The European Commission and the High Representative of the Union for Foreign Affairs and Security Policy published on 26 May 2011 the annual “neighbourhood package”, consisting of a communication proposing a reviewed European Neighbourhood Policy (ENP), 12 country reports on developments in 2010, including one on Armenia, a sector report and a report on the Eastern Partnership. Overall, in 2010 Armenia made some progress in the area of political dialogue and reform. Positive steps were taken to overcome the political crisis, with the gradual release of a number of persons detained for charges related to the March 2008 events. Good progress was reported on decriminalisation of defamation and on strengthening of the Office of the Human Rights Defender. Some progress was made on enhancing transparency in the court system but none on enhancing the independence of the Judiciary. Progress regarding media pluralism was limited however freedom of expression and information improved slightly, although further efforts are needed. 2010 saw no progress in prison conditions. Cases of torture and ill treatment were reported in detention facilities, police stations and among military conscripts and these were generally not adequately investigated. In view of the severe recession resulting from the global economic crisis, in November 2010 the EU and Armenia agreed a € 100 million financial assistance package. Nevertheless, the crisis hampered progress towards economic reform, poverty reduction and the protection of the environment. Overall, Armenia maintained prudent macroeconomic policies and introduced some measures to mitigate the effects of the downturn. In 2010 negotiations on a peaceful resolution of the Nagorno-Karabakh conflict continued at the highest level leading, among other things, to an agreement to exchange prisoners of war. In 2010 Armenia made progress in some areas of the ENP Action Plan, including political dialogue and reform. Negotiations of the EU-Armenia Association Agreement were launched in July 2010 and progressed at a good pace. Political dialogue and governance, including CFSP · Armenia took active steps in 2010 for the development of a National Human Rights Protection Action Plan. The Human Rights Defender Office (HRDO) continues to monitor the situation of human rights and fundamental freedoms in the country (in 2010 it produced two ad hoc reports). However, cases of torture and ill treatment in detention centres are still reported and no progress was made in improving prison conditions or the juvenile justice system. · A new draft electoral code bringing the Armenian legislation further in line with international obligations was submitted for public discussion. · Progress was made on the implementation of judicial reforms (in accordance with Strategic Action Plan 2009-11) with regard to transparency in the court system, but the independence of the judiciary remains a serious concern. · Efforts were made in the fight against corruption, including to improve transparency in the public sector. · Freedom of expression and information improved, however the amendments to the Television and Radio Law were criticised by the OSCE as not promoting media pluralism. The freedom of assembly has improved. · In September 2010 Armenia signed the CoE Convention on the Protection of Children against Sexual Exploitation and Abuse and approved a Gender Policy concept. Armenia aligned itself with 28 out of 44 of the EU’s Common Foreign Security Policy declarations that it was invited to join. Two Political and Security Committee Political Dialogue meetings between Armenia and the EU took place in June and September 2010. Economic integration and trade · Economic activity in 2010 recovered from the deep recession. GDP grew by around 4%. The unemployment rate fell to 6.9% at the end of the year. · Domestic and external supply shocks and the decline of agricultural output brought the inflation rate to 9.5% in November 2010. The reference interest rate of the Central Bank remained at the level of 7.25%. · As a result of the crisis, the Armenian government continued the suspension of the Sustainable Development Programme on poverty reduction. · Bilateral trade with the EU improved in 2010, EU exports to Armenia increased by 4.2%, while exports of Armenian products to the EU increased by 59.9% (they remain however concentrated in a few commodities of low value added). · Armenia made some progress in addressing the EU recommendations preparing the DCFTA negotiations. The government approved the strategy for quality infrastructure reform, the institutional capacity of the customs service was improved, progress was made regarding free movement of goods, sanitary and phyto-sanitary standards, etc. Promoting mobility, fighting irregular migration · The first meeting of the EU-Armenia Subcommittee on Justice, Freedom and Security took place in Yerevan in July 2010. In November 2010 Armenia adopted the Border Security and Comprehensive Border Management Strategy. Work continued also on the National action plan on migration and asylum. · Some actions were taken in the field of eliminating the trafficking of human beings, combating drugs and money laundering. No progress was reported in the area of police and judicial cooperation and data protection. The Southern Caucasus Integrated Border Management (SCIBM) was inaugurated in March 2010. Sector cooperation - examples · Transport: The implementation of the 2009-20 transport sector development strategy started. Progress was achieved on the North-South road corridor and on the rehabilitation of the rail links. The National Road Safety Council of Armenia became operational and the Road Safety Strategy was implemented, leading to a drop in accidents. · Energy: In May 2010 Armenia applied for observer status under the Energy Community Treaty. The first EU-Armenia energy subcommittee was organised in Yerevan in Nov 2010. Armenia pursued the safety upgrading of Medzamor Nuclear Power Plant (MNPP) and continued to credit the nuclear decommissioning fund in view of the planned closure of this plant by 2016. The EU continues to request closure as soon as possible before this date since the MNPP cannot be upgraded to meet internationally recognised nuclear safety standards. · Environment: The Regional Environmental Centre for the Caucasus (REC) continued to carry out activities, including in the fields of information and public participation. Armenia ratified the Protocol on Strategic Environmental Assessment to the UNECE Convention. It also submitted the second National Communication to the UNFCCC on climate change. · Education: In the context of Bologna Process, a strategic plan 2010-15 was developed. Armenian students actively participate in the Erasmus Mundus Masters courses. In addition a Jean Monnet interdisciplinary module was awarded to Yerevan State University focussing on EU-Caucasus relations. · Culture: Armenia participated in the 2010 Special Action for ENP countries under the Culture Programme. · Health: The European Commission and Armenia established communication channels for the exchange of epidemiological information in the event of a public health emergency. EU–Armenia – BACKGROUND THE POLICY The European Neighbourhood Policy governs the relations between the EU and Armenia. Since 2009 the EU implements the Eastern Partnership, the Eastern dimension of the ENP framework, aiming at substantially upgrading engagement with the six Eastern neighbours via: - a Bilateral track, whose objectives include the establishment of Association Agreements with Deep and Comprehensive Free Trade Areas, once conditions have been met, as well as progress on visa and mobility issues, and - a Multilateral track (i.e. intergovernmental platforms and Flagship Initiatives). This approach allows for gradual political association and deeper economic integration. FACTS AND FIGURES 1999: The EU-Armenia Partnership and Cooperation Agreement entered into force. 2006: The EU-Armenia Action Plan was approved 2009: The EU Advisory Group to Armenia (financed by the EU) started its activities with the aim of supporting the Armenian authorities in the implementation of the key areas of the ENP Action Plan 2009: The Neighbourhood Investment Facility committed € 14.6 million in grants and technical assistance for two projects in the transport sector. Armenia is also eligible for three regional projects, committing € 24 million in the energy and financial sectors 2007-2010: The ENPI envelope for Armenia stands at € 98.4 million 2011-2013: The new National Indicative Programme (NIP) 2011-13 for Armenia was adopted in March 2010 and has a budget of € 157.3 million. The programme is geared towards supporting the achievement of key policy objectives as outlined in the EU-Armenia Action Plan and pursues three priorities: (1) democratic structures and good governance, (2) trade and investment; regulatory alignment and reform, and (3) socio-economic reform and sustainable development. For more information: http://ec.europa.eu/world/enp/documents_en.htm http://ec.europa.eu/external_relations/armenia/index_en.htm http://ec.europa.eu/world/enp/index_en.htm

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