Georgian government admits that the EU refused to issue a loan, which Georgia claimed to have refused to accept

Georgia did not receive an EU loan due to non-fulfilment of conditions

There was a risk that the European Union’s macro-financial assistance to Georgia in the amount of 75 million euros would not be transferred at all, since this amount was tied to the implementation of reforms, one of which was the judicial reform.

This was stated by Deputy Finance Minister of Georgia Giorgi Kakauridze at the parliamentary hearings on September 13, commenting on the government’s decision to refuse European aid.

According to Kakauridze, the EU was critical of the reform of the Georgian judicial system.

In April 2020, the European Commission awarded a € 3 billion macro-financial assistance package to partners to tackle the socio-economic problems caused by the pandemic.

Under EU conditions, if the Georgian government was to carry out the necessary reforms in the judicial system, governance, financial and energy sectors. Georgia was to receive the second part of EU assistance in the form of a macro-financial package of 75 million euros in early 2021.

“EU money was one of the components that followed the reforms, about 10 or 12 different reform areas were listed, and all of them were implemented, only one part remained. I will not be able to assess the judicial system, but local experts believe that what was written in the agreement has been fulfilled, but the other side, the EU delegation, stated that certain conditions were not met”, Kakauridze said.

Kakauridze also confirmed that the EU loan has good conditions compared to many other loans, but it is still a loan, and this amount is subject to repayment.

Kakauridze also stressed that there was such a case before, when Georgia could not receive part of the grant due to the lack of certain reforms, and “this is disastrous for the country, because we are losing money and the reform will not be completed”.

On August 31, Georgian Prime Minister Irakli Garibashvili said the government was unwilling to accept 75 million euros in EU aid. As Garibashvili explained then, the government began to reduce its external debt, and it will no longer need to receive this amount.

The Prime Minister’s statement was followed by an immediate response from the European Union, according to which Georgia could not fully fulfill all the conditions for the provision of this assistance. In addition, the EU talks about the need to increase the independence and accountability of the judiciary.

According to the EU, the appointment of justices of the Supreme Court was carried out without legislative changes, which was necessary to fully comply with the recommendations of the Venice Commission.

US Ambassador to Georgia Kelly Degnan said the government’s announcement of EU assistance was unexpected and Washington would listen to it, while MEP Viola von Cramon said the Georgian government had said goodbye to its reform agenda. “You can’t give up what didn’t belong to you”, said Cramon.