HIGH REPRESENTATIVE

OF THE UNION FOR

EUROPEAN FOREIGN AFFAIRS AND
COMMISSION SECURITY POLICY

Brussels, 5.2.2021
SWD(2021) 18 final

JOINT STAFF WORKING DOCUMENT

Association Implementation Report on Georgia

EN EN
1. Summary
In line with the EU’s Neighbourhood policy, this report sets out the state of play with
Georgia’s implementation of its commitments under the EU-Georgia Association Agreement
(AA) since the publication of the last report on 6 February 2020 and ahead of the next
Association Council scheduled for the first quarter of 2021.
Georgia continued steadily on its European path including in the challenging COVID-19
context.
Parliamentary elections took place on 31 October and 21 November. In the run-up to these
elections, the Georgian Parliament adopted constitutional amendments changing the electoral
system to a more proportional one, as well as an election reform package. The package
partially addressed OSCE/ODIHR recommendations issued after the 2018 presidential
elections 1. The 2020 parliamentary elections were competitive and, overall, fundamental
freedoms were respected according to the joint statement of preliminary findings and
conclusions of the international observers from the OSCE Office for Democratic Institutions
and Human Rights and the Parliamentary Assemblies of the OSCE, Council of Europe and
NATO. The international observers noted, however, that the conduct of the elections was
impacted by pervasive allegations of pressure on voters and blurring of the line between the
ruling party and the state throughout the campaign and on election day, reducing public
confidence in some aspects of the process. The opposition questioned the results of the first
round and boycotted the second round of the majoritarian elections as well as the opening
session and early proceedings of the new Parliament. At the beginning of 2021, no political
agreement had been found between the political parties. The new Parliament confirmed the
cabinet led by Prime Minister Giorgi Gakharia, consisting of 11 Ministers retaining their
posts and a new Justice Minister.
Civil society remained very active in holding public institutions to account and monitoring
the implementation of the AA, including the Deep and Comprehensive Free Trade
Agreement (DCFTA). Against the backdrop of the COVID-19 pandemic, civil society played
a more important role than ever in supporting those in need.
A visa-free regime is in place for Georgian citizens to visit Schengen and Schengen-
associated countries. Georgian citizens have made over 1,150,000 visits since its entry into
force in March 2017. The third report under the Visa Suspension Mechanism adopted on 10
July 2020 confirmed that visa liberalisation benchmarks continue to be fulfilled. The high
number of unfounded asylum applications remains a challenge despite the decrease in 2020,
in the context of the introduction of COVID-19 related travel restrictions. Georgia has
undertaken a number of actions in this regard, including the adoption of the Law on the Rules
and Procedures for Georgian Citizens exiting and entering Georgia by the Parliament in
September 2020.
Important challenges remain with regard to the independence and accountability of the
judiciary. In particular, public trust in the High Council of Justice remains low. On 30
September, the Parliament adopted further legislative amendments in relation to the
nomination process of Supreme Court judges, without awaiting the relevant Venice
Commission opinion and not fully addressing the continued shortcomings in this process.

1
https://www.osce.org/odihr/elections/georgia/412724

1
The economy has entered a significant recession in 2020, especially in the second to fourth
quarters of the year, with the International Monetary Fund (IMF) forecasting a contraction of
5% 2.
The EU remains Georgia’s largest trading partner. In the first eleven months of 2020, trade
turnover between the EU and Georgia amounted to EUR 2.1 billion, down by 12% compared
to the same period in 2019. From January to November 2020, the EU27 imported goods from
Georgia worth EUR 671 million, up by 16% compared to the same period in 2019. In the
same period, the EU27 exported goods to Georgia worth EUR 1,443 million (21% lower than
in the first eleven months of 2019).
As part of the “Team Europe” approach, the EU has delivered a robust response to support
Georgia’s efforts in tackling the COVID-19 pandemic and has reprogrammed EUR 183
million of grants to support Georgia. In addition, the EU allocated an exceptional Macro-
Financial Assistance programme of EUR 150 million, already partially disbursed in 2020.
Part of the 2019 bilateral allocation (EUR 127 million) and of the 2020 bilateral allocation
(EUR 102.7 million) have been reprogrammed to better support the country’s COVID-19
response in three main areas: health sector, socio-economic recovery and the most vulnerable
population. The EU support focuses on the Georgian Government’s Anti-crisis Economic
Plan to address the challenges of the COVID-19 pandemic, accompanied by flanking
measures in the areas of environment, health, socio-economic recovery and migration, as well
as the promotion of human rights.
The EU remained strongly supportive of Georgia’s sovereignty and territorial integrity within
its internationally recognised borders, including by continuing the efforts of the EU Special
Representative, its engagement as co-chair in the Geneva International Discussions and the
continued presence on the ground of the EU Monitoring Mission for over 12 years now.
Georgia continues to be committed to and participates actively in the Eastern Partnership and
the ongoing reflection on its future.

2. Political dialogue, good governance and strengthening institutions

2.1. Democracy, human rights and good governance
2020 was an election year and saw major political developments. Following the failure by the
parliamentary majority in 2019 to fulfil its promise to introduce a fully proportional election
system, the political parties did not agree on the fundamental rules guiding elections in a
context of continued polarisation. On 8 March, with the facilitation of the Ambassadors of the
EU, Germany, the US and the Council of Europe, a wide spectrum of Georgian political
parties agreed on a compromise for the election system for 2020. In June, the Parliament
revised the constitution and adopted relevant amendments to the electoral code. This paved
the way for the immediate introduction of an electoral system with 120 proportional and 30
majoritarian seats, and a 1% threshold in Parliament (compared to the previous model of 77
proportional and 73 majoritarian seats, and a 5% threshold). The new system puts Georgia on
track for the planned introduction of a fully proportional election system in 2024, as foreseen
by the constitution.

