The European Commission proposed new Macro-Financial Assistance (MFA) to Georgia, worth up to €45 million. According to an EU press release, if adopted by the European Parliament and the Council, this assistance would help Georgia cover part of its external financing needs.
“Today’s proposal for additional assistance is another sign of the EU’s strong support for the Georgian people,” said Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs. “As Georgia continues its economic transition, we are helping the country to preserve macroeconomic stability and continue the reform process, which is needed to achieve stronger and more inclusive growth.”
Of the total €45 million, €10 million would be provided in the form of grants and up to €35 million in medium-term loans at favourable financing conditions, helping to reduce uncertainty surrounding the economy’s short-term balance of payments and fiscal issues, the EU press release added.
Disbursements under the proposed MFA programme would be strictly conditional and dependent on the implementation of specific policy, to be agreed between Georgia and the EU and set out in a Memorandum of Understanding, and on good progress with the IMF programme.
The MFA is an exceptional EU crisis response instrument available to the EU’s neighbouring partner countries. It is complementary to assistance provided by the International Monetary Fund. MFA loans are financed through EU borrowing on capital markets. The funds are then lent on, with similar financial terms, to the beneficiary countries. MFA grants come from the EU budget.