Georgia’s European Choice European External Action Service
Catherine Ashton and Prime Minister Ivanishvili

At the upcoming Eastern Partnership Summit in Vilnius, Georgia is expected to initial the Association Agreement (including a Deep and Comprehensive Free Trade Agreement) with the European Union. This will come as recognition of Georgia’s efforts over the last decade to reform politically and economically, and – it is hoped – will ensure prosperity and reinforce a pluralist democracy in Georgia.

While the former Soviet republic does not share a border with the EU, its strategic importance stems from the country’s geographical position at the crossroads between Western Asia and Europe. Under former president Mikheil Saakashvili Georgia has had a clear pro-Western stance, and traditionally Georgia has been the most pro-Western state in the South Caucasus. Nevertheless, with a new president in power as of October 2013 and a prime minister determined to mend relations with Russia, will Georgia remain firm on its European choice? 

Capital: Tbilisi

Population: 4.5 million

Ethnic groups: Georgian 83.8%, Azeri 6.5%, Armenian 5.7%, Russian 1.5% other 2.5%

Official language: Georgian; Abkhaz is the official language in Abkhazia

Form of government: presidential republic (although amendments to the Constitution are to enter into force following the 2013 presidential election, transforming the country into a mixed parliamentary republic, shifting power from the president to the prime minister)

Political Situation

A former Soviet republic, Georgia gained its independence in 1991. Following the restoration of independence, nationalist leader Zviad Gamsakhurdia was elected president. His regime was swiftly overthrown by opposition militias and Eduard Shevardnadze, a former Soviet minister, assumed power. Shevardnadze’s regime was marked by poverty and corruption and was brought to an end following peaceful mass demonstrations in November 2003. The Rose Revolution of 2003, as the protest came to be known as, concluded with the election of Mikheil Saakashvili as president. From the onset Saakashvili positioned himself as a strong pro-Westerner and sought to forge close ties with the US and the European Union.

Under Saakashvili Georgia saw a souring of its relations with Russia, which led to higher energy prices for Georgia, a plethora of restrictions on Georgian imports and mounting political friction. Tension culminated with the August 2008 war in the separatist regions of South Ossetia and Abkhazia. The two regions, located in the north of the country, remain outside the control of Tbilisi but have so far gained very limited international recognition. Russian military presence is maintained in the two regions, and the Russian troops have proceeded to building fences and barricades along the borders of the breakaway territories – which the Georgian government has called a process of borderisation .

A hero of the Rose Revolution, Saakashvili embarked Georgia on the road to democratic reform and economic development. Despite enjoying wide popular support while in office, his record remains far from perfect, with critics lamenting his authoritarian leadership style. The October 2013 presidential election, proudly described by Georgian PM Bidzina Ivanishvili as Georgia’s first European election, marked the end of Saakashvili’s two-term presidential mandate (according to the Georgian constitution, one can only serve as president for two terms). His successor, Giorgi Margvelashvili is committed to supporting Georgia’s bid for NATO and EU membership, whilst also seeking to improve relations with Russia. 

Economic situation

The strained relationship with Russia has taken its toll on the economy of Georgia, leaving Azerbaijan and Turkey as the country’s main trade partners. Agriculture, most notably wine-making, is a key sector of the economy. Other industries include steel, machine tools, electrical appliances and mining. In terms of energy supply, Georgia has a great hydropower capacity, which currently covers most of the country’s energy needs. Georgia has a GDP of $15.83 billion ranking as a lower middle income country.

Strong exports, tourism and high levels of public investment ensured the economic recovery of the country in the aftermath of the global economic crisis in 2008 – 2009. The reforms of former president Saakashvili have led to significant economic growth, but the country remains heavily dependent on imports to meet its oil and gas needs. Georgia’s ruling coalition, the Georgian Dream, is pursuing a normalisation of relations with Russia, with some positive developments already taking place. This year has seen an increase in the flux of Russian tourists visiting Georgia, and the ban on imports of wine and mineral waters imposed by Russia since 2006 was lifted after seven years.

