The third tranche of Euros 4.55 million released from the
European Union to support Public Finance Reforms in Georgia
Public Finance sector reform is one of the
major areas where the European Union provides assistance. Reforms in this
sector are crucial for efficient and transparent allocation of public finances
therefore contributing to eradicate poverty. The €4.55 million is a third
tranche being paid this year as part of the €15 million allocated to the state budget
for 2007-2009 for a programme that is intended to support Public Finance
reforms. The payment of each tranche is linked to Government's performance in
meeting set conditions in the area of strategic budgeting, accounting, treasury
reforms, improved external and internal audit function, public procurement and strengthening
the Revenue Service.
During the last few days of December 2009, the
European Union released the third payment of €4.55 million to Georgia’s budget
under the Financing Agreement signed in December 2007 between the European Union
and the Georgian Government. The assistance under this Financing Agreement amounts
to €15 million during 2007-2009 with additional €1 million for complementary technical
assistance. All of this assistance is intended to strengthen the Public Finance
reforms in Georgia.
tranche in the amount of €4.55 million was released on the basis of an assessment
that concluded that conditions were met substantially in all reform areas. The EU
will continue its support to Georgia
to foster further progress in planning and monitoring PFM reforms, including development
of External Audit, Improvement in public financial internal control systems and
internal audit and Improvement in Public Procurement.
The EU welcomes progress in many areas of public
finance reform, notably the adoption of the updated PFM sector Strategy and Action
plans, stronger and more effective cooperation and coordination with donors and
civil society and government's commitments to ensure compliance with
Sector Budget Support is a new way of
delivering aid in the area of public finance reform in Georgia. This instrument
provides for the existence of certain conditions (general as well as specific)
which have to be met by the government to allow for the transfer of funds. Each
year the EU assesses the progress achieved and compliance with set conditions and
releases the tranche in the amount that corresponds to the level of fulfilment
of sector reform conditions.
Conditions of this programme are related to a range of
issues relevant to the public finance sector including sector management, strategic
budgeting, treasury reforms, improved external and internal audit, public
procurement and strengthening the Revenue Services. Coordination of policy,
institutional and legislative reforms within these institutions and
participation of Georgian civil society and other donors is itself a major
product of the programme.
The release of the first €5 million and in February
2008 indicated that the government had met the initial requirement of the programme.
The 2nd tranche €4 million was
disbursed in December 2008.
In addition to
transferring funds to the state budget through Budget Support, the European Union
actively supports public finance sector through ongoing assistance projects for
the Ministry of Finance, Chamber of Control, State Procurement Agency and the