By Nigar Orujova
The European Commission called 2013 a decisive year in EU-Azerbaijani bilateral relations.
The Commission made the remarks in a report on Azerbaijan within the frameworks of the "Neighbourhood Package" published on the EU's official website on March 27.
The report on Azerbaijan underlines the main developments and reform efforts in 2013, and makes some recommendations for 2014.
"Azerbaijan's participation in the Eastern Partnership Summit in Vilnius, which coincided with the signing of the Visa Facilitation Agreement and the Mobility Partnership, underlined the potential to further develop EU-Azerbaijani relations," the report said.
Negotiations continued on the Association Agreement and a Strategic Modernization Partnership, and cooperation continued on energy issues, the report added.
"The Strategic Energy Partnership with Azerbaijan was strengthened; steps were taken in view of the construction of the Southern Gas Corridor which should reinforce the European energy security," it said.
The report also said Azerbaijan took measures to fight corruption, following the recommendations of the 2012 ENP Action Plan.
Azerbaijan's external position remained strong, supported by the sound reserve standing and low level of public debt that significantly mitigated the risks of volatility in oil prices in 2013, the report said.
"However, the non-oil current account deficit of 17.4 percent of GDP remained large, due to government-related non-oil imports and gas-related Foreign Direct Investment," the report read. "Azerbaijan continues to rely on hydrocarbon sales to finance state expenditure, as transfers from the State Oil Fund of Azerbaijan (SOFAZ) accounted for 58.43 percent of total revenue in 2013, leading to a budget surplus of 0.47 percent of GDP."
The budget shows a deficit of 19.1 percent of GDP when the SOFAZ transfers are excluded, the report said.
In December 2013, Azerbaijani government raised retail prices for various fuel products by 25 to 33 percent, while tariffs for various telecommunication services were reduced, the report read.
The report also touched upon the Armenian-Azerbaijani Nagorno-Karabakh conflict, noting that the stalemate in the Minsk Process aimed at settling the Nagorno-Karabakh conflict continued for most of 2013.
"However, the presidents of the two countries reconvened in November 2013 for the first time since January 2012 in a summit in Vienna, mediated by the OSCE Minsk Group co-chairs, at which they agreed to advance negotiations towards a peaceful settlement and meet again in the months ahead," the report said.
The report also noted that an upsurge of violence along the line of contact was witnessed in early 2014, and that the EU continued to give its full support to the OSCE Minsk Group co-chairs in their attempt to facilitate a lasting settlement.
Recommendations for 2014
The European Commission recommended Azerbaijan to ensure the effective and comprehensive implementation of the January 2013 resolution of the Parliamentary Assembly of the Council of Europe on honoring its obligations and commitments, continue the implementation of the human rights action plan adopted in December 2011 and the reform of the judiciary, and adopt the Judiciary Reform Program 2014-2020 and the policy of economic diversification and development of the regions.
The Commission also advised Azerbaijan to implement the actions scheduled for 2013-2014 under the Memorandum of Understanding in the field of energy, step up efforts towards agreement on the Madrid Principles as a basis for peace under the commitments undertaken by the presidents of Azerbaijan and Armenia within the Minsk Group, promote an environment conducive to progress in the conflict settlement, and encourage and support related peace-building activities.