During the Gorbachev period in the 1980s, rising tensions between Armenia and Azerbaijan over Nagorno-Karabakh. Liverpool 2018 2019 UEFA Champion League Champions shirt. In the same decade, Soviet Armenia suffered a devastating earthquake in the city of Spitak, in 1988. In 1991, the Soviet Union broke down and Armenia re-established its independence. Armenia and Azerbaijan continue the controversy, leading to Nagorno-Karabakh war. Despite a ceasefire since 1994, Armenia has not resolved the conflict with Azerbaijan over Nagorno-Karabakh. The economies of both countries were affected by the war. However, Armenia is still the 27th free economy in the world . In 1995, the Constitution was ratified through a referendum, strengthening the President’s power.