Delegation of the European Union to Georgia

Letter from EU Ambassador Carl Hartzell to Prime Minister Giorgi Gakharia

21/04/2020 - 22:00

Dear Prime Minister,

While the European Union is itself feeling the strain of the ongoing coronavirus pandemic, it is taking far-reaching measures to overcome these challenges both at home and beyond, through a coordinated response together with its key partners. It is at times like these that the need for solidarity is most important.  We are acting in this spirit under a ‘Team Europe' approach, which combines the resources from the EU, its Member States and their financial institutions, as well as the European Investment Bank and the European Bank for Reconstruction and Development.

Team Europe support to Georgia backs the healthcare front and addresses short-term financing needs, as well as the longer-term structural impact on the society and the economy. This is part of a multilateral response, as also seen in the open letter issued together with international financing institutions on the eve of the agreement between Georgia and the IMF to address the financing gap in the state budget caused by the pandemic.

To date, two Team Europe packages for Georgia have been announced and are already being implemented. The first one, presented on 30 March, provided for urgent healthcare supplies and technical expertise, assistance to vulnerable groups, and wide liquidity support to small and medium-sized enterprises (SMEs), including in local currency. The second package was unveiled on 8 April and included over €183 million for Georgia in support to socio-economic measures, including a contribution to bridging the financing gap. These packages have brought the total COVID-related support to Georgia to €250 million in non-reimbursable grants to date. It was made possible thanks to an acceleration of available resources and redirection of existing programmes to address the immediate needs stemming from the pandemic and its fallout.

Today I am proud to convey that the European Commission has proposed a third package, in the form of €150 million of loans on highly favourable terms to further help Georgia cover its immediate financing needs. Together with IMF support, our funds aim to enhance macroeconomic stability and create space to allow resources to be channelled towards protecting the Georgian citizens and mitigating the pandemic's negative socio-economic consequences.

Subject to the adoption of this proposal by the Council of the European Union and the European Parliament, the Commission will be able to disburse the first instalment in a swift manner, once an agreement setting out the policy conditionality has been reached with Georgia. The second instalment could be disbursed in the fourth quarter of 2020 or in the first half of 2021, provided that the policy measures attached to it have been implemented in a timely manner. As is normally the case with macro-financial assistance (MFA), disbursements will, inter alia, be conditional on satisfactory progress on the IMF programme and the continued drawing on IMF funds by Georgia.

This unprecedented support to Georgia in its efforts to tackle the coronavirus pandemic and its social and economic consequences is both robust and targeted. It represents an important demonstration of the European Union’s and the whole Team Europe’s solidarity with a key partner and friend at a time of unprecedented crisis.

I am looking forward to continue advancing our cooperation together in the days, weeks and months to come.




Carl Hartzell
Ambassador of the European Union to Georgia

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