Armenia opts for Russia trade bloc instead of EU membership

Armenian President Serzh Sargsyan has said he wants to join a trade and political union with Russia instead of an EU alternative.

The decision was announced in a statement on the Kremlin's website during his visit to Moscow to meet Russian leader Vladimir Putin on Tuesday.

Sargsyan, before flying back to Yerevan, confirmed the news.

But he added, in a statement on his own website, that he still wants good EU relations.

"This decision is not a rejection of our dialogue with the European institutions. During recent years, Armenia, with the support of European partners held a number of important institutional reforms. And today's Armenia, in this sense, is considerably a more effective and competitive state than years ago. We intend to continue these reforms also in the future," he said.

The news came as a surprise to EU officials.

The EU has concluded negotiations on a political association and free trade pact with Armenia and expected to initial it at an EU summit with former Soviet states in Vilnius in November.

If Armenia does become a full member of the Russian-led customs bloc, along with Belarus and Kazakhstan, it cannot sign the EU pact at the same time.

EU diplomats in Yerevan held crisis meetings on Tuesday evening to get an insight into events.

Putin has said he wants all former Soviet republics, except the Baltic states, which are EU members, to join his customs bloc.

He plans to transform it into a political union, the Eurasian Union, in 2015.