EC cooperation with Georgia ENP AP

Introduction The enlargement of the European Union on 1 May 2004 has brought a historical shift for the Union in political, geographic and economic terms, further reinforcing the political and economic interdependence between the EU and neighbouring countries. It offers the opportunity for the EU and neighbouring countries to develop an increasingly close relationship, going beyond co-operation, to involve a significant measure of economic integration and a deepening of political co-operation.

Introduction The approach is founded on partnership, joint ownership and differentiation. The ENP sets ambitious objectives based on commitments to shared values and effective implementation of political, economic and institutional reforms.

Action Plan Political document laying out the strategic objectives of the cooperation between each neighbourhood countries and the EU Covers a time frame of five years

Implementation of Action Plan Will help fulfil the provisions in the Partnership and Cooperation Agreement (PCA) Build ties in new areas Will encourage and support neighbourhood countries’ objective of further integration into European economic and social structures.

Implementation of Action Plan Will significantly advance the approximation of neighbourhood countries’ legislation, norms and standards to those of the European Union Will build solid foundations for further economic integration based on the adoption and implementation of economic and trade-related rules and regulations with the potential to enhance trade, investment and growth

New partnership perspectives opened by ENP The perspective of moving beyond cooperation to a significant degree of integration, including through a stake in the EU’s Internal Market, and the possibility for neighbourhood countries to participate progressively in key aspects of EU policies and programmes;

New partnership perspectives opened by ENP Deepening trade and economic relations; Providing the opportunity for convergence of economic legislation, the opening of economies to each other and the continued reduction of non-tariff barriers to trade, which will stimulate investment, exports and growth;

New partnership perspectives opened by ENP Increased financial support: EU financial assistance for ENP countries and new European Neighbourhood and Partnership Instrument (ENPI) Support including technical assistance and twinning to meet EU norms and standards, and targeted advice and support for legislative approximation through a mechanism such as TAIEX;

Priority areas Rule of law Improvement of business climate Economic development and poverty reduction Cooperation on JLS and border management Regional cooperation Resolution of internal conflicts Cooperation on foreign and security policy Transport and Energy

Monitoring and follow up Yearly cooperation committe Yearly sub committees (Trade and Economics, JLS) Yearly progress reports Consultation with major stakeholders GoG implementation plan

1st progress reports on 2007 Good progesss on judiciary reforms, improving state revenues and fight against corruption (but independence and impartiality of judiciary remains an issue) Progress in improving business climate, reforming revenue service and VET Proper implementation of laws in the area of governance and human rights is needed

Progress and problems Food safety Labour code Secondary legislation for customs code Competition and company law Prison conditions Property rights Civil service law Statistics

EC cooperation with Georgia ENPI - Context, challenges and timeframe

ENPI - Main facts Scope Country specific programmes Cross border cooperation with EU Member States Region 17 countries: Mediterranean, Eastern Europe, Russia, Caucasus, Middle East Funding Average €1.6 billion per year Ref Reg: 1638/2006 of 24.10.06 Replaces Mainly Tacis and Meda Regulations

The programming process EC Delegation ENPI Presentation March 2007 The programming process Strategy Papers Multi-annual Indicative Programmes Annual Action Programme ►normally attached to Strategy Papers ► set global and per priority allocations ► cover 3 – 4 years ► Analysis of the situation ► Response strategy ►Priority sectors ► 7 years ► revised at mid-term ►annual ► describe projects identified for financing ► define the budget per project ►lead to EC decision & commitments of funds There is one specific strategy paper for CBC. Comitology  management procedure No changes compared with the present situation 16 Federico Berna

CSP and NIP define four priority areas four Geogia Support for democratic development, rule of law and governance Support for economic development and ENP AP implementation Support for poverty reduction and social reforms Support for peaceful settlement of Georgia’s internal conflicts

Allocation for Georgia NIP 2007-2010 124 million €uro 2007 : 24 M€ 2008: 28,8 M€ 2009 : 30,4 M€ 2010: 37,2 M€ 18

Budget allocation for the NIP 2007-2010 Priority area Mio € % Support for democratic development, rule of law and governance 31.5 26 Support for economic development and ENP AP implementation Support for poverty reduction and social reforms 38.4 32 Support for peaceful settlement of Georgia’s internal conflicts 19 16 Total 120.4 100

AAP 2007 Georgia Programme Budget Implementation Support to PFM reforms 16 Mio € Sector Support Twinning Facility 4 Mio € Twinning/TA Rehabilitation in Conflict Zones 4 Mio € Grant contracts TOTAL 24 Mio € 20

AAP 2008 Georgia Programme Budget Implementation Support to criminal justice reforms 16 Mio € Sector Support Twinning Facility 6.8 Mio € Twinning/TA Rehabilitation in Conflict Zones 6 Mio € Grant contracts TOTAL 28.8 Mio € 21

Other funds and instruments Regional programmes (especially transport, energy, environment) Interregional programms (Erasmus, Tempus, Taiex, Sigma, etc.) Cross Border Cooperation Specific instruments (EIDHR, IfS) Thematic budget lines (NSA, Migration, etc.) Specific funds (governance facility, investment facility)

Ongoing Tacis projects Still TACIS projects from 2004 to 2006 Ca. 200 contracts in many areas Rule of law and governance Customs, taxes Border management and fight against drugs Health Statistics Etc.

New cooperation modalities Isolated TA projects almost abolished Sector support programmes (including budget support) Twinning

For Georgia the structure for AP is quite straight forward 1 sector programme (to be chosen each year in function of the PIN and sector readiness) 1 twinning programme (kind of facility that can respond to the whole area covered by NIP) 1 conflict intervention (rather project oriented)

Sector choice within NIP so far 2007 “Public finance management” 2008 “Criminal justice reform” 2009 still in discussion. Probably “Vocational training and educational”

Programming challenges for AP 2008 “Twinning” still experiences little request “Conflict” very sensitive issues with little input from government so far. Difficulty to agree on activities as well with Georgian government as with the break away regions “Rule of law” still not very structured sector

Timeframe AP2008 11/07 DEC sent first draft proposal on budget allocation to government 12/07 Official response and Elaboration of Project Identification Fiches (PIF) 12/07 PIF go through first Quality support group meeting (QSG1) 02/08 Finalisation of Action Fiches and QSG2 03/08 Launching of Inter service consultation 05/08 ENPI Committee meeting 06/08 End of European Parliament’s right of scrutiny 07/08 Commission Decision 08/08 Financing Agreements 10/08 Beginning of implementation period