The Eastern Partnership: What’s next for Georgia?

Georgia’s European and Euro-Atlantic integration process began in the early 1990s. Its decision to pursue western institutions has paid concrete dividends over the years. Today, Georgia enjoys the benefits of the EU Association Agreement (AA), as well as the Deep and Comprehensive Free Trade Area (DCFTA). Additionally, Georgian citizens can now travel to the EU and Schengen zone visa-free. However, a few pressing questions remain unanswered: What further steps can Georgia take in the process of Euro-Atlantic integration and when, if at all, will Georgia be offered membership in the EU? Today, the EU door is neither open nor closed for Georgia. The preamble of the Association Agreement between the parties labels Georgia an Eastern European country avoiding any possible reference to article 49 of the Treaty Establishing the European Union (TEU) stating that “Any European State which respects the principles set out in Article 6 (1) may apply to become a member of the Union”. Even though the Eastern Partnership and the Association Agreement do not explicitly mention Georgia’s EU membership prospects, Georgia’s Foreign Policy Strategy of 2019-2022 states it as a foreign policy goal.  

EU-Georgia relations have gradually evolved over the years. Georgia’s relationship with the EU began with the Partnership and Cooperation Agreement (PCA) signed in 1996. This agreement entered into force in 1999. This was followed in 2014 by the EU Association Agreement (AA), which includes the Deep and Comprehensive Free Trade Area. Ten years after launching the Eastern Partnership (EaP), Georgia is its frontrunner. The political and economic ties continue to strengthen, and ordinary Georgia citizens can now travel to the EU’s Schengen zone without visas. The commitments envisaged by the AA and the Visa Liberalization Action Plan (VLAP) became influential factors in Georgia carrying out several reforms in promoting democracy, strengthening the rule of law, anti-corruption, food safety, border management, travel document security, anti-discrimination, and personal data protection. However, despite several impressive reforms, a lack of judicial independence and low public trust in Georgia’s court system[3] remains a vexing problem. Georgia’s court system is often subject to interference from the executive and legislative branches[4]. As such, reforming the judicial system will not only require strict conditionality from the EU[5], it will also require a clear vision and the genuine will of the Georgian government – both of which, have been absent thus far.

Georgia’s Achievements and Tangible Benefits on the Path Towards the EU

The five years that have elapsed since Georgia signed the Association Agreement with the EU provides a sufficient timeframe for evaluating the short-term benefits that the agreement was expected to deliver. Together with the VLAP, the AA remains the main driving force for reforms, regulation, and standard-setting in a country that has staunchly pursued a policy of deregulation since 2006. The AA includes an important trade component, with the establishment of a Deep and Comprehensive Free Trade Area between Georgia and the EU. However, the AA/DCFTA, which provisionally entered into force in 2014 and fully in 2016, has not yet succeeded in delivering significant and tangible benefits to the Georgian population at large.

In one and the half-year following the introduction of the visa-free regime, 291,943 Georgian nationals traveled to the Schengen area without a visa.^[6] However, this is arguably a small sliver of the population. According to a survey conducted in April of 2019, beginning in the spring of 2017, 90% of Georgia’s population never traveled to any EU or Schengen country, while only 5% travelled once and only 3% travelled multiple times[7].

The Eastern Partnership also assisted Georgia’s higher education institutions by setting up ties with partners from the EU. Georgia is the second-largest beneficiary of the EaP’s international credit mobility regional budget, receiving 25% of the total budget between 2015-2018.^[8] 3,613 Georgian citizens were granted Erasmus Mobility Scholarships during this three-year period. In the last two years, 26 scientific organizations from Georgia were involved in 21 international research projects and received €2.2 million to carry out scientific activities.^[9]Since signing the Association Agreement including the DCFTA, there has been a significant increase in trade with the European Union. Georgian exports to the EU grew from $624 million in 2014 to $730 million in 2018[10]. However, the increased trade did not have a positive impact on the export of Georgian agro-food products to the EU. On the contrary, the export of agro-food products to the EU went from €187 million in 2015 to a paltry €116 million in 2018[11]. This is mainly due to the fact that Georgian agricultural products (particularly those of animal origin) often do not meet EU standards. In fact, Georgia can export only four types of animal products to the EU – leather, wool, honey, and fish. Unfortunately, the export volume of these products is insignificant. To ensure that the export of Georgian agricultural products (of animal origin) to the EU increases and the DCFTA brings tangible benefits to the producers, Georgian businesses will need to meet EU standards. This will require the acquisition of specific knowledge and increased investment in this sector.

