The year "2006 should be the year that takes our partnership up a gear," the EU's commissioner for foreign relations Benita Ferrero-Waldner said Wednesday, on the eve of her first official visit to Georgia, Armenia and Azerbaijan later this week.

Her visit should re-start the negotiations over the EU's Action Plan with the 3 formerly Soviet Republics, a mechanism designed to promote economic integration with the EU and more political cooperation between the three countries.

The EU talks ran into trouble last year when Cyprus objected to the direct flights between Azerbaijan and Turkish-controlled Northern Cyprus. But that is only one of the political hurdles that complicate the EU's integration strategy.

Azerbaijan and Armenia remain in a state of very cold peace, despite a new round of talks supposed to resolve the issue of the disputed territory of Nagorno-Karabakh. An uneasy truce still holds, but Armenia's relations with Turkey (an EU candidate member) remain embittered by memories of the "Armenian genocide" at the hands of the Ottoman Empire 90 years ago. The Turkey-Armenia border has been closed for the past 14 years.

The tense and tangled relations between Georgia and Russia are even more difficult, with Russian "peacekeeping" troops still in place in Georgia's rebel province of South Ossetia. Georgian President Mikhail Saakashvili last month suggested that his country was facing similar energy blackmail after what Moscow called "accidental explosions" interrupted Georgia's gas supply in the middle of a bitterly cold winter. Georgia is now negotiating an alternative pipeline route with Iran for an alternative supply, just as the EU-3 of Britain, France and Germany have voted to report Iran's nuclear program to the United Nations for possible sanctions.

Russia still sees the Caucasus as its back yard, an area critical to its security, and Russia's energy supplies are now being used not only to maximize income but to further Russian security interests. And as Russia's biggest customer for energy, and also as Russia's main supplier of foreign investment, the EU countries have mixed feelings about pursuing too aggressive a policy in the Caucasus.

But Azerbaijan is a major source of oil, and the pipeline through Georgia to the Black Sea is the obvious route for Europe to tap into Central Asian energy reserves, while also diversifying their supply away from Russia. While trying hard to minimize the risks for relations with Russia, the EU has little choice but to become a major player in the politics of the Caucasus, a role that is likely to strengthen as Turkey's accession negotiations with the EU get under way. Once complete, the Caucasus nations will be on the EU's frontier.

Moreover, the EU is working alongside NATO, if not hand in hand with the U.S.-led alliance. In his State of the republican address to parliament this week, President Saakashvili said, "Georgia is a stone's throw away from NATO accession" and declared that his country would become a full NATO member in 2008, and would gain formal candidate status by the end of this year.

"Georgia's borders will become NATO's borders," Saakashvili said, a remark evidently calculated to irritate Russia. He also claimed that unnamed outside forces were seeking to annex parts of Georgia's sovereign territory, a threat that he said demanded "a proper international response."

Moscow by contrast has accused the Saakashvili government of staging provocations against its "peacekeeping troops" in South Ossetia and Abkhazia, two traditionally Georgian provinces in which Georgia accuses Moscow of supporting the separatist regimes. In the last few days, Georgian military police have detained three Russian officers in the conflict zone. South Ossetian forces were put on alert after Georgia brought in troop reinforcements and Russian peacekeepers set up security roadblocks outside Georgian villages.

Before her Caucasus trip, the EU's Ferrero-Waldner met Russian Foreign Minister Sergei Lavrov for talks that dealt mainly with Hamas and Iran, but later confirmed that the Caucasus situation had been raised. Ferrero-Waldner told her Russian counterpart that the Russian-Ukrainian energy dispute in January was an "eye-opener" for the EU, making energy security into a priority of EU foreign policy.

While the EU tries to have it both ways, enjoying good relations with Russia while playing a greater role in the Caucasus, Georgia is seeking to force the issue. The Georgian parliament this week passed a resolution that openly accused Russia of trying to annex the two separatist provinces, while at the same time the pro-Russian opposition 'Justice' party in Georgia threatened to topple the Georgia government with "a revolution of nettles."

Part of Ferrero-Waldner's mission will thus be to push the EU plan to defuse the situation by replaced Russia's 13-year "peacekeeping" operation in South Ossetia with an international force of largely civilian peacekeepers, mainly police provided by the EU countries, with a small military component. Members of Russia's parliament, the Duma, are currently in South Ossetia, warning that a withdrawal of Russian troops would lead to a Georgian invasion and civil war. Georgia's Defense Minister has also raised the tension with combative TV interviews in which he declares South Ossetia will be restored to Georgian rule by the end of this year.

In short, the EU mission to the Caucasus is looking like a high-risk operation, with the intended agenda of economic integration likely to be overwhelmed by nationalist rhetoric and saber-rattling. Some EU diplomats shrug and say that after dealing with the Balkans for the past 15 years, the EU is getting accustomed to operating in a dangerously unstable neighborhood. This is true as far as it goes, but the Balkans wars twice required U.S. military intervention to restore peace, and there was no oil in the Balkans, and the EU felt no nervousness about the security of its energy supplies. In the Caucasus, the stakes therefore look worryingly higher.

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