European Union External Action

EU-Georgia relations, factsheet

Bruxelles, 10/11/2017 - 11:00, UNIQUE ID: 170328_33
Factsheets

The European Union and Georgia enjoy a very close and positive relationship.

The EU-Georgia Association Agreement entered into force in July 2016 and strives for political association and economic integration between the EU and Georgia. The EU and Georgia have also entered into a Deep and Comprehensive Free Trade Area (DCFTA), while Georgian citizens have benefitted from visa free travel to the Schengen area since 28 March 2017. The EU is Georgia's largest trading partner and provides over €100 million to Georgia annually in technical and financial assistance.

Georgia is an important partner for the European Union both within the European Neighbourhood Policy (ENP) and its eastern dimension under the Eastern Partnership (EaP). The 2015 ENP review reconfirmed the EU's long-term engagement with partner countries, in particular with partners, such as Georgia, wishing to pursue deeper relations with the EU. Differentiation and joint ownership being the hallmarks of the new ENP, the policy continues to build ties with and encourage Georgia to further approximate with European legislation and standards. The 2016 EU Global Strategy acknowledged Georgia as an example of state and societal resilience in the eastern neighbourhood.

The EU Monitoring Mission in Georgia, which was deployed in line with the Agreement of 12 August 2008, along with the EU Special Representative for the South Caucasus and the crisis in Georgia, embody the EU's engagement on conflict resolution and its full commitment to Georgia's territorial integrity within its internationally recognised borders.

By signing the Association Agreement (AA) in June 2014, relations between the EU and Georgia were brought to a new level. The AA, with its Deep and Comprehensive Free Trade Area, foresees far reaching political cooperation and economic integration with the EU by significantly deepening mutual ties and bringing Georgia closer to the EU. The provisional application of the DCFTA part of the Agreement began on 1 September 2014, and the Agreement (as a whole) entered into force on 1 July 2016.

In 2016, the EU was Georgia's (GE) key trading partner, with a 31% share in its total trade (27% before the entry into force of the DCFTA), followed by Canada (15%), Turkey (around 13%), Russia (about 7%), China (6%) and Azerbaijan (over 5%). Trade with Georgia accounts for 0.1% of the EU's total trade. The main EU importers from Georgia are Bulgaria, Italy and Germany.

In 2016, total bilateral EU-Georgia trade slightly decreased by 2.3% year-on-year. EU imports from Georgia decreased by 25%, and amounted to €551 million, whereas the value of EU exports to Georgia increased by 6.7% to €1.96 billion. The decrease in EU imports from Georgia is nominal and mainly driven by changes in the prices of certain Georgian exports. Those four products account for almost 60% of total Georgian export to the EU. In the first six months of 2017, imports from Georgia increased by 56% compared to the same period in 2016 by 56%.

As a direct result of the DCFTA, new Georgian exports to the EU are materialising. Georgian kiwis, blueberries, nuts, garlic and wine are exported to the EU and copper and petroleum oils have seen sizable increases of exports. Exports of honey have been authorised since December 2016 and Georgia has also been able to export Black Sea fish to the EU since June 2017. The EU also supports the development of new business in Georgia, most recently through the introduction of credit lines.

The EU-Georgia Association Agenda helps Georgia fully enjoy the benefits of the Association Agreement. Georgia has adopted over 7,000 European standards in areas like health, safety and environmental protection with EU support. This means safer products for Georgian citizens and increased export opportunities for Georgian businesses.

The DCFTA does not apply in the Georgian breakaway regions of South Ossetia and Abkhazia. The territorial clause in the Agreement permits, however, that the DCFTA starts applying in these two regions once the conditions for its implementation are put in place.

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Visa liberalisation for Georgian citizens entered into force on 28 March 2017. This means that Georgian citizens holding a biometric passport can now travel visa-free to the Schengen area for short-stays of up to 90 days. Visa liberalisation for Georgian citizens entered into force on the same day as the revised visa suspension mechanism, allowing the EU to react rapidly to increased irregular migration or security risk by suspending visa-free travel for any of the visa free countries, if necessary.

Since the start of the EU-Georgia visa liberalisation dialogue in 2012, Georgia had taken all the necessary reforms to meet the benchmarks set under the Visa Liberalisation Action Plan. Previously, the EU-Georgia Visa Facilitation and Readmission Agreements had entered into force in March 2011 and remain in force (Visa Facilitation is applicable to non-holders of biometric passports).

The Mobility Partnership launched in 2010 remains the political framework for cooperation on migration and mobility issues between the EU and Georgia. About 15 projects are currently being carried out in this field.

