Georgia to Refuse Conditional EU Loan, Garibashvili Says

Prime Minister Irakli Garibashvili told reporters today Georgia will refuse EUR 75 million loan from the European Union, conditioned on the court reform and upholding EU-brokered April 19 deal, citing the government attempts to reduce foreign debt and avoid political insinuations.

“This issue gained a huge political significance. Thus, to avoid any insinuations, the government does not rule out, and we have decided to refrain from the second [tranche]” of the EU macro-financial assistance, the Georgian Prime Minister asserted.

He said, however, that “we are very thankful to the EU for all of the help, including during the pandemic management, and in general, for everything they have done for us.”

PM Garibashvili accused the opposition of pushing the EU towards using the conditionality mechanism, noting that “our opponents have moved to the regime of sabotage to somehow… hinder our course towards the West.”

“It is tragedy, that [Georgian] citizens, among them former President [Mikheil] Saakashvili is touring EU institutions — and as you know he is member of the EU people’s party, EPP group — and spares no effort to bring sanctions and hindrances towards our direction,” the Prime Minister noted.

The Prime Minister’s words come a day after ruling Georgian Dream party chair Irakli Kobakhidze announced the EU’s macro-financial assistance “lost its economic significance” after the economy saw a far bigger growth than initially expected, that brought additional GEL 1 billion (USD 320 mln) to the budget.

Charles Michel, European Council President, who led political crisis mediation efforts in Georgia, recently said the EU may cut EUR 75 million loan if Georgian authorities fail the court reform and refuse to commit to the April 19 EU-brokered deal. The EU and the U.S. strongly criticized Georgia’s Supreme Court appointments, noting the appointments went against April 19 deal, an assertion the GD government denies.

The European Parliament and the Council adopted EUR 150 million loan package for Georgia in the context of COVID-19 pandemic in May 2020. The first disbursement of EUR 75 million was made in November 2020.

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