Brussels, 15 May 2012
ENP Package, Country Progress Report – Georgia
The European Commission and the High Representative of the Union for Foreign Affairs and Security Policy published on 15 May 2012 the annual “neighbourhood package”, consisting of a joint communication (“Delivering on the new European Neighbourhood Policy”) making an assessment of the first year of implementation of the new ENP adopted in 2011, a separate joint communication proposing an “Eastern Partnership Roadmap”, a report on the “Partnership for Democracy and Shared prosperity” with Southern Mediterranean (including a roadmap for future action), an Eastern Partnership progress report, 12 country reports (on developments in 2011 and with a set of recommendations for the future), including one on Georgia, and a statistical annex.
In 2011 the EU and Georgia made progress in deepening and broadening EU-Georgia relations within the Eastern Partnership framework. Negotiations for a Deep and Comprehensive Free Trade Area (DCFTA), as an integral part of the future Association Agreement, were launched in December. Georgia made good progress in implementing the Visa Facilitation and Readmission agreements, which entered into force in March 2011.
On the basis of this year’s report, and with the view to sustained implementation of the ENP Action Plan in 2012, Georgia is invited to:
Ensure free and fair parliamentary elections, in line with internationally recognised democratic standards; address identified shortcomings in the electoral legislative framework, in a consultative and inclusive manner, in good time before the elections.
Enhance its engagement policy towards breakaway regions and reconciliation/conflict resolution through pragmatic cooperation with de facto authorities and the provision of financial resources for engagement; take pragmatic and constructive steps to encourage trade, travel and investment across the Administrative Boundary Line; review the Law on Occupied Territories; 'Status Neutral Travel Documents', a welcome step towards the de-isolation of inhabitants of Abkhazia and South Ossetia, should not be the only means of travel for these populations until they are more widely accepted by them. The provision of health care and other social services to inhabitants of the breakaway regions is also an important step towards reconciliation: it should be extended without preconditions, such as acceptance of Georgian ID documents.
Maintain and enhance Georgia’s constructive engagement in the Geneva International Discussions, notably, working together towards sustainable security arrangements; in this respect, a clear commitment by Russia on the non-use of force would be necessary.
Continue to improve the living conditions of all groups of internally displaced persons (IDPs) and enhance efforts to provide livelihood options and conditions to enable any IDPs who choose to stay in Tbilisi administered territory to integrate fully into society.
Continue to strengthen freedom of expression and opinion; implement the Law on Transparency of Media Ownership; ensure balanced media coverage and equal access to the media and advertising in the run-up to the elections.
Continue the reform of the justice system and strengthen the independence and efficiency of the judiciary; ensure further liberalisation of criminal justice policies and practice in line with Council of Europe standards; revise regulations on administrative detention in compliance with fair trial norms; reflect the recommendations of the Public Defender’s Office in policy making.
Increase accountability and democratic oversight of law enforcement agencies; combat impunity and investigate fully any accusations of human rights violations by law enforcement agencies.
Improve labour rights; fully implement ILO core conventions No 87 Freedom of Association and the right to Organize and No 98 Right to Organize and Collective Bargaining and recommendations issued by ILO in this respect to Georgia in 2010; support the creation of a fair and transparent institutionalised labour conflict regulation mechanism to prevent the escalation of local labour conflicts.
Continue to advance sectoral reforms and regulatory approximation to the EU acquis in trade and trade-related areas, based on the ENP AP and all recommendations identified in this respect in the preparation for the DCFTA.
Political dialogue and reform
In the field of deep and sustainable democracy, Georgia passed several amendments to key laws in the political and justice, freedom and security domains. Georgia adopted a new Election Code in December and continued to make progress in the fight against corruption. But questions remained about the fairness of the election environment, including the difference in the number of votes required to elect a deputy in each electoral district, ambiguities in the electoral dispute mechanisms, equal access to media and insufficiently regulated use of state resources for political purposes by the ruling party.
Georgia’s governance also continued to be characterised by a dominant executive branch, weak parliamentary oversight and an insufficient degree of independence of the judiciary. The performance and the accountability of Georgian law enforcement agencies came under scrutiny after the violent dispersal of protests in May. The reform and further liberalisation of the criminal justice sector continued in accordance with the plans and programmes agreed between the Government and the EU, while the large prison population remained a concern.
In the area of Human Rights, Georgia took an important step towards ensuring freedom of religion. Significant challenge remained in terms of full integration and representation of women, ethnic minorities and persons with disabilities. There were increasing concerns that property rights were not sufficiently respected.
Concerning the resolution of the conflicts in the breakaway regions, the Government of Georgia took important steps in implementing its “Action Plan for the engagement with the Occupied Territories”. However the continued application of the law on Occupied Territories remained a concern for the effectiveness of the engagement strategy. The EU continued to provide support to IDPs through budget support and technical assistance which amounted to EUR 43.5 million in the period under review.
Economic and social reform
Georgia consolidated its economic recovery in 2011 (real GDP growth 6.8%) and broadly maintained macroeconomic stability. Inflation (7.1 % in 2010) reached 8.5%. The fiscal deficit was reduced from 6.6% of GDP in 2010 to about 3.6% of GDP in 2011. Its external position remained fragile however.
By accelerating the fiscal consolidation process and continuing reforms to improve the economic and business environment, Georgia made further progress towards accomplishing the priorities of the Action Plan in this domain.
