European Commission proposes €46 million ($61 million) assistance to Georgia

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European Commission proposes €46 million ($61 million) assistance to Georgia

2011-01-14 08:15:36 GMT+7 (ICT)

BRUSSELS (BNO NEWS) -- The European Commission on Thursday proposed €46 million ($61 million) as macro-financial assistance (MFA) to Georgia to support its economic recovery.

The proposed aid is part of a comprehensive package from the European Union totaling €500 million ($666.85 million) to support Georgia's recovery stemming from the 2008 armed conflict with Russia and the global crisis.

The aid follows a successful implementation during the last two years of a similar financial comprehensive package. The €46 million ($61 million) help will support the adjustment program from the Georgian government.

The program was designed along the International Monetary Fund (IMF) under a Stand-By Arrangement, in order to cover the country's external financial needs for this year.

The Commission proposed that the MFA would be distributed in two halves, one in the form of a grant and the other in the form of a loan. Each contribution would be worth around €23 million ($30.67 million).

In addition, the financial aid would be provided in two installments which are scheduled for the second and fourth quarters of 2011. The MFA is conditional on the respect of the adjustment program agreed between Georgia and the IMF.

The EU pledged to support Georgia with a package up to €500 million ($666.85 million) at the October 2008 International Donor Conference. The forum was held following the ending of the armed conflict with Russia.

In 2010, Georgia witnessed signs of economic recovery after two years of low or negative growth. The real GDP grew by 6.3 percent despite the trade embargo imposed by Russia.

Last year, the EU continued supporting Georgia as it decided to ease the issuing of EU entry visas for its citizens. However, support has been limited as the conflict with the former Georgian states of Abkhazia and South Ossetia remains unsolved.

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