Relations with Russia

While Georgia and Russia have no formal diplomatic ties, relations between the two states have witnessed some improvement under the Georgian Dream coalition government. Georgia remains firm on its position regarding territorial integrity, but some economic co-operation with Russia has been achieved, and in August 2013 bus, car and truck traffic between Russia and Georgia was re-opened.

Notwithstanding the territorial dispute, it appears increasingly possible that Russia could become a business partner for Georgia. A more comprehensive union of the type advocated by Russia through its Customs Union project remains unlikely as Georgia’s neighbour exerts little cultural, civilizational and social attraction. Public support for the EU remains strong, but that is not to say that some regions – especially the impoverished rural areas –could not switch sides if Russia puts forward a convincing deal.

Relations with the EU

The institutional and legal framework of relations between Georgia and the EU is set out by the Partnership and Cooperation Agreement, signed in 1996 and still in force to date. In 2004 Georgia was included in EU’s European Neighbourhood Policy (ENP) and an EU-Georgia ENP Action Plan was subsequently developed. In 2009 Georgia was one of the six countries of the Eastern Partnership, with negotiations on an EU-Georgia Association Agreement starting in 2010. Under the European Neighbourhood and Partnership Instrument (ENPI) the EU allocated for Georgia between 2007 and 2010 a total budget of €117.4 million, and for the period 2011 – 2013 a total budget of €180.7 million. An additional budget of 22 million was made available under the Eastern Partnership Integration and Cooperation Programme. During the five-day war in August 2008, the EU played a key role in the mediation of the conflict between Russia and Georgia, allocating some €500 million for post-war reconstruction.

The EU hopes that its economic assistance and political partnership with Georgia will help the country become a stable and reliable partner for Europe, with strong democratic institutions and a genuine commitment to shared values such as rule of law, human rights, and an independent judiciary. Considerable progress has already been achieved by Georgia in terms of democratisation, combating corruption and economic development, but the EU is keen to see further progress in areas such as poverty reduction, employment and social policies, agricultural development, criminal justice and civil society.

The EU has commended Georgia’s pace of reform and its commitment to European cooperation and integration, and a recent European Parliament resolution recognises ‘the remarkable progress achieved by Georgia in the modernisation of the country and in meeting the requirements of the Association Agreement ’. Georgia’s path to modernisation is not without its difficulties, and the same EP resolution goes on to raise concerns over a serious backsliding in the application of democratic standards and independence of the judiciary. At the same time, as the initialling of the Association Agreement with the EU becomes imminent, pressure from Russia is likely to grow. 

The Georgian public remains overwhelmingly pro-European, but for this support to remain strong in the long-term the agreements with the EU need to be successfully implemented and to deliver on their economic promises. It is telling that the rate of support for EU membership among Georgians stands at 67%, but when asked to name Georgia’s top 5 partners, Georgians placed the EU on the fifth place behind the US, Russia, Azerbaijan and Ukraine EU’s cultural and normative appeal needs to be matched by concrete, economic benefits.

For now the political elite remains committed to Georgia’s European choice and European policy-makers should build on the momentum created by the Vilnius summit to praise the progress already achieved by Georgia, continue to support political reform in Georgia and help the country reap the benefits of the Association Agreement and the DCFTA. From Tbilisi the Eastern Partnership Summit in Vilnius is seen as a moment of fundamental importance which, in the words of President Margvelashvili, will lay the groundwork ‘for the Georgian status of a European family member’.

Further readings

European Union External Action, Summary on EU-Georgia Relations.
EuropeAID - Country Cooperation: Georgia.
BBC country profile - Georgia.
CIA The World Factbook - Georgia.
Molly Corso, Georgia: Tbilisi Bracing for Russian Pressure, 15 October 2013.
Katya Soldak, Georgia’s Politics Shoots its Economy in the Foot.
Peter, Pomerantsev, The Polyphonic President, 1 November 2013.

Edited by: Lisa Enocsson
Photo Credits:
European External Action Service via Flickr