Georgia initials EU pact

By bne IntelliNews November 29, 2013

bne -

Georgian ministers initialed an Association Agreement with the European Union on at the Vilnius summit on November 28. Officials confirmed that Tbilisi plans to have the agreement signed by September 2014, despite decisions by other former Soviet states to backtrack on similar agreements under pressure from Moscow.

The Association Agreement, which includes a Deep and Comprehensive Free Trade Treaty (DCFTA), with the EU was technically initialed by Georgian Foreign Minister Maia Panjikidze and Economy Minister Giorgi Kvirikashvili. The document is due to be formally initialed at a ceremony in Vilnius on November 29.

"We are taking a step which will bring us closer to the EU and ensure irreversibility of our European course," said Georgia's newly elected President Giorgi Margvelashvili, according to Civil Georgia. Georgia, widely regarded as a champion reformer, still has to take steps to bring its legislation, justice system and economy into line with EU norms, but Georgian officials say they are hopeful the agreement could be signed as early as next September.

Moldova also initialed an Association Agreement with the EU, but four other Eastern Partnership countries - Armenia, Azerbaijan, Belarus, and Ukraine - are not expected to do so. In the run-up to the Vilnius Summit, both Armenia and Ukraine bowed to pressure from Moscow and backed away from greater integration from the EU.

Armenia's President Serzh Sargsyan is attending the summit, but is no longer expected to sign an Association Agreement after announcing on September 3 that Armenia will join the Russian-led Customs Union. That decision came after Russia raised gas prices for the country; they have since been slashed again. Ukraine says signing the pact with the EU would cost $20bn per year.

Illustrating the contrast in approaches however, Valeriu Lazar, Moldova's economy minister, said that his government understands that modernizing "can only be achieved by accepting European rules of the game," reports the Kyiv Post. Georgian Deputy Prime Minister and Economy Minister Giorgi Kvilikashvili, said that even the declaration of intention to sign an agreement with Europe caused a surge of interest from investors.

Armenia and the EU will, however, adopt a joint declaration on Armenian reforms and its continuing cooperation with the EU, Armenia's deputy parliament speaker, Edward Sharmazanov said, following a meeting of the ruling Republican Party of Armenia's executive body, Public Radio of Armenia reported.

Tbilisi, which has taken rapid steps towards mending relations with Russia since Bidzina Ivanishvili's Geprgian Dream coalition took power in October 2012, largely escaped the sort of pressure that Russia has put on other states. In fact, while Russians have had to do without Moldovan wine in recent months - as well as Ukrainian chocolates and steel - thanks to blocked imports, they have had the better known Georgian vintages to fall back on at last.

In the build up to the short 2008 war between the pair, Moscow banned Georgian wine and water from its market. However, with the Georgian Dream government acting on its announced intentions to deepen relations with both Brussels and Moscow, those restrictions were lifted earlier this year.

At the same time, Moscow is likely to be encouraged by its success in blowing Ukraine off a westwards course, even if Kyiv will probably now also backtrack from any move to join the Customs Union. That suggests Georgian exports to Russia could come under pressure once again ahead of any final signing of the EU pact.

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