Baku Dialogues: THE EU-AZERBAIJAN STRATEGIC PARTNERSHIP: LOOKING TO THE FUTURE


27-01-2015

First of all, Mr. Rector, thank you very much for your kind words of introduction. Indeed, I am pleased to be back here in Baku and I am happy to have contributed during these years as Commission President to the reinforcement of the relationship between Azerbaijan and the European Union. I very much respect your country. I know that you are a relatively young country that has been very successful at forming its statehood. Now and on the path of modernization, I believe the European Union and Azerbaijan can do wonderful things together.

Thank you also for your references to my career. Indeed one of the points I remember well was when as a foreign minister I was hosting the OSCE conference in Lisbon. It was an important conference also for Azerbaijan. I am sure that students of ADA will study many of the decisions that we have taken together in the OSCE, in the European Union, in the United Nations. Today I am not giving you a study course - as this is a diplomatic,
political speech, I prefer to have free flowing discussions because of the possibility for analyzing different viewpoints. Nevertheless, I hope that what I am going to present will contribute to the studies that I know you are pursuing here, Mr. Rector, with great commitment to academic excellence. And it is extremely important that this kind of institution has the criteria of academic excellence at the core of its activities.

Coming here after 2011, I am discovering the tremendous changes that have taken place and feel for myself the dynamism of this country.

Azerbaijan is a country that has undergone radical and rapid change in a way that would have been unimaginable 25 years ago. Baku is a vibrant and modern city with energy in more than one sense of the word; building on its rich history but with an eye on the future, with skyscrapers sprouting on the shoreline of the Caspian Sea.

This university - ADA - has undergone remarkable growth since its inception, with a wonderful new, and environmentally friendly, campus. I also know that you encourage open and frank debate and this is the way it should be in a University. This University is testament to the recent commitment to education in Azerbaijan, and we are delighted in the European Union to have played our part here – through our Jean Monnet Program and the Centre for Excellence in EU studies, as well as access to European Universities through Erasmus Plus.

As you said, Mr. Rector, it was in fact during the visit to Azerbaijan that President Aliyev and I decided to provide further support to educational exchanges between Azerbaijan and the European Union. Just today, we both witnessed the signature of an agreement that opens new possibilities for Azerbaijan to benefit from European Union programs. From my conversations with the [Azerbaijani] president, it is clear that he shares my commitment to making education a priority. 

Because education unlocks doors and opens the mind, it enhances diplomatic and economic relations between countries and regions, and helps to overcome prejudices and fear and nurtures tolerance. With this openness, your desire to look to the future and to recognize the challenges and opportunities around you in a globalized world, in Europe and in the Caucasus, this Diplomatic Academy is certainly the perfect setting to discuss some of the issues I want to raise with you today.

A changing world order: Globalization

As academics, future diplomats,business leaders, representatives from civil society and journalists, I do not need to tell you that we are going through a period that could be characterized as an acceleration of history.

We are more interconnected and hence interdependent. Communication technologies and better, and more affordable, travel mean that we all live virtually next door to each other. Travel to different continents today is done as easily as travel within a country twenty-five years ago.

Our world has changed: the 20th century alone saw our global population quadruple. It took 39 years to go from 3 billion to 6 billion people in the world, having taken thousands of years to reach the first 3 billion in 1960. Our economic output has increased by a factor of forty. This change has been rapid, the context ever-evolving, whereby we moved from a bipolar world during the Cold War; to a unipolar world; and now – in a globalized 21st Century – to a multipolar and many would say, a polar world, where the international political and economic landscape is no longer led by one single power; and where our decisions, as individual actors, have an impact across the world, and not just on ourselves and our physical neighbours.

Globalization represents this new world order, a new context in which we must make decisions. I know that this concept of globalization is sometimes controversial. It is also a subject of debate among some European countries - some are in favor, some are against it. My position is that being against or in favor of globalization is like being against or in favor of the wind. You have it. You have it because it is not politically controlled. You have it driven by science and technological decisions. So, unless there are catastrophes - and catastrophes can always happen, as we have seen recently - we may count on the fact that the future world will become more inter-connected and more globalized. The best thing to do, I think, is not to have a theoretical discussion about globalization, but rather to engage. We should make the most of what globalization has to offer - the possibilities, for instance, in the field of education. Thanks to the Internet, young men and young women today can access information all over the world. My generation in my native Portugal could not. I was living in a non-democratic state, and we could not read all the books we wanted. Nowadays, anybody in the world, even in authoritarian systems, has access to so much more information. There are great things that globalization brings. There are also problems that globalization brings, as we have seen in the financial crises. We also have the problems of energy and security, we have the problems of international terrorism. So, there are good and bad aspects of globalization, but I think the message should be that young people should be open. Hiding ourselves or creating new walls is not the best response to globalization; we have to accept this context. We should accept this context in order to secure the essential ingredients that our countries and citizens are looking for: peace,
prosperity, and freedom. I think these are the main issues for today's world.