2
International Monetary Fund, World Economic Outlook, October 2020.

2
The Georgian Parliament also adopted an electoral reform package to address OSCE/ODIHR
recommendations issued after the 2018 presidential elections. This package included the
regulation of campaigning rights of employees on the public payroll, rules on second rounds,
the introduction of a 25% gender quota, the improvement of conflict of interest rules for
election commission members and the introduction of a regressive party finance model.
Recommendations on addressing voter intimidation, dispute resolution and commission
compositions were not fully addressed.
Georgia held the first round of its 2020 Parliamentary elections on 31 October, under a
revised electoral system and with high voter turnout, despite the challenging context of the
COVID-19 pandemic. According to the joint statement of preliminary findings and
conclusions of the international observers from the OSCE Office for Democratic Institutions
and Human Rights and the Parliamentary Assemblies of the OSCE, Council of Europe and
NATO, the elections were competitive and, overall, fundamental freedoms were respected.
The observers noted, however, that the conduct of the elections was impacted by pervasive
allegations of pressure on voters and blurring of the line between the ruling party and the
state throughout the campaign and on election day, reducing public confidence in some
aspects of the process. Georgian civil society organisations noted a number of shortcomings
also in the handling of complains and appeals. The opposition parties boycotted the second
round of the Parliamentary elections on 21 November and collectively questioned the overall
outcome. They also boycotted the opening session of the new Parliament. As of the end of
2020, they had not taken up their mandates in the new Parliament. Efforts to find an agreed
way forward among the political parties were ongoing at the end of 2020, facilitated by the
EU and US Ambassadors, with the objective of reaching a solution, which would see a fully
representative Georgian parliament.
Late 2020 the Parliament confirmed the cabinet led by Prime Minister Giorgi Gakharia,
consisting of 11 Ministers retaining their posts and a new Justice Minister, and the
government programme.
In January 2021, Georgian Dream Chair Bidzina Ivanishvili announced that he was leaving
Georgian politics. The party congress elected Irakli Kobakhidze as his successor. United
National Movement, also changed leadership in January 2021 after its former Chairman,
Grigol Vashadze, resigned. Nikanor Melia was elected as the new Chairman.
Georgia’s media landscape remained pluralistic and competitive, but also highly polarised.
In the 2020 World Press Freedom Index 3 Georgia has maintained its 60th rank among 180
countries. Its Freedom House rating decreased slightly, with an aggregate “freedom score” of
61, compared to 63 in 2019 4.
The election of the Ajara Public Broadcaster’s new Director in November 2019 was preceded
by a stand-off and the journalists’ warnings about attempts to change the TV’s editorial
policy to a government-leaning one. The confrontation aggravated by January 2020, when
part of TV employees established an alternative trade union to defend their rights. In the
course of 2020, key journalists and managers were gradually dismissed or left the channel.
Several of them filed cases in court.

3
https://rsf.org/en/georgia
4
https://freedomhouse.org/country/georgia/freedom-world/2020

3
Amendments to the Law on Broadcasting, setting out amongst others additional obligations
to protect minors from harmful influence, were adopted in July 2020. Broadcasters criticised
the amendments. They requested a clear definition of its legal terms and criteria on when to
consider influence as harmful, and asked for a moratorium on sanctions (which can include
the suspension of a broadcaster’s licence). The Georgian Democratic Initiative (GDI)
challenged the amendments in the Constitutional Court.
Euronews Georgia launched fully-fledged broadcasting in September.
In June 2020, Reporters without Borders called upon the Georgian Government to guarantee
the safety of journalists, following an alleged plot to murder a TV Mtavari journalist 5.
Civil society remained very active and involved in monitoring the implementation of the AA,
including the DCFTA, in policy formulation and in holding the Government accountable,
including to some extent at local level. Formal liaison mechanisms with the Government and
the Parliament could be further strengthened. During the COVID-19 crisis, civil society
played an important role in supporting those in need and complementing state aid.
The number of CSOs that are part of the Human Rights Council has doubled from six to
twelve. An Advisory Group to the Human Rights Council was established with currently
more than 80 participating non-governmental organisations.
The Public Defender’s Office continued to play an active oversight role.
The Government took special measures in spring 2020 to support survivors of domestic
violence during the COVID-19 crisis, by exempting them from movement restrictions and
providing information on state support 6. The number of reports of such cases to the police
showed an increase 7.
As regards gender equality, Georgia’s 2020 Global Gender Gap score stood at 70.8%
(compared to 68% in 2018), which is for the first time above the global average of 68.6%,
putting it 74th out of 153 countries 8. According to Georgian statistics, the average monthly
earnings of men were 1,473 GEL, whereas for women they amounted to 978 GEL in the third
quarter of 2020 9.
The amendments to the constitution and Electoral Code of Georgia in respectively June and
July increased attention to gender sensitivity and introduced gender quotas for local and
national elections. For the 2020 parliamentary elections the quota of 25% of the proportional
party candidate list (no quotas apply to majoritarian candidates) were met. Out of a total of
150 members of Parliament, 31 female members were elected.
In September, the Parliament adopted substantial amendments to the Labour Code. Important
improvements include the introduction of paid maternity leave, provisions protecting
pregnant women and women who recently gave birth, including working arrangements in the
case of night shifts and time off for medical examinations. The amendments also provide

5
https://rsf.org/en/georgia
6
For an overview of the measures taken by Georgia during the crisis to mitigate its impact on women’s rights,
as reported to the Council of Europe: https://www.coe.int/en/web/genderequality/promoting-and-protecting-
women-s-rights#{%2263001324%22:[15]}
7
According to the Adviser to the Prime Minister on Human Rights and Gender issues.
8
http://www3.weforum.org/docs/WEF_GGGR_2020.pdf
9
https://www.geostat.ge/ka

4
better protection against discrimination, such as the introduction of all basic definitions (e.g.
direct and indirect discrimination, harassment) and the prohibition of termination of
employment contracts based on discriminatory grounds. Other amendments include
safeguards against excessive working time and collective redundancies.
In February, the Government adopted an Equality Chapter to the National Human Rights
Action Plan, setting out a range of actions to be implemented by Government agencies and
addressing the needs of those belonging to the Lesbian, Gay, Bisexual, Transgender, Intersex
(LGBTI) community.
In particular, women and persons in vulnerable situations, such as persons belonging to
ethnic minorities and to the LGBTI community, were hit especially hard by the pandemic.
The Government undertook dedicated efforts to mitigate the severe consequences of COVID-
19 on those groups.
The COVID-19 pandemic also brought challenges for children and families and required
new work and schooling methods. The Child Rights Code entered into force on 1 September
2020. It introduces legal grounds, safeguards and guarantees for all public and private entities
taking decisions related to the rights of the child. It focuses on the realisation of all rights and
freedoms for the child, with the main focus on the best interests of the child. The Code also
introduces the oversight by judges, as neutral and qualified agents, over cases of child
separation from families.
Violence against children in a family context, residential care, foster care 10 and educational
institutions remains a significant problem, with 70% of children experiencing at least one
method of violent discipline 11. At the same time, the confidence of the public to report cases
of violence to competent authorities is on the rise.
Childcare has not been fully de-institutionalised. Two large state-run institutions continue to
operate, housing about 80 children with severe and multiple disabilities. The Government
developed specialised family-type service and introduced two such facilities. Mechanisms for
specialised foster care service for children with complex disabilities and needs were
strengthened. Over 900 children live in 38 unregulated institutions, mainly boarding schools,
financed and run by local municipalities, the Georgian Orthodox Church and Muslim
communities. The effective functioning of the coordination mechanism dealing with de-
institutionalisation was hampered by the pandemic.
In July, the law on the rights of persons with disabilities was adopted, aiming at
harmonising the national legislation with the UN Convention on the Rights of Persons with
Disabilities. Further clarifications are required to ensure effective implementation and a
coordinating committee remains to be established.
With regard to ill treatment, the new State Inspector Service started its investigative
operations in November 2019 and launched a number of criminal investigations into alleged
crimes committed by law enforcement officers, which have led to several prosecutions.

