EU acknowledges Georgia’s reforms, offers additional 140m GEL

The European Union (EU) is offering 140 million GEL (about $54.37m/€48.1m) to Georgia in support of reforms, announces the Delegation of the EU to Georgia.

The EU has transferred this non-reimbursable aid to Georgia in acknowledgement of commonly agreed reform progress in 2017 in several sectors:

• Trade and business development
• Vocational education and employment
• Agriculture
• Integration of internally displaced people (IDPs)

Payments were also made for Georgia's justice sector, public administration, public finance management and regional development policy.

Based on independent reports, the EU assessed progress in regards to Government commitments in each of the mentioned sectors and came to the following conclusions:

1. Support to EU-Georgia Deep and Comprehensive Free Trade Area (DCFTA) and Small and Medium sized Enterprises (SMEs)
2. Employment and Vocational Education and Training (EVET)
3. Agriculture and Rural Development (ENPARD II)
4. Support to conflict-affected/displaced population and its host communities in Georgia
5. Support to reforms in the Justice sector: The EU welcomes the following achievements:
6. Public Administration Reform
7. Support to Public Finance Policy Reforms (PFPR) in Georgia
8. Support to Regional development policy implementation in Georgia

Budget support is an instrument for EU cooperation which involves direct financial transfers to the state budget of the partner country. Funds are transferred annually, and only when commonly agreed results are met. Government is required to maintain a satisfactory track record of implementing macroeconomic policies, public financial management, and budget transparency for all payments, and in addition specific targets are included in various policy areas, such as SME development, education, public financial management, etc.

If the EU considers performance on any of these points is insufficient, it withholds a part or the whole disbursement until credible reassurances or measures have been established.

This is a way of fostering partner countries' ownership of development policies and reforms, and addressing the source, not the symptoms, of underdevelopment.

Most budget support for Georgia is part of a wider support package to a specific sector and is combined with funding for accompanying projects, for example grants and technical help for cooperatives under the ENPARD Programme.