 

The EU supports Georgia’s reform agenda through financial and technical cooperation. More than 100 projects are currently being carried out in Georgia. The EU and Georgia agreed on the priorities for EU cooperation for the period of 2017-2020 with an indicative financial allocation in the range of €371 – €453 million.

Furthermore, additional “more for more” funds could be – and have been – made available under the incentive-based approach. 2014-2016 cooperation was focused on reforming public administration and justice sectors, as well as on agriculture and rural development, thus contributing to economic resilience and diversification, with complementary support for capacity development in support of EU-Georgia agreements as well as for civil society. Cooperation as of 2017 will focus on economic development and market development, strengthening institutions and good governance, connectivity, energy efficiency, environment and climate change and mobility and people-to-people contacts.

 

  • EU support to agriculture is about raising the income of Georgian farmers. To this end, over 1,500 farmer cooperatives have been created with EU support. Initial findings are showing that farmers in cooperatives can potentially lower their production costs by 30% and increase their incomes by 20%. See a short video
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  • In addition, 59 Information and Communication Centres have been established in the regions, allowing farmers easy access to training and education materials to improve their farming skills and enjoy more plentiful harvests.

 

  • Substantial improvements to the living conditions of prison inmates have been achieved thanks to EU funding, with better healthcare and premises; torture and ill-treatment are no longer a systemic problem. Prison mortality rates have decreased by over 72%, from 60 inmates deaths per 10 000 in 2011 to 17 per 10,000 in 2016; tuberculosis transmission rates among inmates have fallen by over 90% from 457 in 2012 to 45 in 2016.

 

  • The EU is working hard to ensure that Georgians have proper access to justice. It helped to establish the Government's Legal Aid Service, which has provided over 140,000 Georgians (many who cannot afford a lawyer) with free legal counselling and aid. In addition, various EU-funded training programmes for judges, prosecutors, prison and probation staff, police investigators public defenders and lawyers means they are more professional and efficient, further ensuring that Georgians' rights are effectively protected.

 

  • EU support has helped to fundamentally reform juvenile justice in Georgia in particular by launching since 2010 Diversion Programmes redirecting all juvenile offenders to reintegration activities rather than criminal prosecution. In January 2016 the Juvenile Justice Code entered into force, which prioritises the interest of the child in legal proceedings. So far over 1,655 juveniles have benefitted from these measures.

 

  • With EU support, the Government has established 44 Community Centres in smaller towns and villages across the county. These centres make life easier for the 90,000 Georgians living there by bringing 200 public and banking services, as well as free internet and libraries, directly to them.

 

  • The EU is supporting the Government in making its finances more transparent and accountable to its citizens. Since 2014, the Government publishes a citizen’s guide to the state budget, clearly explaining how and where money is spent. EU support has also helped the Government to establish a dedicated mechanism to follow up on all State Audit Office findings. Government procurement has been improved with clear criteria for awarding a contract through simplified procurement procedures.

 

  • The EU is helping local communities to have more of a say in Government investments in their regions.  EU support in establishing the Government’s Regional Development Programme in 2015 permits municipalities to set the priorities for Government investment in their region under the Regional Development Fund.  This means that local government can decide, for example, whether they want to build a new school or refurbish local roads, giving more power to local communities.

 

  • The EU is also supporting Georgia to reap the full benefits of DCFTA. Support is being provided to increase competitiveness of small- and medium-sized businesses and to create the conditions for Georgian produce to meet European standards. After two years of implementation, 100 companies have already received technical advice thanks to EU support, info centres on EU trade are being set up in the regions and EU-backed credit lines will provide finance to Georgian SMEs. Our support has also been instrumental in the adoption of over 7,000 European standards in the areas of health, safety and environmental protection. Both the quantity and range of Georgian exports to the EU are also increasing.

 

  • The EU is supporting the modernisation of the higher education system in Georgia in line with the Bologna reforms, enhancing the quality and relevance of education, improving skills development, notably through increased mobility flows between the European Union and Georgia for students, teachers, researchers, academic staff and young people. More than 1700 students and staff members from Georgia can benefit from mobility to Europe for study or teaching purposes and more than 5300 young people and youth workers can take part in joint activities with their counterparts from the EU.

 

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  • Since Georgia became associated to Horizon 2020, the EU's framework programme for research and innovation, in April 2016, researchers and innovators from Georgia are able to participate in the programme under the same conditions as their counterparts from EU Member States and other associated countries. The Horizon 2020 Policy Support Facility is being used to support reform of the Georgian research and innovation system. Support to Georgia on innovation is part of EU4Innovation.