10
“Monitoring of Child Care System – Effectiveness of Alternative Care Special report”, report developed by
the Public Defender’s Office; 2018.
11
Based on 2018 Georgia MICS (Multiple Indicator Cluster Survey) and secondary analysis published in 2020
(reports available at https://www.unicef.org/georgia/reports/2018-georgia-mics-multiple-indicator-cluster-
survey and https://www.unicef.org/georgia/media/5511/file/Discipline_Report_ENGLISH.pdf)

5
With regard to public administration reform, a new Government decree 12 and its
supporting Handbook on Public Policy Making lays the regulatory and procedural foundation
for good evidence-based policy development. It has quickly become the primary guidance
document for Ministries. Its implementation requires comprehensive training and support, to
ensure better integration between policy and budget planning, and building the right
capacities, structures and processes in the relevant ministries. The introduction of a
mandatory Regulatory Impact Assessment for specific legislation is also an important
milestone, but also requires extensive training for proper implementation. In February,
amendments to the Law on Public Service (LPS) provided for internal competitions to fill
civil service vacancies, aimed at increasing career development opportunities and staff
retention within each public institution.
2.2. Foreign and security policy
In 2020, Georgia’s alignment rate with CFSP (EU declarations and Council decisions on
restrictive measures) was 62%, marking an increase from 55% in 2019. It continued to
participate in civil and military crisis management operations under the Common Security
and Defence Policy (CSDP) and to provide 32 troops to the EU military training mission
(EUTM) in the Central African Republic.
The impact of terrorism in Georgia is "very low" according to the Global Terrorism Index
(90th out of 138 countries). Georgia gives due attention to the fight against terrorism and
violent extremism. It is currently updating its chemical, biological, radiological and nuclear
(CBRN) National Action Plan, and is implementing relevant regional actions, such as CBRN
waste management and an interregional bio-safety project increasing its capabilities to
combat the COVID-19 pandemic.
On peaceful conflict resolution, the situation on the ground regarding the breakaway regions
remained relatively stable throughout 2020. However, ‘borderisation’ activities continued, in
particular along the South Ossetian Administrative Boundary Line (ABL) and tension in the
Chorchana-Tsnelisi area persisted. The Incident Prevention and Response Mechanism
(IPRM) 13 in the South Ossetian theatre (Ergneti IPRM) resumed its regular meetings in July
2020, but the IPRM in the Abkhaz theatre (Gali IPRM) remained suspended.
The EU continues to firmly support Georgia’s sovereignty and territorial integrity within its
internationally recognised borders. It also continues to actively support conflict resolution
efforts financially and through the work of the EU Special Representative for the South
Caucasus and the Crisis in Georgia, and the EU Monitoring Mission (EUMM). The Geneva
International Discussions (GID) did not hold in-person meetings until 10-11 December 2020
due to COVID-19. The EU Special Representative for the South Caucasus and the crisis in
Georgia maintained, however, regular contacts with all GID participants virtually and
undertook six visits to Georgia in the reporting period. The EU Monitoring Mission
continued to implement its mandate throughout the COVID-19 pandemic.

12
The Decree of the Government of Georgia No.629 “On the Approval of the Rules of Procedure for
Development, Monitoring and Evaluation of Policy Documents” (adopted on 20 December 2019 and in force
from January 1, 2020).
13
The IPRMs and the EUMM hotline are essential tools for addressing local security issues and promoting
continued confidence-building between security actors.

6
The COVID-19 pandemic presented an opportunity to develop some cooperation across the
dividing lines, including on health-related issues. While this did happen to a certain extent in
relation to the breakaway region of Abkhazia, including through support from Tbilisi, the
ABL with the breakaway region of South Ossetia remained sealed-off, including for
humanitarian purposes.
The new Abkhaz de facto leadership, which took ‘office’ in late April 2020, indicated an
increased interest in confidence-building measures, including through concrete actions. These
signals from the Abkhaz de facto leadership may lead to new opportunities for activities
under the EU non-recognition and engagement policy and positive steps towards conflict
resolution.
The Georgian Government started to implement its “A step to a better future” initiative to
promote peace and opportunities for people in the breakaway regions of South Ossetia and of
Abkhazia, though the prolonged closure of the crossing points and COVID-19 had a
hampering effect on the implementation of the economic component of the initiative.
2.3. Justice, freedom and security
Important challenges remain with regard to the independence and accountability of the
judiciary.

On 30 September, the Parliament adopted further legislative amendments in relation to the

nomination process of Supreme Court judges. The Parliament did not await the publication of
the Venice Commission Opinion on whether the draft amendments met the Venice
Commission’s earlier recommendations 14, even though it had itself requested this Opinion
after the second reading. The urgent Venice Commission Opinion, which was adopted on 8
October 15, noted that the amendments go in the right direction, in particular by providing that
each vote must be accompanied by public written reasoning. However, the Venice
Commission called for the disclosure of the identity of the members of the High Council of
Justice (HCoJ) who cast the vote and the reasoning. This would provide the basis for an
efficient appeal mechanism and increase public scrutiny of the behaviour of the individual
members of the HCoJ. Additionally, the Venice Commission pointed out that the amended
legislation does not foresee a second and final appeal against the second decision of the HCoJ
and that a mechanism is needed to stall the procedure until the final decision of the Supreme
Court is taken. In December, the HCoJ started interviewing candidates for nine vacancies at
the Supreme Court under the rules amended on 30 September 2020.
Amendments relating to the fourth wave of judicial reform entered into force in 2020. They
cover: disciplinary violations, regulation of the functioning of the HCoJ and HCoJ reform.
The obligation on the HCoJ to justify all its decisions remains to be further implemented. The
publication of judicial decisions was put on hold following the July ruling of the
Constitutional Court. A new legislative framework remains to be adopted by the Georgian
Parliament.

