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Armenia divided by choice of Russia over Europe

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(YEREVAN) - A decision by Armenian President Serzh Sarkisian to sign up to a Russian-led Customs Union has slammed the brakes on closer ties with Europe and prompted soul-searching about the future direction of the former Soviet state.

Sarkisian's surprise announcement earlier this month that Armenia will sign up to the project championed by Russian President Vladimir Putin stunned many Armenians who see the southern Caucasus state as part of Europe.

After lengthy negotiations, Armenia -- along other ex-Soviet states including Georgia and Moldova -- had been set to pencil a free trade deal and take the first step towards future EU integration at a conference in the Lithuanian capital Vilnius in November.

The decision to sign the customs union with Russia has been met with

street protests, so far small-scale, and widespread debate.

"We came here to say that we will not let this happen," said protestor Lusine Hovsepyan, 34, a computer programmer, at a recent demonstration in Yerevan.

"If it's a choice between the EU and this customs union, then we choose the more developed, more democratic Europe."

But security concerns over the disputed territory of Nagorny Karabakh and pressure from long-time ally Moscow appear to have won out against hopes of closer ties to Europe.

'Impossible to join any other zone'

"It is clear that if you depend on Russia on a military, economic and political level -- especially with the Karabakh issue and closed border with Turkey -- then it is impossible to join another economic zone," said Tatul Hakobyan, a political analyst at Yerevan-based Civilitas Foundation.

Armenia relies heavily on Russia for weaponry that it sees as key to maintaining a balance with oil-rich arch-foe Azerbaijan in their festering conflict over Nagorny Karabakh.

As Yerevan had edged closer to Brussels, Moscow sent a series of uncompromising messages to its ally -- hiking the price of the gas it delivers to the tiny Caucasus nation and announcing a massive arms deal with Baku.

Fearful of losing influence in what it considers its backyard, Moscow has banned imports of wine from Moldova and threatened to end a special partner status with Ukraine.

That has left many in Armenia fearing that the country has caved in to Moscow by agreeing to a union that some Western diplomats describe as the first step in Putin's attempts to revive the Soviet Union.

"Armenia is joining the customs union not as an equal partner but as a humiliated and down-trodden beggar," Levon Ter-Petrossian, an opposition leader and Armenia's first post-independence president, said at a recent political meeting.

However, the ruling party argues that the decision to join Customs Union -- which also includes Kazakhstan and Belarus and is seen by the Kremlin as a pre-cursor to a more ambitious Eurasian Union -- makes sense, even despite Armenia not sharing a land border with Russia.

"There is no great sensation here," ruling party lawmaker Eduard Sharmazanov told AFP. "Armenia is just continuing to deepen its relationship with a strategic partner in line with the economic and political interests of our country."

'Will remain a country of oligarchs'

Moscow's closest ally in the Caucasus, Armenia has a huge diaspora living in Russia that last year sent remittances back home worth an estimated $1.5 billion.

For sociologist Gevorg Pogosyan this helps explain why he thinks a majority of Armenia's would likely support closer ties with Russia.

"You don't need visas to visit there and there is no language barrier," Pogosyan said. "The decisive factor though is that the well-being of a large number of families depends on these transfers home."

He said that around 55 percent of Armenians favour Russia over the European Union.

Despite the strong ties with Russia, those opposed to the customs union fear that deepening links with its giant northern neighbour will see Armenia head in the wrong direction.

"Such an agreement cannot be in Armenia's interests because it won't resolve our main problems: corruption, economic monopolies and lack of political competition," said Armen Martirosyan of Armenia's liberal Heritage opposition party.

"Armenia, by choosing the customs union instead of agreements with the EU will remain a country of oligarchs and monopolies just like Russia," Martirosyan said.

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