I) Partnership and Cooperation Agreement

EU-Georgia bilateral relations are regulated by the Partnership and Cooperation Agreement (PCA) which entered into force on 1 July 1999. The agreement is based on common values such as the respect of democratic principles, of the rule of law and human rights, as well as on adopting a market oriented economy. The PCA provides the legal framework for wide-ranging cooperation in the areas of political dialogue, trade, investment, economic, legislative, and cultural cooperation. The joint institutional mechanisms set up under the PCA (Cooperation Council, Cooperation Committee, and Subcommittee on Trade, Economic and Related Legal Affairs, as well as the Parliamentary Cooperation committee) meet on a regular basis in order to monitor the implementation of the PCA.

II) European Neighbourhood Policy (ENP)

The inclusion of Georgia in the European Neighbourhood Policy to Georgia marked a significant step forward in the EU-Georgian relations. As a first step in this direction, a Country Report [152 KB] assessing the progress in Georgia towards political and economic reform was published on March 2, 2005. The Country Report highlighted areas in which bilateral cooperation could be feasibly and valuably strengthened.

In the context of the ENP, the EU developed in consultation with Georgia an ENP Action Plan [103 KB] which aims at fulfilling the provisions of the PCA and contributing to a closer relationship, involving a significant degree of economic integration and deepening the political co-operation. The implementation of the Action Plan further intends to significantly advance the approximation of Georgian legislation, norms and standards to those of the European Union. The five-year Action Plan was adopted in Brussels at the EU-Georgia Cooperation Council on November 14, 2006. It focuses especially on:

1. strengthening democracy, rule of law, human rights;
2. socio-economic reform, improvement of business climate, poverty alleviation;
3. conflicts resolution;
4. justice and security issues, including border management;
5. regulatory approximation in various sectors, including energy and transport;
6. regional cooperation.

III) Developments in Georgia

The Nov. 2003 "rose revolution" and the ensuing election of Pres. Saakashvili in 2004 brought to power a new Georgian administration which has promoted an ambitious programme of political and economic reforms. Substantial results have been achieved in several areas, such as in fighting against corruption, improving the business and investment climate, increasing tax revenues, modernising the armed forces and reforming government and public finance management. Georgia has successfully strengthened its links with other partners such as the US and NATO. The economy has experienced since 2004 sustained growth of the order of 7-9% of yearly average growth, in spite of trade and transport restrictions applied by Russia in 2006 and of growing energy prices.

In terms of the implementation of the Action Plan, however, Georgia still faces formidable challenges. The reform of the judiciary system remains one of the most problematic areas. Democratic institutions and governance still need to be further consolidated and strengthened. Poverty levels have recently improved but remains still high. The ENP Action Plan for Georgia addresses most of these challenges and includes objectives which present a high degree of complementarity with the government's own reform agenda. Its implementation is expected therefore to boost and assist the achievement of the reform process. The efforts to find a peaceful settlement to internal conflicts received a serious setback as a result of the conflict with Russia in August 2008.

IV) EU Assistance

The Country Strategy Paper [444 KB] (CSP) 2007-2013 covers EC financial assistance to Georgia under the new European Neighbourhood and Partnership Instrument (ENPI ). It is accompanied by an ENPI National Indicative Programme [78 KB] (NIP) for 2007-2010 whose main priorities are: (1) Support for democratic development, the rule of law and governance, (2) Support for economic development and ENP AP implementation, (3) Support for poverty reduction and social reforms, (4) Support for peaceful settlement of Georgia's internal conflicts. Georgia also participates in different regional and thematic programmes under the ENPI, such as the European Instrument for Democracy and Human Rights.

Total EC grants to Georgia from various EC financial assistance instruments amounted in the period 1992-2006 to 505 million euro.

In the first years after independence, EU aid to Georgia covered mostly basic humanitarian assistance and food aid. In the end of the 1990’s the aid shifted to more technical support, such as improving food security in the agricultural sector.

In 2002-2003 Technical Assistance to the Commonwealth of Independent States (TACIS) to Georgia, with an indicative budget of 14 million euros, focused on supporting institutional, legal and administrative reforms, as well as the most pressing social consequences of transition, including the support for the primary healthcare restructuring programme.

The Commission adopted in September 2003 a revised CSP and a new Indicative Programme for 2004-2006. The main objectives of the CSP revision were improving the delivery of EU assistance by strengthening aid conditionality, putting more focus on the reform programmes, and strengthening support for the civil society. Under the 2004-2006 CSP, assistance was concentrated in the following priority areas: the rule of law, good governance, human rights and democratic institutions; poverty reduction; conflict prevention, conflict settlement and post-conflict rehabilitation.

Georgia has also benefited from assistance under the Tacis Regional Cooperation Programme (Interstate programme) such as Traceca, Inogate, and the Regional Environmental Centre for Southern Caucasus in Tbilisi.

More information about EC assistance to Georgia is available under the website of the EU Delegation to Georgia which is responsible for the implementation of bilateral EC assistance to Georgia. A summary of EC assistance in the period 1992-2006 is attached as Annex 3 to the Country Strategy Paper [444 KB] 2007-2010 for Georgia.

V) EU response to the conflict in Georgia, August 2008

While not being a party to formal conflicts resolution mechanisms, the EU has actively contributed to efforts to peacefully resolve the conflicts in Abkhazia and South Ossetia. An EU Special Representative for the South Caucasus (currently Swedish diplomat Peter Semneby) was appointed in 2003.

For the period 1997-2006 the EU has provided 33 million euros for supporting various economic rehabilitation and confidence building measures in both conflict zones.

Since August 7^th 2008, the EU has provided €6 million in aid for people affected by the conflict in South Ossetia and other parts of Georgia. The aid is being distributed by non-governmental organisations, specialised UN agencies and the Red Cross/Red Crescent. Individual EU countries have provided a further €8.4 million between them.

The situation in Georgia was discussed at an emergency EU summit on 1 September 2008. EU leaders decided to postpone talks with Russia on a new partnership pact until Moscow withdraws its troops to pre-conflict positions. They also agreed to a review of relations with Russia, condemning Moscow’s recognition of breakaway regions South Ossetia and Abkhazia as independent states.

A team of EU experts has been the region to evaluate humanitarian needs. Civilian observers will follow – to monitor implementation of the EU-brokered 6-point truce. Along with a ceasefire, the agreement calls for international talks and a return to lines held before the war, which saw Russian troops take up positions in Georgia beyond South Ossetia.

EU leaders also agreed to make reconstruction aid available for Georgia and to press for a free trade deal and a relaxed visa regime for its citizens. They agreed to help organise an international donors’ conference for Georgia. External affairs commissioner Benita Ferrero-Waldner said €110 million would be needed to help an estimated 20 000 - 30 000 internally displaced people.

See also the website of the EU Delegation to Georgia.