14
Urgent opinion on the selection and appointment of SC judges issued on 16. April 2019 and endorsed at the
Plenary 21/22. June (https://www.venice.coe.int/webforms/documents/?pdf=CDL-AD(2019)009-e)
15
Opinion on the draft organic law from 08 October 2020
(https://www.venice.coe.int/webforms/documents/default.aspx?pdffile=CDL-AD(2020)021-e)

7
The main focus of prosecutorial reforms in 2020 continued to be the separation of functions
between investigators and prosecutors. A legislative package was prepared.
On cooperation in criminal matters, the 2019 EUROJUST-Georgia cooperation agreement
enabled the swift and safe exchange of information. Georgia has strengthened international
law enforcement cooperation with Europol and CEPOL. There were no developments on
cooperation in civil matters, notably the signature/ratification of the Hague Conventions.
On preventing and fighting corruption, the Secretariat of the Anti-Corruption Council has
drafted a handbook on the risk assessment methodology for ministries and Legal Entities of
Public Law (LEPLs). The Civil Service Bureau has published an Asset Declaration
Handbook to improve the quality of the Declarations. No decision has been taken on the
establishment of an Anti-Corruption Agency16. The responsibility for the freedom of
information legislation has been moved from the Ministry of Justice to the Administration of
the Government, creating an additional delay in the reform of the legislation. Political
donations in the run-up to the parliamentary elections raised concerns in terms of alleged
conflicts of interest 17.
In the 2020 Transparency International corruption perception index 18, Georgia scored 56/100
(stable since 2019, but down from 58/100 in 2018), pointing to a stagnation of anti-corruption
measures. The report indicates that undue partisan influence over the law enforcement
agencies has rendered them effectively incapable of investigating cases of possible high-level
corruption. In the 2019 World Bank control of corruption indicator 19, Georgia has scored
74.04 (77/100 in 2017).
Following the adoption of the law on “facilitating the suppression of money laundering and
terrorism financing” on 30 October 2019 20, aiming to align with the 4th AML/CFT
Directive, two by-laws were adopted in June 2020 by the Financial Monitoring Service 21.
In January, the National Drug Monitoring Centre was established under the Inter-Agency
Coordinating Council on Drug Abuse and it has gradually become operational. A legislative
package for the liberalisation of drug policies is pending in Parliament for further
deliberation. Georgia continued its close cooperation with the European Monitoring Centre
for Drugs and Drug Addiction.
Georgia continued to implement its Migration Strategy and Action Plan and in December the
Government adopted the new Georgia Migration Strategy for 2021-2030. The visa-free
regime has been in place since March 2017. The third report under the Visa Suspension
Mechanism, adopted on 10 July 2020, confirmed that Georgia has taken actions identified in
the second report and the visa liberalisation benchmarks continue to be fulfilled. Despite the
decrease in the return rate, the cooperation on readmission is good. Georgia has put in place
concrete measures to address irregular migration and crime related challenges, notably the
Law on the Rules and Procedures for Georgian Citizens exiting and entering Georgia in
September 2020, which entered into force in January 2021. Further immediate actions are
16
https://www.transparency.org/en/blog/cpi-2020-georgia-anti-corruption-reforms-stall-political-crisis-state-
capture
17
https://idfi.ge/en/idfis-research-political-donations
18
https://www.transparency.org/en/cpi/2019/results
19
https://info.worldbank.org/governance/wgi/Home/Reports
20
https://fms.gov.ge/eng/page/laws
21
https://www.fms.gov.ge/eng/page/regulations

8
needed to address visa-free related challenges, in particular the high number of unfounded
asylum applications.
The Commission, the Justice and Home Affairs Agencies, the EU Member States and the
Georgian authorities have worked together on a set of operational measures to decrease
irregular migration and crime-related challenges linked to visa-free travel of Georgian
citizens to the EU, in line with the recommendations of the visa suspension mechanism
report. These include information campaigns on the rights and obligations of visa-free travel
and strengthening cross-border law enforcement cooperation to fight against Georgian
organised crime groups.
Georgia continued its efforts to strengthen border management, stepping up cooperation
with the European Border and Coast Guard Agency (Frontex). In June 2020, a new working
arrangement between Frontex and Georgia was approved. It aims to counter irregular
migration and cross-border crime and to exchange information and best practices in the field
of border management including return, also through joint risk analysis. The security and
surveillance infrastructure of the Border Police was further expanded and capacities of border
management institutions strengthened.
Police reform continued in line with priorities set by the Ministry of Internal Affairs in 2019.
These include separating the roles between prosecutors and investigators, as well as between
operational and investigative functions of different police officers, expansion of community-
based and intelligence-led policing, enhancing centralised analytical work, stepping up the
fight against cybercrime and organised crime and closer international cooperation.
A rise in complaints to the data protection authority shows greater public awareness of data
protection issues, with the vast majority concerning private sector entities. The number of
covert investigative activities was stable and they were mostly carried out on the basis of a
court ruling. A new data protection law was initiated by Parliament but discussions have not
led to an agreed draft so far. Close alignment of this new draft with the European General
Data Protection Regulation (GDPR) will be key.
The Georgian National Cybersecurity Strategy and Action Plan 2020-2022 was drafted in
2019 and is still pending approval by the Government.

3. Economic development and market opportunities

3.1. Economic development
The economy entered a significant recession in 2020, caused by the COVID-19 pandemic. In
the second quarter the gross domestic product (GDP) declined by 12.3% year-on-year. Recent
forecasts 22 suggest an economic contraction of around 5%, primarily due to COVID-19-
related restrictions on economic activity, disruption of tourism and collapse in consumption
and external demand 23. Furthermore, the contribution of net exports of goods and services is
also likely to be negative.

22
International Monetary Fund; Government of Georgia
https://openknowledge.worldbank.org/bitstream/handle/10986/34518/9781464816437.pdf?cid=eca_tt_eca_en_
23

ext&fbclid=IwAR1VwQFONgELZ3ke_FPRAnQQMW_2tD5y4XiwAt7XWg8CpDiLoJw3ViS8mBA

9
Inflation decreased to 3.8% year-on-year in September 2020 from 7% in December 2019 and
is expected to remain above the target of 3% at the end of 2020. Due to the cost of measures
to mitigate the impact of the crisis, increased healthcare spending and lower revenues, the
fiscal deficit in 2020 is expected to increase to some 8.5% of GDP, in line with a budget
revision adopted in June. The debt to GDP ratio is estimated to reach 59.9% by the end of
2020 24, i.e. close to the 60% ceiling of Georgia’s Economic Liberty Act (which can be
justified given the state of emergency).
Similarly, Georgia’s balance of payments has come under pressure due to multiple shocks.
The current-account deficit, which narrowed to 5.1% of GDP in 2019, is expected to increase
to above 10% for 2020 due to a sharp deterioration of the services balance (mainly tourism).
The increased current account deficit will be financed by continuing (albeit slower) inflow of
foreign direct investment and, most importantly, by increased volumes of grants and
concessional loans already committed by international partners, including the EU.
In May 2020, IMF approved support to Georgia to address the COVID-19 pandemic. The
disbursement of budget support (about USD 200 million) helped the authorities meet urgent
medical and socio-economic needs. Georgia also received additional support from the Asian
Development Bank, the Asian Infrastructure Investment Bank, the European Bank for
Reconstruction and Development, the European Investment Bank, Germany through KfW,
France through the Agence française de Développement and the World Bank Group.
Georgia’s structural reform agenda is reflected in the new EU Macro-Financial Assistance
programme (EUR 150 million), with attached conditions which focus on improving
governance, including justice reform; public finance management; labour market; and energy
efficiency. The Georgian Parliament adopted this programme in September. The first
instalment of this programme (EUR 75 million), as well as the second tranche of the previous
EU Macro-Financial Assistance programme (EU 25 million) were disbursed on 25 November
2020.
Georgia continued to do well in international rankings on the business environment. For
example, in the World Bank’s “Doing Business”’ index it now ranks 7th out of 190 countries
and is in the world’s top 10 countries as regards starting a business (2nd), registering property
(5th) and protecting minority investors (7th). On the other hand, it is ranked lower on resolving
insolvency (64th) and trading across borders (45th). The Law on Rehabilitation and Collective
Satisfaction of Creditors, as well as other legal reforms (Enforcement Law and Mandatory
Third Party Liability Insurance) experienced delays. Moreover, challenges remain with
regard to the independence of the judiciary, legal certainty and ongoing investigations of
certain major businesses, which have an impact on the business environment.
The Government’s COVID-19 Anti-Crisis Plan for Agriculture required an update of the
Action Plan 2020 of the Rural Development Strategy of Georgia 2017-2020 and will require
a further update of the Action Plan 2021-2023 of the 2021-2027 Agricultural and Rural
Development Strategy. These plans include measures aimed at increasing primary production
and boosting resilience in the sector, stabilising basic foodstuff import prices and diversifying
import markets. The agricultural sector has proven to be one of the most resilient sectors to
the COVID-19 crisis.

24
2021 State Budget data

10
The Government started implementing the Pilot Integrated Regional Development
Programme targeting the EU focal regions (i.e. Kakheti, Imereti, Guria, Racha-Lechkhumi
and Kvemo Svaneti). Through an open and competitive call for proposals, 11 municipalities
received financing for integrated territorial development measures amounting to GEL 5
million. Progress in the implementation of the 2019-2025 Decentralisation Strategy, which
envisages a series of stakeholder consultations and research, was limited due to the COVID-
19 outbreak.
The reform of public internal financial control did not make significant progress in 2020.
Draft amendments to the State Audit Law, extending the mandate of the State Audit Office
to the revenue side of the budget, were submitted to the Parliament but not yet voted as of
end 2020.
On taxation, the work on legislative approximation in the area of indirect taxation, namely
value-added tax (VAT) and excise duties has continued.
Strengthening of the national statistical system (NSS) to help it comply with European and
international norms and standards in a number of statistical domains, including External
Sector Statistics, National Accounts, Business Statistics and Social Statistics, continued.
As regards industrial and enterprise policy, the Government continued to implement the
Small and Medium-sized Enterprises (SME) Strategy. The SME Policy Index 2020 25
concludes that Georgia has made further progress and considerably improved the operational
environment for SMEs. The report especially welcomes progress in entrepreneurial learning
and women’s entrepreneurship, the continued simplification of business registration, and the
increase in e-government services.
To tackle the economic challenges caused by COVID-19, the SME support agency Enterprise
Georgia adapted its programmes. The agency extended the scope of its programmes and
diversified its priority sectors, e.g. by adding a focus on hospitality and tourism industries
development. The micro and small business support programme increased to GEL 40 million.
Currently, there is no consolidated framework for consumer protection in Georgia. The
regulatory bodies covering financial, communication and energy implement consumer
protection measures in their respective sectors. The Market Surveillance Agency enforces the
technical regulations on safety of consumer products. Georgia has drafted a consumer rights
protection law, which is pending adoption as of end 2020.
As regards fisheries, Georgia continues to cooperate under the Sofia Ministerial
Declaration 26 and to implement the new fisheries governance. The level of monitoring,
control and surveillance of fisheries in its waters remains not entirely adequate. Georgia has
been working closely with the EU on regional management measures for iconic Black Sea
fish stocks.
In May 2020, Georgia passed the Aquaculture Law. This Law defines aquaculture zones
allocations in the coastal areas and in inland waters; establishes conditions for issuance of
permits; and regulates aquaculture facilities across the country. The Government placed

25
https://www.oecd.org/science/sme-policy-index-eastern-partner-countries-2020-8b45614b-en.htm
26
http://www.fao.org/gfcm/meetings/blackseaconference2018/sofiadeclaration/en/

