Thursday, April 15, 2021

EU warning and the future of the Georgian economy on the scales of Themis

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After the MEPs, the Georgian government on the risks of suspension of financial assistance, the EU executive structure Warned. There was talk of another possible tranche of macro-financial assistance. The suspension of EU financial assistance will significantly hurt Georgia’s already weakened economy; And fundamental reform of the judiciary is one of the most important mechanisms for improving the economy – this is the assessment of economists.

EU Foreign and Security Policy Service Spokesperson The statement issued by the name clearly states that:

  • If the Supreme Court Judges Sampling Process Council of Europe Of Venice Commission RecommendationWill not be reviewed in full compliance with BT, Georgia may be suspended Macrofinance Aid Second In the tranche.
  • The European Union considers it necessary for the Venice Commission to adopt the legislative changes approved on 1 April. it is possible Fast ” To send, to determine – “Corresponds If No. Received Amendments, Venice Commission Previous Recommendations “.
  • It is unfortunate for the EU that last time the Parliament of Georgia did not wait for the conclusion of the Venice Commission and approved the amendments (September 30, 2020) in an expedited manner.

In the autumn of 2020, when the legislative changes were approved without the Venice Commission, the Georgian Dream authorities said that they were not in a hurry, but the Venice Commission It’s too late. These processes were followed by harsh assessments of the European Union and strong signals were heard from the Council of Europe.

There were preliminary warnings as well. For example, on September 29, 2020, the then Prime Minister and number one on the Georgian Dream party list, Giorgi Gakharia, was reminded in Brussels that in connection with the selection of Supreme Court judges In law The changes were to be made in accordance with the recommendations of the Venice Commission of the Council of Europe.

The opposition says it is even unthinkable to receive clearer messages from Brussels.

“Now the Georgian government has a choice to make – they take into account the clear statements of our partners if they continue to rule through a clan and a court subordinate to one person.” – says the representative of “European Georgia”, Sergi Kapanadze.

On the second day of the harsh message received from Brussels, on April 8, in the afternoon, the Parliament of Georgia announced that the law would be sent to the Venice Commission for “final revision”.

They do not see any danger in the Georgian Dream. As Shalva Papuashvili, a member of the parliamentary majority, told reporters in the first half of the day on April 8, the Venice Commission can easily be assured that everything is being done in accordance with their recommendations.

“The purpose of these changes was to reflect the (Venice Commission) recommendations. Accordingly, all these changes have been implemented on the basis of the conclusion of the Venice Commission. We will have communication with the Venice Commission. We will send this law for them to see and learn about this law. As for the statement, it follows from the content that the Venice Commission is not aware of the final version, as it was adopted in the form of law “- Said Papuashvili.

According to him, the acceleration of the process was caused by the fact that “Selection procedures for (candidates) are underway at the High Council of Justice”, but “This law and the recommendation of the Venice Commission concerned the last stage of the interview process, when voting takes place”.

Nazi Janezashvili, a non-judicial member of the High Council of Justice, told RFE / RL that the legislative changes would not solve the main problem of “clan governance” and would not safeguard the manifestations of “conflict of interest,” including. Janezashvili to send the already approved law to the Venice Commission Delayed Believes.

A long story

Do you remember the many waves of noise in the process of selecting judges of the Supreme Court in Georgia and abroad? The assessments of the international partners were sharply negative – with the legislation approved in May 2019, the candidates for the High Council of Justice Sampling With the process If at the end of 2019, from the 20-person list of candidates 14 Judge With approval In connection with.

International partners noted that this whole process was not taken into account Of Venice Commission Significant recommendations and numerous shortcomings were identified in the selection process for judges.

The scandalous processes related to the selection of judges of the Supreme Court have been going on for almost two years now. Is the head In December 2018, When a dubious list of 10 judges fell amid a great deal of noise and controversy in Parliament. It was after this that work began on the relevant norms of the legislation, which remain the subject of criticism until now.

International aid, economics and the judiciary

Economists agree that the suspension of international financial assistance, the likelihood of which before MEPs too They talked and what is not ruled out in the US will be a significant blow to Georgia’s already very weakened economy. At the same time, international partners are constantly reminding us that judicial reform plays a major role in terms of economic development.

In the new document – “In the strategic vision of economic development”, Which was developed within the joint platform of the Economic Policy Research Center (EPRC) and the USAID Democratic Governance Initiative (GGI), reflects the unfavorable statistics of the Georgian reality and so on:

  • In 2020, the Georgian economy shrank by 6.1%;
  • The number of hired employees decreased by 3.8%, while the salaries paid to them decreased by 6.1%;
  • According to preliminary estimates, the economic decline in January 2021 was 11.5%, while in February it was 5.1%, the average decline in January-February was 8.3 %3.
  • In 2020, Georgia lost 83.4% of its tourism revenues. Previously, tourism revenues amounted to 2.611 million US dollars, accounting for almost 15% of GDP.
  • In 2017-2019, the number of non-state or private sector employees decreased by 26.4 thousand, while the number of employees in the public sector increased by 27.8 thousand – “productive jobs have been replaced by activities that are largely a yoke for the economy.”

According to the economic group, the current state of the Georgian economy cannot be blamed only on the pandemic, and in this regard, two factors must be taken into account: the problems before the pandemic and the mistakes made during the management of the pandemic.

“The country is on the brink of an abyss and we want to warn the government once again” – Nino Evgenidze, the head of the Economic Policy Research Center, tells Radio Liberty. The document sets out a specific plan in various directions and calls for judicial reform as the first line of vision for the future.

“If there is no judicial reform, we will not be able to attract foreign direct investment to the country, and this is directly related to the creation of new jobs and the improvement of the economic situation of the people who suffered more from this pandemic than they did at the end of 2019.” -. Evgenidze tells us.

60 million euros – “not a joke”

According to information provided to RFE / RL correspondent Richard Jozwiak from Brussels, the second tranche of macro-financial assistance, which Georgia expects from the EU in the fall, will amount to 60 million euros. This amount in the national currency is at least 240 million GEL.

Ramaz Gerliani, President of the Center for Economic Transformation, hopes that the case will not go away, otherwise 60 million euros is “not a joke” and there will be a significant loss, which will hurt the GEL exchange rate:

“The amount of macro-financial assistance goes directly to the treasury and is spent from there. The € 60 million conversion could have a significant positive impact on the GEL exchange rate. When the GEL exchange rate breaks down, the National Bank often raises $ 20-30 million at auction. The conversion of 60 million euros will equate to several such auctions.

After that, this process also affects commodity prices. Magito is called macro-assistance that affects macro-parameters – economic growth, exchange rate, inflation or part of employment. “This type of assistance responds mainly in these areas.” – Ramaz Gerliani tells us.

According to him, it is also disturbing the fact that the country receives even a warning to stop the tranche – “Such messages damage the image of the country and frighten potential investors or future partners.”

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