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Brussels, 25 June 2014
European Commission's support to Georgia
The European Commission met on 21 May 2014 the government of Georgia, led by Prime Minister Garibashvili.
The meeting confirmed Georgia's unique relationship with the EU. The European Commission is fully committed to political association and economic integration with Georgia, and to support Georgia's programme of key political, judicial and economic reforms. The EU and Georgia share the common objective of a democratic, stable and prosperous Georgia and look forward to the early signature of the EU-Georgia Association Agreement.
This MEMO provides background information on a number of related issues. It is not intended to be comprehensive.
ASSOCIATION AGREEMENT INCLUDING A DEEP AND COMPREHENSIVE FREE TRADE AREA
The EU and Georgia will sign on 27 June 2014 an Association Agreement including a Deep and Comprehensive Free Trade Area. Following Georgian ratification of the Association Agreement, provisional application could start by 1 October 2014.
This will open a new chapter in EU-Georgia relations. Underlining the importance that both sides attach to fundamental values, democracy and the rule of law, the Association Agreement will significantly deepen political and economic relations between Georgia and the EU, and give Georgia the opportunity to participate gradually in the largest single market in the world. It focuses on core value-related reforms, on economic recovery and growth, governance and sector cooperation in areas such as, for example, energy cooperation, transport, environment, public health, consumer protection, education, training and youth as well as cultural cooperation.
The EU and Georgia finalised negotiations on the Agreement in 2013 and it was initialled in November at the Eastern Partnership summit in Vilnius.
The text of the Association Agreement can be found here.
New financing agreement of support of EU-Georgia agreements:
On 21 May 2014 Prime Minister Garibashvili and President Barroso signed a Financing Agreement in Brussels launching a new programme in support of the EU-Georgia Agreements. It will help a number of core Georgian institutions central for implementing the Association Agreement, including the Deep and Comprehensive Free Trade Area (DCFTA), and the Visa Liberalisation and Readmission Agreements.
Better governance of the main institutions, improved business and investment climate and economic development are the main objectives of this new programme. Through this programme, which will be carried out over five years, the European Union will allocate up to €19 million to the following Georgian institutions: Public Service Development Agency, National Food Agency, Georgian Agency for Standards and Metrology, Georgian Accreditation Centre, Parliament of Georgia, Public Defender's Office and the State Audit Office to support the legislative alignment process to EU standards and the provisions of the Association Agreement. Georgia will contribute €550 000 to this programme.
This programme builds on two previous programmes of the kind (in 2011 and 2012) known as Comprehensive Institution Building (CIB), which were conceived in the framework of the Eastern Partnership launched in May 2009. The rationale behind this initiative can be defined as an "A to Z support" to key institutions involved in the implementation of EU-Georgia Agreements. The Comprehensive Institution Building Programme helps Georgia to better benefit from closer cooperation with the European Unionin the fields of democracy and good governance, energy security and, among others, environment protection.
EU ASSISTANCE TO GEORGIA
The EU assistance to Georgia amounted to €452 million from 2007 - 2013.
The new programming document (Single Support Framework), adopted on 11 June, will shape future EU cooperation with Georgia in the period 2014-2017 in three priority sectors: Public Administration Reform Agriculture and Rural Development; and Justice Sector reform.
Assistance will also be provided to support the implementation of new agreements between the European Union and Georgia, in particular the Association Agreement, including the Deep and Comprehensive Free Trade Area (DCFTA). Support to civil society to promote their role in society and their involvement in policy dialogue will continue.
Latest cooperation programmes
On 6 May 2014, the European Commission announced a support package for Georgia, worth €30 million. (For more information see IP/14/512). This support will help modernise public institutions linked to the implementation of the Association Agreement; improve competitiveness of rural business and trade opportunities with the EU; and promote protection of the rights of minorities and vulnerable groups. Funding for this package is granted through the 'More for More' mechanism of the new European Neighbourhood Instrument: the multi-country umbrella programme.
Regular allocations under the Annual Action Programme 2014 will be adopted in July 2014, in the form of two new programmes worth €101 million , namely support to the reform of the justice sector in Georgia, as well as supporting the implementation of the DCFTA and to SMEs.
MACRO-FINANCIAL ASSISTANCE TO GEORGIA
In August 2013, the EU adopted a decision on a Macro-financial Assistance (MFA) programme amounting to €46 million, to be provided equally in loans and grants. So far, these funds have not been released since Georgia did not draw money from the IMF programme. Georgian authorities are currently negotiating an agreement with the IMF on a new disbursing programme, which puts the EU in a position to swiftly re-activate the MFA . MFA is an exceptional EU instrument available to the EU's neighbouring partner countries experiencing balance-of-payments problems. It is complementary to assistance provided by the IMF. MFA loans are financed through EU borrowings on capital markets. The funds are then on-lent with similar financial terms to the beneficiary countries.
EU-GEORGIA VISA LIBERALISATION DIALOGUE
The EU-Georgia Visa Liberalisation Dialogue launched on 4 June 2012 (IP/12/561) is progressing very well. Georgia is implementing the Visa Liberalisation Action Plan (VLAP) which was presented to the country's authorities on 25 February 2013. On 15 November 2013 the Commission published its first report on the implementation of the VLAP by Georgia assessing the progress as very good (IP/13/1085). The Commission will continue to assist Georgia in implementing the VLAP. The next Commission's report is expected in early autumn.
NEGOTIATIONS FOR GEORGIA'S ACCESSION TO THE ENERGY COMMUNITY
On 20 February 2014 the European Commission and Georgia officially launched negotiations for Georgia's accession to the Energy Community (IP/14/170). The negotiations are currently on-going.
By becoming Member of the Energy Community and implementing EU energy legislation Georgia would have closer ties with EU's single energy market. This would help attract investments and increase the financial sustainability of the Georgian energy sector. The Energy Community extends the EU internal energy policy to South East Europe and the Black Sea region and thus creates a stable regulatory and market framework.
For more information:
EU-Georgia relations: http://eeas.europa.eu/georgia/index_en.htm
Website of DG Development and Cooperation – EuropeAid (Eastern Partnership webpage)
Delegation of the European Union to Georgia
ENP Country Progress Report – Georgia
Press release: Closer to the EU: additional funding for Georgia and Moldova