Georgia

The projects that have now been stopped involve funding for the development of a green hydrogen sector in Georgia, the modernisation of water infrastructure in Batumi, and the expansion of energy networks.

A large proportion of Germany's development cooperation portfolio with Georgia was aimed at fostering the country's efforts for EU integration, an endeavour that has also been laid down in Georgia's constitution. The Georgian government has de facto stopped pursuing this course. Simultaneously, the efforts to stop the mass protests against the government's policies have involved systematic violations of human rights.

That is why the German Development Ministry had already decided on 3 December that it would not commit or commission any new projects under Georgian-German development cooperation, and that it would subject the entire portfolio of cooperation with the Georgian government to a review. The first result of this review is the decision to stop the aforementioned projects with a total volume of 237 million euros. The review of further current projects is still under way.

However, the Development Ministry intends to continue projects where the benefit for the people, the majority of whom are pro-European, outweighs negative aspects and where such projects are still able to foster progress on moving closer to Europe even under the current circumstances. When the so-called “Transparency of Foreign Influence Law” was adopted in mid-2024, Germany had already launched additional support programmes for civil society organisations. The programmes include legal advice, training on cybersecurity, and psychosocial support.

Development Minister Schulze has called on the Georgian government to stop the violence against the people and to return to the path of EU integration enshrined in the constitution.

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Current situation

Just under a year ago, the Georgian government began to depart from the course of EU and NATO rapprochement that it had been pursuing. Since then, it has enacted several laws that are incompatible with the EU’s canon of rights and values, for example a so-called Transparency Law, or a law on family values, which discriminates against LGBTIQ+ persons. In the parliamentary elections held in October 2024, the ruling Georgian Dream party was able to win a majority, but observers found major irregularities in the election process. On 28 November 2024, Prime Minister Irakli Kobakhidze announced that EU membership talks would be suspended until 2028, triggering pro-European mass protests.

In the past two decades, the Georgian government had undertaken major efforts to consolidate democracy and the rule of law, achieve alignment with European legal standards, fight corruption and create a more conducive climate for investment. For a long time, Georgia was thus considered a “reform leader” among the former Soviet republics in the Caucasus. In recent years, however, political disputes between the government and the opposition had slowed the country's development, with important processes becoming bogged down. Yet there is still huge need for reform. Large sections of the Georgian population continue to suffer under poverty and unemployment.

Russia's war of aggression against Ukraine has had major impacts on Georgia, too. Russia is an important market for Georgian products. Moreover, remittances from migrant workers account for a significant proportion of Georgia's gross domestic product. The territorial conflict over Abkhazia and South Ossetia continues to be unresolved. The two breakaway regions are striving to achieve independence from Georgia, and are being supported by Russia in this endeavour. Since the war between Russia and Georgia in 2008 and the beginning of the presence of Russian troops in Abkhazia and South Ossetia, which continues to this day, Georgia and Russia have not had diplomatic relations.

Until recently, Georgia was seeking to build closer relations with Western nations. In 2016, an Association Agreement entered into force between Georgia and the EU, aimed at bringing the country closer to the EU in political and economic terms. In March 2022, Georgia – just like Ukraine and Moldova – applied for EU membership. In December 2023, Georgia was officially accepted as an EU accession candidate. The EU has stopped the accession process for the time being, following the adoption of the so-called Transparency Law in May 2024. Georgia also wants to achieve NATO membership. Like EU accession, that goal is also enshrined in the country’s constitution. The majority of the Georgian population, unlike the Georgian government, continues to support these goals.

Strategy for development cooperation with transformation partners in South-Eastern and Eastern Europe and the Southern Caucasus

File type PDF | Date of status 12/2023 | File size 719 KB, Pages 9 Pages | Accessibility Accessible

Download File type pdf Date of status 12/2023 File size 719 KB Pages 9 Accessibility Accessible

The Federal Ministry for Economic Cooperation and Development (BMZ) has assisted Georgia since 1992 in its transition to a social market system, the rule of law and democracy. Previously, cooperation was based on Germany working with the three countries of the South Caucasus region – Georgia, Armenia and Azerbaijan – as a group. As part of the BMZ 2030 reform process, Georgia became a partner for bilateral cooperation and has since been one of the “transformation partners” for German development cooperation in the European Union's eastern neighbourhood.

In the light of recent political events in Georgia, Germany’s development cooperation with Georgia is currently under review (as at December 2024).

At the government negotiations in November 2021, the BMZ confirmed that it would continue to support Georgia's course of reform and of moving closer to the EU. The German side also underlined the need to make further progress on reforming the justice system, protecting the rights of minorities and achieving reconciliation within society.

So far, cooperation between Germany and Georgia has focused on the following core areas:

• Sustainable economic development, training and employment
  Areas of intervention: technical and vocational education and training, private sector and financial sector development
• Climate and energy, just transition
  Areas of intervention: renewable energy and energy efficiency, sustainable urban development

The BMZ also assists Georgia in the field of good governance, for example with regard to reforming public financial management and supporting processes to foster civic participation. Thanks to the establishment of 35 citizens' offices and the introduction of electronic data management and processing systems in 63 municipalities, up to 85 per cent of the population now benefit from improved public services.

Regional cooperation, too, continues to play an important role. It takes place between the six countries covered by the European Union's Eastern Partnership (External link), focusing on transboundary issues such as trade and digital technology.