Georgia is a partner country within the European Neighbourhood Policy (ENP). This country page contains, or links to, DG ECFIN’s recent analytical work on the economy of Georgia.
The EU held its last Subcommittee on Economic, Financial and Statistical Issues with Georgian authorities in Tbilisi in June 2013. The European Commission presented the EU economic outlook based on the spring 2013 economic forecast and an overview of the policy measures that the EU has taken to deal with the euro area’s sovereign debt crisis. The Georgian authorities presented their views on Georgia’s economic prospects for 2013-2014. The economic priorities of the Georgian government, as well as the status of the EU’s Macro-Financial Assistance programme and the IMF’s programme for Georgia, were also discussed.
The next Sub-Committee is foreseen to take place in Tbilisi in autumn 2015.
Following an official request by Georgia in May 2010, the European Commission proposed on 13 January 2011 to provide Georgia with EUR 46 million in Macro-Financial Assistance (MFA), a form of financial aid for partner countries experiencing a balance of payments crisis. The assistance is equally divided between grants and loans. This proposal was accompanied by a detailed evaluation of Georgia’s needs.
Formal approval of the European Commission’s proposal was delayed for more than two years by a procedural disagreement between the Council and European Parliament. A compromise agreement was reached in May 2013, and the decision to provide assistance was adopted on 12 August 2013. Yet, MFA funds could not be released because Georgia did not draw from a previous IMF programme, which is a pre-condition for the MFA assistance.
When Georgia agreed on a new disbursing Stand-By Arrangement with the IMF on 30 July 2014, the Commission re-started the negotiations on the MFA. The MFA-related documents, including the Memorandum of Understanding, which lays down policy conditions for the disbursement of the MFA funds, were signed, and where appropriate, ratified by the Georgian Parliament in December 2014. The grant part of the first MFA tranche (EUR 13 million) was disbursed to Georgia in January 2015, while the loan part of the first tranche (EUR 10 million) was disbursed on 21 April 2015. The disbursement of the second MFA tranche (a total of EUR 23 million) is foreseen for the second half of 2015, subject to satisfactory progress with policy measures agreed in the Memorandum of Understanding and the IMF programme remaining on track. The measures cover: public finance management, strengthening the social safety net, reinforcing banking regulation and trade and competition policy measures to support the implementation of the Deep and Comprehensive Free Trade Area with the EU.
The links below provide additional information on EU-Georgia relations: