Georgian FM on EU loan: adding new debt amid economic growth would be unjustified
Georgian Foreign Minister David Zalkaliani has stated that making links between the Georgian government’s refusal to take the EU loan and the country’s Euro-Atlantic aspirations is wrong. Photo: Foreign Ministry press office.
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Georgian Foreign Minister David Zalkaliani has stated that taking the 75 million euro EU loan by the Georgian government would be unjustified when the state economy has increased by 12 per cent over the past six-seven months.
He said that the government’s explanations over the issue ‘were absolutely clear’ and that the decision has nothing to do with the ‘deviation from the country’s western course’ as several opposition leaders and NGOs said this.
The Georgian Dream government has taken genuine steps to make the country’s Euro-Atlantic course irreversible,” Zalkaliani said.
The Georgian government refused yesterday to take the second tranche of the EU’s 150 million euro loan.
PM Irakli Garibashvili stated that the reasons behind the refusal were the positive moves in the state economy and the government’s intention to gradually pay the country’s more than 20 billion USD foreign debt.
The EU delegation to Georgia has responded to the refusal, stating that they ‘respect’ the decision, but noting that the country has been unable to completely fulfil preconditions that would have been needed to receive the second instalment.
At a briefing late yesterday, the EU embassy said that the Georgian government has not yet taken genuine steps to improve issues in the country’s judiciary, increase its accountability and quality.
Georgian Prime Minister Irakli Garibashvili has responded to recent statements of local and foreign politicians on the connection between EU financial aid and judicial reforms in the country. Garibashvili said that the Georgian Dream government has already carried out ‘fundamental reforms’ in the judiciary and remains committed to the tenets of the April 2021 EU-mediated agreement to proceed with court reforms.
The EU delegation to Georgia has responded to the Georgian government’s recent refusal to take the second tranche of the EU’s 150 million euro loan, stating that they ‘respect’ the decision, but noting that the country has been unable to completely fulfil preconditions that would have been needed to receive the second instalment.
The United National Movement (UNM) and the European Georgia opposition party leaders say that the Georgian government has refused to take the second part of the EU’s €75 million euro loan because the EU was likely to impose sanctions against Georgia for the ruling Georgian Dream (GD) party’s withdrawal from the April 2021 EU-mediated agreement.
Georgian Prime Minister Irakli Garibashvili has announced that the government has decided not to take the second tranche of an EU loan as 'we are trying to reduce foreign debt'. In 2020 the EU disbursed a €60 million grant as part of its €75 million Covid-19 Resilience Contract for Georgia to assist in the implementation of the government’s Anti-Crisis Economic Plan.
Nominal gross domestic product (GDP) amounted to 15.91 billion GEL in the second quarter of 2021, while the real GDP grew by 29.9 percent year-on-year and GDP deflator increased by 10.3% in the reporting period, show the latest data from the National Statistics Office of Georgia (Geostat). The IMF projects the Georgian economy to grow 7.7% in 2021, 'a significant upgrade from just a few months ago, which implies that output will exceed its 2019 level this year'.
Global ratings agency Moody's expects the Georgian economy to grow by 7.3% in 2021, following a 6.2% contraction in 2020, 'driven by the collapse of the tourism sector and the domestic impact of lockdowns and movement restrictions in the wake of the pandemic', says Moody's.
The Georgian economy is expected to grow by 8.5% in 2021 driven by an expansion in agriculture, industry, and services and the gradual lifting of restrictions imposed due to the coronavirus disease (Covid-19) pandemic, the Asian Development Bank (ADB) said in its annual flagship economic publication the Asian Development Outlook 2021 Update.