Overall, the Eastern Partnership program has reached a point at which it is not as effective as Georgia, Ukraine and Moldova wish. It urgently requires deep and comprehensive reform, internal diversification and a tailor-made approach to respond to the ambitions of EaP front-runner countries. Otherwise, there is a risk that the EaP countries could lose their enthusiasm and the EU’s ability to promote the democratization process within the Eastern Neighborhood may weaken. The EU might consider maintaining the EaP format. However, there is a need for internal restructuring, providing more incentives to the EaP states that are keen on moving closer to the EU, together with setting up an institutional mechanism of cooperation. In order to ensure that Georgian farmers receive the benefits of the DCFTA, the EU and Georgia must work together to accelerate land reform to ensure that land plots are not fragmented and unregistered and that small and medium businesses have better access to available financial products. The EU must also be stricter in its conditionality and institute the ‘less for less’ principle when and if a partner country fails to deliver on its commitments.

Challenges that Remain on Georgia’ Path to the European Union

Despite Georgia’s gradual move closer to the European Union, longstanding barriers impeding further integration remain: problems related to the rule of law, the lack of an independent judiciary, high-level corruption and social hardship, all continue to hinder further integration, and in some cases, these problems have become even more acute.

While the Georgian government has been effective when it comes to fighting low-level corruption (in some international indexes Georgia performs better than a few EU member states), high-level corruption remains a serious problem and must be addressed. Georgian civil society organizations have been vocal on this issue and have called on the government to investigate. This issue was highlighted in the European Parliament’s report on the implementation of the EU Association Agreement with Georgia adopted in October of 2018[12]. The document acknowledges Georgia’s success in fighting low and mid-level corruption but stresses that high-level elite corruption remains a serious issue. As such, the Georgian government must first recognize the existence of this kind of corruption and then must find a solution to it. One option would be to set up an independent investigative body for high-level corruption cases.

Another challenge Georgia faces is the lack of independence within its judicial system. The Georgian government has implemented several waves of judiciary reform, but grave shortcomings within the system remain. This fact has been highlighted by Georgian civil society, the international community, as well as Georgia’s close international partners. In its Association Agreement implementation report of 2018, the EU placed a particular emphasis on the importance of transparency and accountability in the process of appointing judges[13]. In its 2018 Human Rights Report, the US State Department stressed that judges remain vulnerable to political influence from both inside and outside of Georgia’s judicial system. The report also shed light on the “strengthening of an influential group of judges primarily consisting of High Council of Justice members and court chairs that allegedly stifled critical opinions within the judiciary and obstructed proposals to strengthen judicial independence.”[14]

In addition to the shortcomings linked to democratization, Georgia also faces acute social vulnerability. Georgia remains a poor country with a high level of unemployment[15]. For comparison, the GDP per capita of Georgia is two times less than that of Bulgaria, the poorest country of the European Union. Unemployment in Georgia remains high and this unemployment is particularly acute among Georgian youth[16]. In fact,  every third person between the ages of 15-24 in Georgia is unemployed. This high level of unemployment results in the labor force leaving the country in search of jobs in places like Turkey or the EU. It also increases the number of asylum-seekers seeking economic relief in EU member states. The number of Georgia asylum seekers in the EU and Schengen countries increased from 8,835 in 2016[17] to 17,980 in 2018[18]. Further, many households in Georgia’s rural regions depend almost entirely on overseas remittances sent back by family members working as labor migrants abroad. In fact, remittances reached a record high in 2018 ($2 billion) comprising 12.5% of the country’s total GDP. Since 2015, those living below the extreme poverty line ($1.90 / day) increased from 3.6 to 5% in 2017[19]. Therefore, the Georgian government must re-think their current economic policies. One option would be to place an emphasis on promoting small and medium business and ensuring that they have better access to financial products.

Despite the fact that the European Union allocates overs €120 million to Georgia annually (€32 per capita annually) to promote reforms in the field of public administration, support agriculture and justice reform, 41% of the population still wants to see the European Union play a greater role in healthcare, education, and unemployment.[20]This might be due to the fact that ordinary citizens either know less about the support that the EU provides and/or they have not benefited from it. This could also be due to ineffective policy planning and implementation by the Georgian government. For example, according to the Food and Agriculture Organization (FAO) of the United Nations, agriculture still accounts for about 52% of the country’s labor force, while 98% of farmworkers are considered self-employed. The sector is high on the government agenda and the European Union has spent significant amounts of money through the European Neighbourhood Programme for Agriculture and Rural Development (ENPARD) in an effort to help develop the sector. The total budget for ENPARD in Georgia covering the period of 2013-2022 is €179.5 million[21]. Despite this, the share of agriculture of the country’s GDP decreased annually from 8.1% in 2013 to 6.6% in 2018. In addition, the share of agribusiness in the output of the total economy has been decreasing – from 17.7% in 2013 to 14.8% in 2018[22]. While the DCFTA provides Georgian producers access to more than 500 million consumers in the EU, Georgian agricultural products (especially animal-based products) still do not meet the strict food safety standards of the EU and, as a consequence, the export of agricultural products to the EU decreased from €187 million in 2015 to €116 million in 2018, with minimal diversification of trade. Therefore, Georgia and the European Union need to reassess the effectiveness of EU support and correct some of the shortcomings, including but not limited to introducing more articulate benchmarks and more measurable indicators

