The European Union transferred Euro100 million under its macro-financial assistance (MFA) programs to Georgia, helping its balance of payments and alleviating its budgetary financing needs. The MFA aims to restore a stable external financial position and is co-financed by the International Monetary Fund. Since 2008, the EU has conducted four macro-financial assistance operations in Georgia.
EU disburses Euro100 million in macro-financial assistance to Georgia
By Natalia Kochiashvili
Thursday, November 26
The support is composed of Euro75 million from a new MFA program announced in April 2020 aimed at mitigating the socio-economic consequences of the coronavirus pandemic; the other Euro25 million is the last disbursement from a previous macro-financial assistance program approved in April 2018. A total of Euro 95 million in soft loans at favorable rates and the remaining Euro 5 million in on-reimbursable grants.
The second part of the disbursement of Euro25 million comes from the MFA program agreed in April 2018, and is composed of Euro20 million of loans and a grant of Euro5 million. The policy conditions agreed and fulfilled for this second tranche enabled reforms on public finance management, financial sector, social and labor market policies, and business environment.
The EU Ambassador Carl Hartzel reaffirmed the EU's support to Georgia in its fight against the Covid-19 pandemic. According to him, this is part of the larger 1.5 billion GEL aid package for Georgia to deal with the Covid-19 pandemic.
“We also believe that the agreed reforms related to this special assistance will contribute to the long-term perspective of Georgia's further approximation to European standards and will be of particular benefit to Georgian citizens in areas such as justice, occupational safety, and pensions,” Hartzell noted.
The disbursement of Euro75 million from the COVID-19 MFA program follows the EU’s agreement with the Government of Georgia to conduct reforms in the areas of public finance management, governance (notably to increase the independence, accountability, and quality of the judicial system), energy sector and labor market policies. If these agreed reforms are achieved by the Government, a further Euro 75 million could be disbursed under the MFA program in early 2021.