By Decision 2000/244/EC the Council provided exceptional financial assistance for Tajikistan and extended the implementation period of the assistance to Armenia and Georgia until 2004.

In case of Georgia, the objectives of the assistance have not been fully met, owing to an unsatisfactory economic policy environment in the country during most of the implementation period.

Therefore, only EUR 31,5 million of the total grant component of EUR 65 million for Georgia was committed and paid under the exceptional financial assistance.

The present authorities of Georgia are committed to economic stabilisation and structural reforms, supported by the International Monetary Fund (IMF) through a three-year arrangement under the Poverty Reduction and Growth Facility (PRGF) which was approved on 4 June 2004 for a total amount of SDR 98 million. Subsequently, the Paris Club creditors agreed on 21 July 2004 to a restructuring of Georgia’s bilateral official debt on the Houston terms.

The new Government of Georgia also received strong support from the international community at the donors’ conference held in Brussels on 16 June 2004.

The World Bank approved in June 2004 a USD 24 million Reform Support Credit, and will continue its assistance to Georgia under a new Country Partnership Strategy in the form of Poverty Reduction Support Operations.

The Georgian authorities have expressed their intention to pursue early debt repayments to the Community with a view to improving debt sustainability.

As EU-Georgia relations are developing within the framework of the European Neighbourhood Policy, which is expected to lead to deeper economic integration, Community support for the government’s economic reform programme is considered appropriate.

Making available an amount equivalent to the uncommitted grant component of the exceptional financial assistance, which would support the country’s economic reforms and help reduce external indebtedness, is an appropriate contribution by the Community to the implementation of poverty reduction and growth strategies in Georgia.

In order to ensure efficient protection of the Community’s financial interests in connection with the present macro-financial assistance, it is necessary to provide for appropriate measures by Georgia in relation to the prevention of and the fight against fraud, corruption and any other irregularities linked to this assistance, as well as for controls by the Commission and audits by the Court of Auditors.

The Commission services, with the support of duly mandated external experts, carried out in October 2004 an operational assessment of the financial circuits and administrative procedures at the Ministry of Finance of Georgia and the National Bank of Georgia to ascertain the existence of a framework for sound financial management.

The release of this grant assistance is without prejudice to the powers of the budgetary authority.

The Commission has consulted the Economic and Financial Committee before submitting its proposal.

The Treaty provides for no powers, other than those of Article 308 thereof, for the adoption of this Decision,