11
aquaculture products on the priority list of products for which to pursue authorisation to the
EU market.
Georgia has continued to engage actively with the European Commission on addressing the
shortcomings identified in relation to the fight against illegal, unreported and unregulated
(IUU) fishing. Progress was made with regard to the deregistration of vessels from the State
Ship Registry. The process of adopting a legal framework covering fishing and fishing related
activities of the Georgian long distance fleet operating outside the Black Sea Area is ongoing.
In the maritime sector, Georgia has implemented 16 out of 22 of the directives and
regulations referred to in the AA. The Maritime Transport Agency is currently working on
the transposition of the remaining directives.
Georgia plays an active part in the Steering Group meetings of the Common Maritime Agenda
for the Black Sea 27, contributing to the discussion on the impact of COVID-19 on blue
economy sectors, future flagship projects and related investment perspectives.
Tourism had been steadily growing in previous years and the industry had reached an 8.1%
share of GDP 28 in 2019, but was severely hit by the crisis caused by the COVID-19
pandemic. January to September saw 1,369,086 international visitor trips, which was 77.1%
less as compared to the same period in 2019 29.
The draft Law on Entrepreneurship (“Company Law”) was submitted to the Parliament in
September 2020. The objective is on the one hand to regulate in more detail corporate
relations and thus enhance legal certainty in case of judicial disputes, and on the other hand to
approximate the legal framework with relevant EU directives. As of January 2021, the Law is
still pending adoption.
As regards financial services, the National Bank of Georgia is strengthening the regulatory
and supervisory frameworks for banking, non-banking, payments, and capital and securities
markets. The Insurance State Supervision Service of Georgia has been taking measures to
increase the solvency and profitability of the insurance sector, and to diversify insurance
products.
With the aim of improving the investment climate, competitiveness and access to finance of
local businesses, Georgia has aligned its Law on Accounting, Reporting and Auditing, with
EU and international practice, notably to International Financial Reporting Standards. In
addition to financial reporting, non-financial reporting including on corporate governance is
being encouraged.
As regards employment, the slow trend of decreasing unemployment has been negatively
impacted by the COVID-19 crisis. As of 2020, a new methodology on the calculation of self-
employed people has been applied, no longer including people in subsistence farming. As a
result, the unemployment rate at national level for 2019 was recalculated to 17.6%, instead of
11.6%. It reached 18.3% in the first two quarters of 2020, and dropped down to 17% in the
third quarter.
The Employment Service Agency, separating social services from employment services, has
been operational since the beginning of 2020. Currently the Headquarter office and ten
27
https://ec.europa.eu/maritimeaffairs/press/black-sea-ministers-endorse-common-maritime-agenda_en
28
Preliminary information of Georgian National Tourism Administration
29
Source: Georgian National Tourism Administration

12
regional offices, out of which five are in Tbilisi, are fully operational; two regional offices are
partly operational and three are expected to be operationalised in the first half of 2021. In
July, Parliament approved the Law on Employment Services, which addressed some
legislative gaps and defined public employment service provision in Georgia.
In addition to important amendments to the Labour Code, the Law on the Labour Inspection
Services was approved in September 2020, extending the Labour Inspectorate’s mandate to
include labour rights and conditions (in addition to health and safety issues) and changing its
status to a more independent agency under the Ministry.
During the COVID-19 pandemic, the Targeted Social Assistance (TSA) programme was
scaled up to provide temporary cash transfers to households in extreme poverty, workers who
lost jobs due to the pandemic, and families in vulnerable situations. The pension fund was
also slightly increased. The Parliament adopted the pension indexation amendment,
introducing a rules-based mechanism for indexing public pensions and leading to an increase
in pensions as of January 2021.
The development of an overarching national Public Health Strategy was delayed due to the
COVID-19 outbreak. Work progressed on the electronic healthcare system, improving the
quality of care and reducing inequalities in the health system. The maternal mortality ratio
was 28.9 per 1,000 births in 2019. As of end December, the total number of COVID cases
was 227,420 out of which 2,505 cases had a fatal outcome, and 211,727 patients recovered.
Georgia continued to work on aligning its legislation on blood safety, tissue transplantation,
tracking of environmental health, and tobacco control with EU directives.
3.2. Trade and trade-related matters
In the first eleven months of 2020, the trade turnover between the EU and Georgia amounted
to EUR 2.1 billion, down by 12% compared to the same period in 2019. From January to
November 2020, the EU27 imported goods from Georgia worth EUR 671million, up by 16%
compared to the same period in 2019. In the same period the EU27 exported goods to
Georgia worth EUR 1,443 million (21% lower than in the first eleven months of 2019) 30.
On technical barriers to trade, Georgia has shown continuous improvements of its national
quality infrastructure. Georgia has adopted 16,000 standards, out of which 8,000 represent
European ones, and synchronised the database of standards with the European Union one.
With regard to metrology, laboratory equipment and staff capacity have been upgraded. The
Georgian Accreditation Centre has been preparing for membership in the International
Laboratory Accreditation Cooperation (ILAC). The newly created Market Surveillance
Agency has been actively working on enforcement of technical regulations approximated
with the relevant EU acquis.
On food safety and sanitary and phytosanitary (SPS) standards, Georgia has
approximated 169 veterinary, phytosanitary and food safety regulations out of 272 EU agri-
food legal instruments envisaged to be approximated by 2027.
The Food Safety Strategic Implementation Plan of the Agricultural and Rural Development
Strategy of Georgia 2021-2027 was finalised by September 2020, but as of January 2021 the
approval is pending.

30
Eurostat COMEXT, EU27.

13
Regarding the authorisation of Georgian products to the EU market, some progress has been
registered during 2020. Most recently, in November 2020, the European Commission granted
the authorisation of animal by-products for pet food 31. As of early 2021, the Ministry of
Environmental Protection and Agriculture is in the process of reviewing and addressing the
EU’s comments on the Georgia Aquaculture Residue Monitoring Plan.
The new Customs Code, representing the primary legislative framework for customs
activities, entered the implementation phase.
The Georgian Revenue Service (GRS) made progress in joining the Common Transit
Convention (CTC) and launching the new computerised transit system. GRS developed a set
of transit procedures, set the requirements of the future IT system and worked on the design
and implementation of training programmes and modules.
Georgia continues to implement the DCFTA provisions on competition and amended the
Law of Georgia on Competition 32. These amendments modify the procedural norms and
mechanisms for controlling concentrations, as well as the structural arrangement of the
Competition Agency. They also define the competences of the Agency and the regulatory
bodies, such as the National Bank of Georgia, Georgian National Communications
Commission and the Georgian National Energy and Water Supply Regulatory Commission 33.
Regarding postal and courier services, Georgia is continuing to formulate a postal policy
and relevant reforms.
As regards the transparency of DCFTA implementation, a number of roundtables were held
for local entrepreneurs and media representatives in the format of a trade advisory group. The
participants identified relevant activities on labour protection, environment and climate
action.
Georgia continues to approximate its public procurement legislation to the EU acquis and
has fulfilled the main requirements for Phase I of the Public Procurement Roadmap. In July,
the Parliament approved amendments based on which a new independent and impartial body
– in charge of appeals in connection with tendering procedures – is in the process of being
established as required by the DCFTA.
With regard to intellectual property rights (IPR) protection and the enforcement system,
Georgia has advanced its reforms in order to bring Georgian IP laws into line with the AA.
The national exhaustion regime concerning trademarks currently does not comply with the
provisions of the DCFTA. The National Intellectual Property Centre of Georgia Sakpatenti
continued its Geographical Indications registration activity. The revision of the legal
framework on the protection and quality control system of Geographical Indications in
compliance with EU legislation has been delayed.

