe can play a key role in designing and financing the corridor, positioning itself to help mitigate some of the risks identified here.

(Jim O’Brien is a distinguished visiting fellow at the European Council on Foreign Relations. At ECFR, he works on identifying issues that can form the basis of a renewed and sustained transatlantic partnership.)