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Commissioner for External Relations and European Neighbourhood
Georgia Donors Conference
Mssrs les Ministres,
Ladies and Gentlemen,
Let me first echo the President’s welcome to all the delegations present today. Your presence is indeed a sign of international solidarity with the people of Georgia.
The stability and security of the EU’s neighbouring countries, including Georgia, is a key focus of the European Neighbourhood Policy. What we can do today to help Georgia is largely thanks to the policies and instruments we have established in recent years through ENP.
I would like, briefly if I may, to sketch out the Commission's analysis of Georgia's post-conflict needs, and how we propose to help.
First the Georgian economy. Prior to the August conflict, it was doing well. GDP was growing at 10.5% a year, large volumes of foreign direct investment were flowing into the country and improvements in infrastructure, education, and health were all coming on stream. Despite high growth, job creation was still weak, but poverty had begun to fall.
The conflict has changed that. There has been a fall in investor, lender and consumer confidence with knock-on effects on growth and employment. And public finances have become predictably stretched due to post-conflict recovery needs.
Prime Minister your government’s swift response to the crisis has been laudable. But if good work done is to be translated into sustainable recovery, rapid financial support is needed from the international community - €2.38 bn over a three year period, according to the World Bank needs assessment.
Ladies and Gentlemen, as President Barroso has announced, the Commission intends to play its full part in this effort with a package of up to 500m euros over three years - a considerable increase on our current funding levels to Georgia.
Our assistance will focus on 3 priorities:
We also want to help the populations of South Ossetia and Abkhazia.
We will engage where and there is real need based on expert assessments, and the final amount of the package will be contingent on the recovery and evolution of the Georgian economy, which we will review over the next 12 months.
We will deploy our full range of crisis management tools. And we will continue many of our existing Neighbourhood Policy programmes, which are if anything more important in the new circumstances. Support to reforms in public financial management or justice are important in themselves, but both now critical to restoring investor confidence. Progress on Visa Facilitation and Free Trade, can also help send the political signals that will help get the Georgian economy back on track.
It is essential that the crisis should not distract Georgia from its political and economic reform efforts. The European Commission will continue to accompany Georgia on its path towards closer European integration, and will continue to urge Georgia to strive for higher standards. This is in the expectation that the Government of Georgia will use the financial support pledged today to further advance essential reforms. In particular I have in mind the steps set out in the European Neighbourhood Policy Action Plan on judicial reform, public finance management reform, as well as the improvement of media freedom and the conduct of elections.
Ladies and Gentlemen, I believe that today’s conference shows that the international community walks its talk on global governance. In delivering an ambitious, dynamic and innovative Eastern Partnership this autumn, of benefit to both Georgia and its neighbours, we will take another step. In the words of Shakespeare: “Action is eloquence”. Ladies and Gentlemen, let us be eloquent.