€45 million Macro-Financial Assistance package for Georgia

€45 million Macro-Financial Assistance package for Georgia

The FINANCIAL -- The European Commission has signed a Memorandum of Understanding with Georgia for Macro-Financial Assistance (MFA) of up to €45 million to help Georgia cover part of its external financing needs and support economic reforms.

The MFA programme is designed to help the country cover part of its financing needs and support the implementation of structural reforms. It will complement Georgia's programme with the International Monetary Fund (IMF).

Up to €10 million will be provided in the form of grants and the remaining €35 million in medium-term loans, at favourable financing conditions.

The assistance will be distributed in two tranches. It is conditional on the implementation of specific policy conditionality agreed between Georgia and the EU, which are enumerated in the Memorandum of Understanding. Disbursements are also dependent on the fulfilment of the political precondition, which requires Georgia to continue respecting effective democratic mechanisms, including a multi-party parliamentary system and the rule of law, and guaranteeing the respect for human rights. Finally, disbursements will also be contingent on good progress with the IMF programme.

The policy conditions in the Memorandum of Understanding build on the government's reform programme and are consistent with the reform path agreed between the EU and Georgia in the context of the Association Agreement. The policy conditionsaim to strengthen the Georgian economy in the areas of public finance management, the financial sector, social and labour market policies, and the business environment. By supporting the Georgian government's reform agenda in those areas, the EU is helping Georgia lay the ground for sustainable and inclusive economic growth.

The next step in the implementation of the MFA programme is the ratification of the Memorandum of Understanding by the Parliament of Georgia.