But, as we have also witnessed in recent weeks, months and years, globalization is not a panacea for peace and collective prosperity. The flattening of the physical distances of the world has not ironed out our political and societal differences. It has not guaranteed the acceptance of universal values. In a globalized world, where demographics play a vital role for our future prosperity, we know that smaller countries, who do not have the population of the United States, China or India, must find other ways to succeed. So we must defend our ideals, our values and interests in a smarter way, in a way that keeps some of the great traditions we have in our countries alive. I think you should cherish those traditions, but at
the same time be open-minded towards the changes in the world.

The European Union as a laboratory for globalization

Ladies and Gentlemen,

This has been the motivation of the European Union, a laboratory for globalization, a collection of Member States who have decided to come together, in the first instance to avoid the sheer destruction and devastation of war. As we know, the EU was created immediately after the Second World War, based mainly on establishing reconciliation between France and Germany. The [European project] started with six countries. But what was the most important motif? Peace - achieving peace by economic integration or through economic integration. It had an economic nature; indeed it started with the Community of Coal and Steel, the materials that fuelled the war. And the idea behind the founding fathers of the European Community and the European Community of Coal and Steel was indeed very simple, and therein lies its genius. If we make the countries interdependent around the materials of war, war will be unimaginable or impossible. Subsequently, the idea developed and the original European Coal and Steel Economic community became the European Union; from the six original members we are now 28. That was the first distinctive feature – the aim of avoiding war.

In the second instance, the EU was a way to collectively improve our living standards and wealth by working together, not against each other, tackling collective problems and benefiting from the success of each country. Thirdly, in the 21st Century, we are upholding the goals of peace and prosperity, but also trying to contribute to the global world by sharing our core values. Our project has resulted in 70 years of peace, for which we received the Nobel Peace Prize in 2012, a prize with a connection to Azerbaijan having been originally partly funded by the Nobel Brothers' Petroleum Company here in Baku. 

We look back on 70 years of stability and democracy. We have grown, as I said, from six countries in 1957 to 28 in 2014; from individual countries, like Sweden, Hungary, the Czech Republic, Portugal with population sizes similar to your own here in Azerbaijan, to a collective 507 million; representing 23 percent of the world's GDP, and a 12.6 trillion Euro economy, the largest in the world – bigger than the United States or China.

And despite recent events and pessimistic predictions by market analysts or populist forces, who think that looking back is the solution to today's and tomorrow's problems, the European Union has remained open for business and open for membership, with Croatia joining last summer. The Eurozone did not see any of its members quitting; on the contrary, Latvia joined and now Lithuania is expected to join us next year. So, something that is important for your studies -it's important not just to read the daily newspapers. Because when you open the newspaper, it can sometimes seem as if everything is crumbling. The predictions were that the Euro would implode; we lived with that mantra for two or three years. I was together with my colleagues from the EU saying that it would not happen. You can trust in the resilience of the Euro. But that popular view was fashionable. I call this the intellectual glamour of pessimism. It was fashionable to say that everything was going to crumble, not only in Europe, but also outside of Europe. We had discussed this issue in G20 with the American president, with the Chinese president, with the Russian president, the prime minister of Japan, the Brazilian president, explaining to them that yes, we have a problem - a very serious problem. We were very open and honest about it. We assured them that we would overcome this existential crisis. Not only were those ideas of exiting the Euro proved wrong, we now having more members joining the Euro-Zone.

But it has not been plain sailing. It would be dishonest to pretend otherwise. There have been inevitable challenges and setbacks.

The European Union is a Union of 28 democracies and decisions take time, decisions are complex, as in any democratic system. You cannot have one decision fully implemented within a day. As Commission President, I was dealing with these issues day and night; sometimes at very difficult moments. I never had any doubt that the commitment of the European leaders from European institutions – of our member states from the biggest to the smallest countries, from the richest to the most vulnerable - was to go on with determination. The resilience of the European Union is indeed something that should be understood.

The formula for overcoming these challenges has been to stick together, to engage, to compromise – in some languages, that word carries negative connotations. “To compromise” may indicate that we are giving away something important, but in European culture, it is a good word. “Compromise” means that we cannot always have everything we want, but we should accept what others want, to reach a positive result. The European compromise is a part of our methodology. Europe is now stronger than before, more united - no one quit, and in fact, we remain open. We are now more prepared; our economies are becoming more competitive for the globalized world.