 

The European Commission, jointly with the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD) has put in place the DCFTA Facility for small and medium-sized enterprises to respond to their needs. The main objectives of the 'EU4Business' initiative are to help enterprises seize new trade opportunities with the EU as well as improve their access to finance. This facility, by providing €200 million of grants, is expected to leverage €2 billion in loans.

Additionally, the Neighbourhood Investment Facility (NIF) is a financial mechanism whereby the EU grants support investments from European Financial Institutions. The instrument is used in Georgia for infrastructure financing in different fields, such as water and sanitation, roads, energy, and the environment, as well as for funding small enterprises and agriculture holdings. The NIF has now become the Neighbourhood Investment Platform as part of the External Investment Plan.

Georgia is also benefiting from €46 million of EU macro-financial assistance (MFA), half of which is in grants. The first tranche of €23 million was disbursed in 2015 and the second in May 2017.  On 29 September 2017, the European Commission proposed new Macro-Financial Assistance (MFA) to Georgia, worth up to €45 million. If adopted by the European Parliament and the Council, this assistance would help Georgia cover part of its external financing needs.

Georgia participates actively in the regional programmes, which are addressed to all Eastern Partnership countries. This includes EU4Energy, which replaces INOGATE and supports the country in the implementation of its accession to the Energy Community, as well as substantial regional programmes on transport safety and transport connectivity, on environment, climate change and green economy, on energy security, renewable energy and energy efficiency, as well as Cross-Border Cooperation, where Georgia is part of the sea-crossing Black Sea Programme. Under thematic cooperation, more than 50 projects amounting to more than €14 million have been funded in Georgia over the past four years, mainly benefitting local civil society.

 

The EU continues to support Georgia’s efforts to overcome the consequences of internal conflicts in Georgia’s breakaway regions of Abkhazia and South Ossetia dating back to the early 1990s, as well as to stabilise the situation following the outbreak of hostilities in August 2008. The EU remains firmly committed to its policy of supporting Georgia’s territorial integrity within its internationally-recognised borders, as well as engagement with the breakaway regions of Abkhazia and South Ossetia in support of longer-term conflict resolution. The EU appointed in July 2003 an EU Special Representative for the South Caucasus (EUSR) (since 2011, "EU Special Representative for the South Caucasus and the crisis in Georgia"). This underpins the EU's commitment to actively contribute to the peaceful resolution of conflicts and to confidence-building efforts in the South Caucasus, while reaffirming Georgia's territorial integrity and sovereignty. The EUSR co-chairs together with the UN and OSCE the Geneva International Discussions, launched following the outbreak of hostilities in August 2008.

The EU also deployed a civilian mission in the immediate wake of the August 2008 hostilities, the EU Monitoring Mission (EUMM) in Georgia, with a mandate to monitor parties' compliance with the Agreement of 12 August 2008. The most visible component of the EUMM's stabilisation work is patrolling the areas adjacent to the Administrative Boundary Lines with the breakaway regions. The EUMM contributes to de-escalation through a hotline and to confidence building in regular Incident Prevention and Response Mechanisms and through its confidence-building project facility. The EUMM informs EU policymakers and the Geneva International Discussions.

Programmes involving the breakaway regions aim to foster engagement with these entities and follow a human rights-based approach, which puts people's needs at the centre of development. The Instrument contributing to Peace and Stability programmes (IcSP VI amounting to €7.5 million) foster people-to-people contacts, direct channels between stakeholders and societies on both sides of the boundary lines and supports opportunities resulting from such dialogues.

European Neighbourhood Initiative programmes build on and complement such political initiatives, aiming at socio-economic development on a participatory and community-based level. This is the logic of the European Neighbourhood Programme for Agriculture and Regional Development (ENPARD) II component for the breakaway region of Abkhazia (€4 million, to be followed up with an ENPARD III component of the same size) and the Joint EU-UNDP Civil Society Support Programme. Another programme on Vocational Education and Training (VET) is in the programming phase. While of a less political nature, these actions intrinsically also support the exchange of ideas, people and expertise.

 

A Framework Agreement on Georgia's participation in the EU's Common Security and Defence Policy operations entered into force in March 2014 and since then Georgia has already made remarkable contributions to several operations. Their biggest contribution so far, a company of around 156 staff, was to the EUFOR RCA operation in the Central African Republic. Currently Georgia is involved in the EU Military Training Mission in the Central African Republic, and the EU Training Mission in Mali. Since 2014 the EU and Georgia hold staff-to-staff talks on Common Security and Defence Policy.

 

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