4. Connectivity, energy, climate action, environment and civil protection

31
COMMISSION REGULATION (EU) 2020/1720, https://eur-lex.europa.eu/legal-
content/EN/TXT/PDF/?uri=CELEX:32020R1720&from=EN.
32
https://competition.ge/media/press-releases/139?fbclid=IwAR0QyMErGWfbuW93h6-
L5r9ILggibyB5iQQScRppbR5ZQWb8kZK6efsqWWg;
https://matsne.gov.ge/ka/document/view/4990278?publication=0
33
https://competition.ge/media/press-releases/139?fbclid=IwAR0QyMErGWfbuW93h6-
L5r9ILggibyB5iQQScRppbR5ZQWb8kZK6efsqWWg

14
On transport, the EU-Georgia Common Aviation Area Agreement entered into force on 2
August, ten years after its signature and provisional application. The reassessment of
Georgia’s seafarers’ education system by the European Maritime Safety Agency due to take
place in 2020 has been postponed until 2021. It remains important to continue strengthening
road safety. The construction of the Anaklia deep-sea port, which is part of the Indicative
TEN-T Investment Action Plan, was delayed following the termination of the contract with
the Anaklia Development Consortium (ADC).
As regards environmental protection, the Government approved the draft Law on
Environmental Liability in July and submitted it to the Parliament for adoption. The
Parliament adopted the Law on Ambient Quality Protection in May, which aims at aligning
Georgian legislation with the EU acquis on air quality. The Government is gradually
implementing the concept of Extended Producer Responsibility. Four technical regulations
for specific waste streams were adopted and are enforced since September. The construction
of EU-compliant sanitary landfills was delayed. In May, the new Forest Code of Georgia was
adopted, providing for a legal framework for sustainable forestry management.
With regard to climate action, Georgia is yet to adopt its long-term Low Greenhouse Gas
Emission Development Strategy (LEDS) and its updated nationally determined contribution
(NDC) as required under the Paris Agreement. Georgia’s institutional set up has been
enhanced with the creation of the Climate Change Council. Legislation on fluorinated gasses
was adopted but the Kigali Amendment to the Montreal Protocol is yet to be ratified.
In the area of energy, Georgia laid the basis for implementation of energy efficiency policies
with the adoption of the Energy Efficiency and the Energy Performance of Buildings Laws in
May. Following the adoption of the new Energy and Water Supply Law in 2019, the Ministry
of Economy and Sustainable Development continued to draft secondary energy sector
legislation necessary for the liberalisation of the market in line with the EU Third Energy
Package. In November 2020, the Energy Community Secretariat had estimated Georgia’s
overall level of implementation of the energy acquis at 36 %. This represents an increase of
11% when compared with 2019 data. The Government remained focused on promoting the
construction of new hydropower plants and expanding the electricity transmission network,
including across the Black Sea, to improve security of supply and facilitate the development
of wholesale power exchange and export.
Regarding civil protection, Georgia continues its efforts to cooperate more closely with the
Union Civil Protection Mechanism. On 14 August 2020, the host nation support activities in
the field of civil protection were approved by Governmental Decree.
5. Mobility and ‘people to people’
The Government is implementing a new education programme, but steps towards the stated
aim to increase state funding to 6% of GDP gradually by 2022 were hampered due to the
COVID-19 outbreak.
Georgia continues vocational education and training (VET) reform following adoption of the
VET law and progressive adoption of its by-laws. The gradual extension of VET in general
education is planned to continue countrywide during 2021. Introduction of short cycle
educational programmes by higher education institutions made good progress. Several
universities started to provide technical education and training programmes which are part of
the VET system.

15
2020 was a successful Erasmus+ year for Georgia with seven Capacity Building for Higher
Education (CBHE) projects, eleven Jean Monnet projects, 28 Erasmus Mundus Joint Master
Degree scholarships. In 2020, 2,888 International Credit Mobility scholarships were awarded
(1,193 for students and 1,965 for staff). With these numbers Georgia maintained its place in
the top 10 partner countries.
Georgia continued its active participation in the establishment of the Eastern Partnership
European School, which has seen the graduation of its first student cohort. In total 105
students have benefitted from EU scholarships so far. The Government has continued
working on the establishment of a fully-fledged secondary school for the second phase of the
European School project in Tbilisi.
In the field of culture, Georgia made progress in improving funding mechanisms and
methodology for cultural projects and activities. Georgia still lacked effective implementation
and monitoring of the Cultural Strategy as well as integrating cultural industries in the overall
economic portfolio.
In the field of sport, Georgia is involved in one of the successful Erasmus+ sport projects
selected. In addition, Georgia was involved for the third time in the European Week of Sport
Beyond Borders’ initiative.
Georgia continued approximating its legislation with the EU acquis on audio-visual media
services. In July, Georgia amended the legislation on Broadcasting and Electronic
Communications, which needs to be implemented in line with media pluralism, freedom of
speech and self-regulating principles of the media outlets. The Georgian National
Communications Commission was tasked with promoting, developing and monitoring media
literacy. The National Broadband Development Strategy, adopted in January, focuses on
connectivity, digital infrastructure and digital literacy and skills.
The Youth Agency is leading the development, implementation and coordination of Youth
Policy, as well as the reform of the overall youth sector in Georgia. It presented a 3-year
reform plan at the end of 2019 with the aim of creating a well-performing youth sector. The
National Youth Strategy 2025 is being drafted with extensive public and regional
consultation.
Still in the field of youth, 2020 was a successful Erasmus+ and European Solidarity Corps
year, with 30 participants from Georgia in support for policy reform, 1,875 participants in
mobility activities and 2 strategic partnerships projects involving organisations from Georgia.
Under the European Solidarity Corps, opportunities for 459 young people from Georgia have
been funded to take part in volunteering activities.
In the area of cooperation in research and innovation, Georgia continued the gradual
implementation of the recommendation of the Horizon 2020 policy support facility. These
focused on simplifying and unifying the grant scheme, restructuring and revitalising its
Research and Innovation Council, setting up a research and innovation system database,
prioritising/identifying promising research fields and encouraging collaborative research and
development.
The participation rate of Georgia in Horizon 2020 remained high. Up to 25 September 2020,
Georgian entities have participated 53 times in grants under Horizon 2020, receiving EUR
6.5 million of direct EU contributions.

16
Exploratory talks between the European Commission and the Georgian authorities on
Georgia’s association to Horizon Europe have been launched in November. Georgia has
completed the National Roadmap for its integration in the European Research Area (ERA-
GE), consolidating the steps necessary for reforming the Georgian science system and for
improving its competitiveness.

