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Tbilisi digs debt hole2010-07-14 15:51
It is understood in the West that Saakashvili regime is doomed: it's getting hard to save it and only political steps are not enough here, which is evident. But if things are really so shaky why do financial inflows in Georgia continue? Because it's a guarantee to have Tbilisi by the throat. Whoever comes to replace the current president - and no Georgian president resigned peacefully - the state will retain its monetary debt. Despite weakness of political influence the financial bridle is the best guarantee of obedience.
Over recent years Georgia's external debt has grown catastrophically, which accordingly indicates how this debt will be serviced. In just a few years one fifth of the budget will be used for repayment of debt incurred by the authorities. Then the so-called pyramid principle will come into play: a new debt will be needed to cover the old one - taking the country deeper into the financial and economic bog.
Within the next few days Catherine Ashton, EU High Representative for foreign affairs and security policy will pay a visit to Georgia. It is believed in EU political circles that the visit will herald the start of EU-Georgia talks on Association Agreement. Directives on preplanned talks with Armenia, Azerbaijan and Georgia were approved in the EU on March 10 2010.
Remarkably, the document stipulates relations between EU countries and a membership candidate at the so-called preparatory stage that may last, depending on the circumstances, for 12-15 years. The document is almost standard. Nonetheless, each agreement is unique and determines specific issues given peculiar features of a country's relations with the European Union, its priorities and the sphere of mutual interests. The treaty stipulates cooperation between the parties on a wide range of issues, mainly economic. The core of the association is free movement of goods, persons, services and capitals. In addition to economic provisions the Association Agreement suggests political dialogue between the parties and determines the association's organization structure.
Georgian leaders repeatedly declared intention to accede to the EU but no specific documents that would guarantee the start of negotiation process have been signed on the issue. Most probably, none will be - at least until the conflict with two states, South Ossetia and Abkhazia, is settled.
Certainly, two independent republics have never been the cause of the conflicts. As Professor Preobrazhensky said: "Ruin is not there, it's something that starts in people's heads". This is where the intrigue begins.
The EU starts to realize the risk of losing influence in South Caucasus evidenced at a recent discussion in Berlin on "New orientation of EU's policies in Eastern Europe" where it was stated that South Caucasus exemplifies the fact how little attention the European Union pays in its foreign policy to ex USSR states. "Germany must undertake the role of a EU advocate in South Caucasus, and the EU states must jointly work out an efficient set of instruments for peaceful settlement of frozen conflicts in this region. South Caucasus is in the outskirts of EU's policies despite the past and present-day conflicts which represent a threat to the EU's security and stability", - an expert emphasized.