Collective, regional and global challenges

In the European Union model, the word openness is very important. This is the model of democracy, open societies, open economies and open regionalism. History teaches us that the countries and nations who thrive are the ones who embraced change, who resisted protectionism and autarchic models, who opened themselves to the world and influenced, and were influenced by others.

The countries that have tried to exist in isolation could not adapt to changing times. And sooner or later they were in deep trouble, in deep crisis.

This is why we in the European Union support the principles of multilateralism and international cooperation. It is in our DNA. We support those principles not just through words but also deeds. The European Union (and its member states) is the major contributor to the United Nations system; we are the largest development and humanitarian donor, contributing more than half of the overall international assistance. We are also the largest trading bloc in the world and the largest source, and recipient of, overall foreign direct investment. We have signed more free trade agreements in these last five years than at any other time, and we are putting much focus on future agreements, for instance with the United States, Japan, and an Investment Treaty with China.

We were at the origins of the creation of the G20, following the financial crisis, as a way to involve emerging economies in the issues of global economic governance.

For the European Union, both internally and internationally, economic and political integration have always been a means to bring people, societies and countries closer together, with an objective of promoting the common values of democracy and the rule of law, and of establishing peace and cooperation.

These were also the principles that formed the basis of our Eastern Partnership, initiated in 2009. What happens in the countries in Eastern Europe and the South Caucasus matters to the European Union. The countries of this region are now closer neighbors, and their security, stability and prosperity are also a strategic interest of the European Union. We have therefore proposed a framework for closer cooperation based
on principles and values, which establishes four major objectives: political association, economic integration, mobility of people and
increased sectoral cooperation. 

This was always an offer, a proposition - never an imposition. This was also designed to promote more regional cooperation between Eastern Partner members and their neighbors. We have added a multilateral dimension into the Partnership to this effect. We are also open to the idea of differentiation. Ideally, all countries would be closely associated with the EU, but depending on their circumstances and specificities, we were ready to accommodate. So, it is not a one-sided, fixed model. We are looking for mechanisms to suit different circumstances, and that is what we proposed to Ukraine.

We negotiated an agreement over more than five years. The agreement was initialed. And then at the last moment the previous government decided not to sign it because of outside pressure. They said to us very openly that they wanted to sign it, but they could not, because of outside pressure. We were extremely disappointed but we also respected their decision, just as we have respected with other countries that did not want to sign an agreement. The case of Armenia is well known. They have that right to choose. However, the Ukrainian people reacted; they felt betrayed by this decision and decided to take their future in their own hands. And you know how the story unfolded.

From our side, this was never meant to be a power game with Russia. We do not seek exclusivity in our relations, for instance in trade. We see trade as a win-win. We are not trying to reach exclusive trade agreements with any country. On the contrary, we have heavily invested throughout these years in a good relationship with Russia. Russia is, of course, a very important country, which I personally consider a part of the great European civilization.

We also offered Russia a new agreement, which was aimed at bringing our strategic partnership to an ambitious level. Our agreements with Eastern Partner countries are perfectly compatible with the existing FTAs (Free Trade Areas) that Partner countries have with Russia. We remain interested in having good relations with Russia. We are also neighbors. No one is interested in going back to a past of confrontation. At least, no one in the European Union. But for that to happen, Russia, as well as all our partners, needs to abide by international norms and values and it needs to respect the sovereign decisions of our common neighbors.

EU- Azerbaijan: Looking ahead

Ladies and Gentlemen,

This wider picture shows that – globally, and in the European Union, the Eastern Partnership, and here in Azerbaijan - we have common challenges, which require the appropriate national, regional and international responses. Historically, Azerbaijan was always a gateway. This is, I think, party of the country's charm. When you look at the literature and history of this transition, this capacity to be related to different countries and civilizations, forms a part of your identity, your personality. I like to look at countries as I sometimes look at people. Each person has a personality - different by definition. Countries also have different personalities, and I think that is a good thing. If all countries looked alike, I think it would be boring - at least for foreign policy analysts and foreign policy experts. But you have this characteristic. Azerbaijan is a land of in-betweenness where the West meets the East. What we have proposed to you is precisely a partnership that reinforces that status; that brings Azerbaijan closer to Europe while remaining a bridge to other parts of the world. I am sure that is in the interests of Azerbaijan, as opposed to having exclusive relations with one country or one bloc of countries.