The government announced a 10-point strategic plan of socio-economic policy and signed an Agreement on Social Partnership Policy in Vocational Education and Training (with 16.5% in 2011, Georgia’s unemployment rate remains the highest in the region).
Respect for labour rights and in particular Georgia's non-compliance with certain provisions of international labour rights conventions continued to be of concern.
Trade-related issues, market and regulatory reform
Bilateral trade continued to improve in 2011 at a steady pace year-on-year but has not yet fully recovered for both imports and exports. Total bilateral trade amounted to EUR 2.2 billions in 2011, indicating a more dynamic recovery of EU exports to Georgia as compared to imports from Georgia.
Georgia took steps in ensuring free movement of goods, meeting sanitary and phyto-sanitary standards, improving business climate, securing the rights of minority shareholders, reforming public finance management, respecting intellectual property rights.
After progress made by Georgia towards implementing the remaining "key recommendations" was considered sufficient, the EU decided to launch negotiations for a DCFTA in December.
Cooperation on justice, freedom and security
Georgia launched work to enhance migration management, addressing in particular the development of a comprehensive strategy and the creation of a central database. Following their entry into force in March 2011, implementation of the EU-Georgia Visa Facilitation and Readmission Agreements started smoothly, as assessed by the first two meetings, in June and November, of the Joint Committees.
On the basis of a new 2011-2012 National Action Plan for Combating Trafficking in Human Beings, Georgia effectively addressed the fight against trafficking in human beings. Georgia has not yet ratified several important conventions in the area of organised crime and judicial cooperation.
In the field of drugs, some progress was registered on prevention and rehabilitation, but Georgia still lacks a comprehensive national anti-drug control strategy and action plan.
Transport, energy, environment, the information society, research and development
Transport: Georgia started an accession process to the Agreement Concerning the Work of Crews of Vehicles Engaged in the International Transport and to the Convention on International Carriage of Dangerous Goods by Road. In the maritime sector, the law on the Education and Certification of Seafarers aligning with Standards of Training, Certification and Watchkeeping convention entered into force in January 2012.
Energy: Georgia remained a reliable energy transit country for Caspian resources and confirmed its full support for the development of the strategic Southern Gas Corridor. As observer, it participated in work under the Energy Community. More efforts are needed on energy efficiency.
Climate change: Georgia is encouraged to engage in the new carbon market mechanism to be developed following the UNFCCC COP 17, as well as to fully implement the Cancun and Durban agreements.
Environment: The adoption of the second National Environmental Action Plan for 2012–2016 is still pending. There were no significant developments with regard to Georgia’s ratification of, or accession to, environment related conventions and protocols of the UN Economic Commission for Europe. The Regional Environmental Centre for the Caucasus continued its activities in 2011; its founders want to see its role enhanced in the years to come and tried to find a solution to its debt problem.
Research and innovation: Georgia continued to have a good level of participation in the 7th Framework Programme with a growing number of successful applications (36 research organisations involved in 26 projects).
People-to-people contacts, education and health
Education: Education reform continued to benefit from EU-Georgia cooperation and support via the Tempus IV programme (five additional projects) and the Erasmus Mundus programme (63 scholarships and mobility grants).
Culture: Georgia participated in three projects under the 2010 Special Action for ENP countries under the Culture Programme. Youth organisations continued benefitting from the exchange opportunities under the Youth in Action programme (153 projects involving 469 participants).
Health: Georgia continued health sector reform, developed a health care strategy until 2015, introduced a financing system that improves patient’s coverage and established a centre for mental health and drug addiction.
EU–Georgia – BACKGROUND
The European Neighbourhood Policy governs the relations between the EU and Georgia. 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 establishing 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: Entry into force of the EU-Georgia Partnership and Cooperation Agreement.
2005: Approval of the EU-Georgia Action Plan.
2008: August 2008 war with Russia. It was stopped thanks to the EU mediation. The EU set up civilian monitoring mission (340 observers) and provided a post-conflict assistance package of up to EUR 500 million from its budget. The EU’s Civil Protection Mechanism (MIC) was mobilised in the aftermath of the conflict and facilitated the arrival and use of the civil protection assistance provided by the EU Member States.
2008-2009: An 18-months Stand-By Arrangement was approved by the International Monetary Fund, in August 2009 extended until June 2011 and increased to EUR 835.7 million. In addition the EC provided a grant of EUR 46 million of Macro Financial assistance.
2007-2010: the ENPI envelope for Georgia stands at EUR 120.4 million.
2009: Neighbourhood Investment Facility - one project was approved (Tbilisi Railway Bypass Environmental Clean-up), committing EUR 8.5 million in grants and expected to leverage EUR 253.5 million.
2010: Launch of the Association Agreement negotiations with the EU.
2011-2013: The new National Indicative Programme (NIP) 2011-13 for Georgia was adopted in May 2010 and has a budget of EUR 180.3 million. The programme is geared towards supporting the achievement of key policy objectives as outlined in the EU-Georgia Action Plan (AP) and pursues four priorities: (1) support for democratic development, rule of law and governance; (2) support for economic development and ENP AP implementation; (3) poverty reduction and social reforms and (4) support for peaceful settlement of Georgia's internal conflicts.
2011: Entry into force of visa facilitation and readmission agreements.
2011: One-year extension of the mandate of the EUMM
2011: Launch of the Deep and Comprehensive Free Trade Area (DCFTA).
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