EU Disburses €100 mln in Macro-financial Assistance to Georgia to Tackle Pandemic

On Wednesday, the EU disbursed €100 million under its macro-financial assistance (MFA) programs to Georgia, helping its balance of payments and alleviating its budgetary financing needs. The MFA is meant to help restore a sustainable external financial situation, as a complement to the International Monetary Fund (IMF) financing. Since 2008, the EU has launched four MFA operations in Georgia.

This support is composed of €75 million from a new MFA program announced in April 2020, and is aimed at limiting the economic fallout of the coronavirus pandemic.  The other €25 million comes as a last disbursement of a previous MFA approved in April 2018. Of the total, €95 million is provided in the form of loans at favorable rates, while the remaining €5 million is provided as a non-reimbursable grant.

The disbursement of €75 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 €75 million could be disbursed under this MFA program in early 2021.   

The second part of the disbursement of €25 million comes from the MFA program agreed in April 2018, and is composed of €20 million of loans and a grant of €5 million. The policy conditions agreed and fulfilled for this second tranche enabled reforms on public finance management, the financial sector, social and labor market policies and business environment.

“The EU continues to stand by Georgia in weathering the COVID-19 pandemic. We are proud to provide these funds, which will provide macro-economic stability to the country so that the Government can focus on best supporting its citizens and companies. This is part of the EU’s wider GEL 1.5 billion EU COVID-19 support package for Georgia. We also believe the agreed upon reforms linked to this exceptional assistance will contribute to further bringing Georgia closer to European standards in the long term and concrete benefits for Georgians in aspects like the judiciary, labor safety and pensions,” noted EU Ambassador Carl Hartzell.  

This disbursement was part of a wider €400 million EU package of disbursements to Georgia, Jordan and Moldova.

Source: Delegation of the European Union to Georgia

25 November 2020 17:35