We are already close partners in many respects. We have a strategic partnership on energy, which is the backbone of our relationship, and the EU
also remains Azerbaijan's main trading partner with bilateral trade flows worth 17.9 billion Euros in 2013 (i.e. more than 42% of Azerbaijani trade). Nearly 50 percent of your exports go to the European Union, and 30 percent of your imports come from the EU. But I think we can do even better. In the framework of the Eastern Partnership, we have made a proposal to Azerbaijan to conclude an Association Agreement. This agreement should be based on values such as democracy, fundamental freedoms and rule of law - these are the common values of Eastern Partnership. This is very important. We believe that the long-term stability and prosperity of a country can only be achieved in the context of multi-party democracy and a free civil society. Sometimes it seems easier to go to authoritarian rule. This is a mistake. Because, eventually, tensions will appear. It is much better for longterm stability to invest in a society where every man, every woman understands that it is in his or her own interest to live in that society. It is able to protect if there are attacks, fundamentalist attacks, or attacks of any kind. This is what I believe is so important. Today we had a very open and friendly discussion with President Aliyev about these important issues. We believe it is important for the country to have a real multi-party democracy, and a free and independent judiciary. This is true not only politically, but also economically, because it creates and reinforces confidence in the longterm stability of the country. That is why we are able to discuss these issues with Azerbaijan, in relation to how we can give a form to our relationship. Based on today's discussions with President Aliyev we have agreed that we should now conclude a Strategic Modernization Partnership, which can serve as a guiding document for our practical cooperation. We are interested in supporting the political, economic and societal modernization of Azerbaijan, as expressed in Azerbaijan's 2020 Strategy.

This Strategic Modernization Partnership needs negotiations to start sooner rather than later. Together with President Aliyev today, we have agreed that the agreement should be concluded in the coming months, so that we can sign it very soon.

I think it could be a very good way of giving the relationship between EU and Azerbaijan the solid framework that it needs. It is true that our relationship has been evolving without new agreements. But if you look at the last agreements, they are outdated. They were reached in another context that is no longer relevant to modern Azerbaijan.

As part of our relationship, we are also interested in developing a strategic energy partnership, but I want to make it clear this is not the only interest in play. That is so vital for both of us. It is very important economically, but also from a strategic point of view in terms of security of supply. We have made good progress towards making the Southern Gas Corridor a reality, a vision that I launched with President Aliyev three years ago, to link the world's biggest single market to the world's largest concentration of hydrocarbons. At that time, many people said it would not work. When there is a vision, there are always people who raise objections. But the reality is that it is happening. This project can encourage greater economic cooperation, improve energy security and create over 30,000 jobs in all the countries along the Southern Gas Corridor.

Our objective remains that the entire infrastructure project along the corridor will be operational as scheduled (by 2019). This is as important for European energy security as it is for the future economic development of Azerbaijan. 

We also want to go beyond official contacts and foster closer links between our people and societies, and I count very much to build on our Visa Facilitation Agreement, Readmission Agreement and a Mobility Partnership Agreement for progress in this respect.

I also know that Azerbaijan and the countries in the region will not be able to prosper fully and tap into all the potential of their youth if we do not reach a solution for the conflicts that still affect the region. In addition, I know that here, closer to home, there remains the thorny issue of Nagorno-Karabakh.

Twenty years after the ceasefire, peace remains elusive, but it is clear that the status quo is simply unsustainable. The EU calls on Azerbaijan and Armenia to embark on result-oriented negotiations with a view to reaching a peace agreement, and stands ready to do all it can to play a constructive role and bring about this peace and its implementation in line with the principles agreed, and of course encouraging the role of the Co-Chairs of the Minsk group.

Ladies and Gentlemen,

Globalization means that we share common opportunities and challenges
more than ever. As you look towards the future, as you make the necessary reforms in your country, the European Union remains ready to support you as an equal partner. 

Our partnership can grow from strength to strength, bilaterally, regionally through the Eastern Partnership as we start to look towards the next summit in Riga, and internationally, through organizations such as the WTO.

It is in our interests to make the necessary changes and reforms to shape the new world order.

A Partnership underpinned by a similar vision of peace and prosperity; a Partnership of human rights, democracy, justice, social and gender equality, and a properly functioning civil society; a partnership that is forward-looking, ready for the digital age, with the necessary infrastructure, and with sustainable energy at its core.

A partnership that looks towards investing in education, innovation and research. A partnership that looks to promote these shared objectives internationally and in our collective neighborhood.

This coming year is an exciting year for Azerbaijan, a year when big decisions can be made.

A year that will offer European countries and the world a better view of Azerbaijan. Next year's first ever European Games provide a wonderful opportunity to showcase what you have to offer, so that everyone can
appreciate Azerbaijan in the same way as Reza Deghati, who said:

“Baku is like an old forgotten book that you discover in your grandmother's attic. Once you have wiped off the dust and delved into its pages, you stand amazed at its treasures. Azerbaijan's intellectual resources far exceed its natural resources. The real prize here is not oil but rather, history, culture and people”.

Thank you.