Limit of Eastern Partnership and the Way Ahead

Ten years after the EaP was established, it seems that neither the European Union nor Georgia has well-articulated ideas to further strengthen Georgia-EU ties (aside from the ongoing implementation of Association Agreement) or any plans to enlarge the European Union to its eastern flank. The EU and Georgia need to agree on a clear vision of where they see their relationship by 2030 and what the benefits of EU rapprochement would look like for the ordinary Georgian citizen. In March of 2017, the European Commission published a white paper on the future of the European Union. The document defines the future development of the European Union covering the period through 2030. However, it does not envisage any accession prospects to the countries of the Eastern Neighbourhood. The European Commission is reluctant to start accession negotiations with candidate countries from the Western Balkans – Albania and Northern Macedonia. This news does not do much to encourage Georgia and other frontrunners of Eastern Partnership to push for membership. However, as the President of Georgia Salome Zurabishvili put it, “the time has come to set a new course in our relations, after a successful decade of partnership”.[23] The president also offered EU leaders and heads of EU member states the out-of-the-box solution of starting accession negotiations on an “ad hoc” basis. However, the ambitions of the Georgian government to join the EU and the lack of appetite in the European Union to enlarge presents a clear mismatch of priorities. Additionally, the Georgian government must work harder to demonstrate clear progress when it comes to the implementation of the Association Agreement – particularly as it relates to the country’s judiciary, its fight against high-level corruption and a number of social issues. This not only entails the alignment of Georgian legislation with that of the European Union and setting up new institutions, but it also means ensuring that the adopted laws are properly implemented. The Georgian government should concentrate more on the long-term policy planning process and carry out a more detailed cost-benefit analysis.   

Since EU membership is not on the table, the EU and Georgia might consider launching the accession process without calling it accession but rather applying it to those instruments that are available in the accession toolkit. One of the elements that could be offered to the frontrunners of the EaP is setting up a summit with the participation of leaders from Georgia, Ukraine, Moldova, and the EU. Inviting representatives of countries with observer status at the council and EU member states to participate in working group meetings might also pay dividends. This could provide credibility to those countries which have the AA, and might be seen as a clear political signal to those three countries. The EU can also apply to the same methodology that it uses vis-à-vis accession countries. This means producing the comprehensive annual assessment reports in the same style as it does in case of Western Balkan states. The EU should apply stricter conditionality vis-à-vis Georgia to keep the country on track to ensure that Georgia delivers on its obligations. This would also be linked to the financial support and the ‘less for less’ (less money in case there is no clear progress) principle.

Additionally, the EU and Georgia can also begin the preemptive legal screening procedure, which will help the Georgian government become familiarized with EU legislation (this could be done in parallel with the EUAA implementation process), identify the gaps and establish action plans for each chapter addressing the compatibility and alignment process with the EU’s national legislation. This could help address the EaP countries EU ambitions and will waste less time while the current appetite to expand the EU remains low. The EU should also invest more in large infrastructure projects like energy security and diversification, railway and land transport safety, as well as enhanced connectivity, public service, environmental protection, and water management. More progress should be visible when it comes to harmonizing roaming pricing and reducing roaming tariffs among the partner countries. Taking into consideration the increased volume of remittances between EU member states and Georgia, parties should evaluate the possibility of Georgia joining the Single Euro Payment Area (SEPA). This runs in lockstep with the proposal made by the Polish Minister of Foreign Affairs, whose opinion is that EU and EaP countries having the AA in place should enjoy closer cooperation and that sectoral cooperation should be strengthened in the areas of the environment, chemical safety, energy security, and digital and financial markets.[24]

All of this should be done in parallel with the implementation of the commitments of the AA/DCFTA and the harmonization of Georgian and EU legislation. These harmonized laws should not just remain on paper. On the contrary, they must have a functioning implementation mechanism in conjunction with strong, independent state institutions. One of the key challenges that Georgia has faced since its independence is the rule of law and the lack of an independent judiciary. Georgia’s Europeanization process is not irreversible and Georgian civil society and the European Union are natural allies in the effort to hold the government more accountable. This can be achieved through closely monitoring the implementation of the commitments derived from the AA/DCFTA and not turning a blind eye to the shortcomings for the sake of the EaP needing Georgia as a success story. Considering that the EU-Georgia Association Agenda expires at the end of 2020 and both parties are supposed to start negotiations on a new document soon, the EU might ensure that concrete and measurable indicators and clear benchmarks are introduced in the Association Agenda and make sure that the EU is stricter when it comes to the ‘more for more’ policy approach.