6. Financial assistance
In line with the AA and Government priorities, the 2017–2020 Single Support Framework34
focused on four main areas: economic development and market opportunities; strengthening
institutions and good governance; connectivity, energy, environment and climate change; and
mobility and ‘people to people’ contacts.
Implementation of the 2018 bilateral allocation continued, with a focus on the
implementation of the AA, Georgia’s increased participation in Erasmus+ and on improving
strategic communication. The Economic Governance and Fiscal Accountability Programme
is bringing the Georgian economic governance system closer to the EU model, while a
holistic programme on security, accountability and the fight against crime is contributing to
further strengthening good governance, the rule of law and the security of Georgian citizens.
Assistance under the bilateral allocation for 2019 focuses on the development and
implementation of a new human rights strategy, targeting in particular the rights of the child,
domestic violence and the inclusion of members of vulnerable groups/minorities. Through the
fourth phase of the European Neighbourhood Programme for Agriculture and Rural
Development (ENPARD), the EU supports the implementation of food safety regulations and
further promote rural development. The EU4 Integrated Territorial Development Programme
encourages a more balanced territorial development, establishing new centres of gravity in
the regions of Georgia. Additional measures have been included in these programmes to
further respond to the pressing needs arising from the COVID-19 pandemic.
As for 2020, the envisaged plans for the bilateral allocation were reviewed during April-May
and reprogrammed to respond directly to the COVID-19 crisis. A reprogramming exercise of
part of the 2019 envelope and of the 2020 envelope led to a comprehensive package of EUR
183 million of grants to support Georgia in these times of the COVID-19 crisis. The COVID-
19 Resilience Contract for Georgia and the accompanying Resilience Facility (amounting to
EUR 87.7 million) – which are part of the Team Europe response – contribute to mitigating
the health, social and economic impact of the COVID-19 pandemic. EU support will also
ensure the continuous implementation of EU related commitments, notably the AA/DCFTA,
with a particular focus on environmental protection and reform of the healthcare system, as
well as the VLAP (Visa Liberalisation Action Plan) requirements.
Additionally, Georgia benefits from the regional response package under the Team Europe
initiative for support to the economy in the Eastern Partnership region. These funds are
channelled through the Neighbourhood Investment Platform (NIP) and will provide access to
finance in local currency to local SMEs to help them survive the crisis.
Ongoing bilateral programmes are supporting inclusive economic development, justice and
public administration reform, VET and skills matching, policy reform in agriculture and rural
34
https://ec.europa.eu/neighbourhood-enlargement/sites/near/files/ssf_georgia.pdf

17
development, regional development and transport, food safety, energy efficiency and
infrastructure development and civil society.
Georgia also continues to benefit from regional programmes in the framework of
EU4Business, EU4Energy, EU4Environment, EU4ClimateChange, EU4Innovation,
EU4Youth, EU4Culture, EU4Dialogue and EU4Digital and in the area of transport. Georgia
is also actively participating in the neighbourhood Cross-border Cooperation Black Sea
Programme.
The EU has continued to help finance large infrastructure projects and initiatives in various
economic and social sectors in the framework of the Neighbourhood Investment Platform. In
this regard, blending operations are supporting energy efficiency in public buildings and
projects on hydropower plant rehabilitation, road transport along the TEN-T, solid waste,
water and sanitation, and local currency-lending.
Georgia also benefits from EU Macro-Financial Assistance (MFA). The MFA operation
launched in 2018 was completed with the disbursement of the last tranche in November 2020.
A new emergency COVID MFA has been put in place, as part of a wider package to ten
enlargement and neighbourhood partners, to help limit the economic fallout of the COVID-19
pandemic. EUR 150 million from this programme has been allocated to Georgia in the form
of loans on highly favourable terms to help cover immediate, urgent financing needs and to
support the balance of payment. Out of this amount, the first tranche of EUR 75 million was
disbursed in November 2020.
In addition, the payments under the different budget support programmes amounted to EUR
104.5 million in 2020 (out of which EUR 60 million under the COVID-19 Resilience
Contract). They contribute to the implementation of the Government actions to mitigate the
impact of the sanitary and socio-economic impact of the COVID-19 crisis.
7. Concluding remarks and future outlook
Georgia has remained committed to the implementation, obligations and undertakings of the
Association Agreement, despite COVID-19 related challenges. Alignment to the EU acquis
as well as to European standards in the area of human rights has broadly continued. The EU
stood by Georgia and made unprecedented and substantial efforts to support and help Georgia
deal with the COVID-19 sanitary and socio-economic crisis.
Looking ahead, a demonstrated reform commitment as regards democracy consolidation and
reform of the judiciary will be crucial to further advance on its European path.
Firstly, the revised electoral framework, agreed in an inter-party dialogue during the first half
of 2020, provided a sound basis for holding democratic elections and partially addressed
previous OSCE/ODIHR and Council of Europe/Venice Commission recommendations.
Nevertheless, despite overall competitive elections, a number of shortcomings have
undermined the trust in the process and the opposition parties have boycotted the early
proceedings of the new Parliament. This demonstrates the need for further democratic
consolidation, including by addressing the final recommendations of OSCE/ODIHR, through
an inclusive dialogue and ahead of the October 2021 local elections. In the short-term, an
inclusive political agreement between the majority and opposition is needed to enable work
in Parliament to advance the important reform agenda. More broadly, tackling the
polarisation in Georgian politics and media remains a challenge.

18
Secondly, implementation of the fourth wave of judicial reforms and in general upholding the
highest standards of ethics and integrity in the judiciary will remain essential throughout
2021. It will be important that the selection procedure for Supreme Court judges is brought
into line with European standards as soon as possible and that no further Supreme Court
judges are appointed on the basis of the current legal framework. Further reform of the High
Council of Justice will remain a priority. Setting up an ambitious anti-corruption agenda
could help regain momentum in the fight against corruption, notably high-level corruption.
It will also be important for Georgia to continue proactively addressing the continued high
number of unfounded asylum applications in close cooperation with the Commission and EU
Member States. Ensuring the effective and smooth implementation of the Law on the Rules
and Procedures for Georgian Citizens exiting and entering Georgia will be essential in this
regard.
Finally, it will be crucial to ensure an inclusive, green and sustainable recovery from the
COVID-19 crisis and to make further progress on digitalisation and digital literacy. Structural
reforms remain crucial as they make Georgia’s economy less vulnerable to external
developments, notably COVID-19, and enhance the investment climate and trade potential.

19