The European Bank for Reconstruction and Development (EBRD) and the European Union (EU) are stepping up their support for businesses in Georgia, Moldova and Ukraine. A new joint program will help local entrepreneurs to take full advantage of the opportunities offered by the Deep and Comprehensive Free Trade Area (DCFTA) between each country and the EU. The EBRD will provide €380 million in loans and trade guarantees to local partner banks and other financial institutions for on-lending to businesses, while the EU will make available €19 million for technical assistance, investment incentives and risk-sharing, IPN reports.
According to a press release of the EBRD, the establishment of a free trade area is part of the EU’s Association Agreements with Georgia, Moldova and Ukraine signed in 2014. It will offer local businesses access to the EU’s single market, the world’s largest, and help boost economic development and growth in the three countries. The signing marks the first phase of a planned €1.2 billion EBRD/EU program to which the EU is expected to provide €56.5 million in funding to help businesses invest in improvements of product quality and service standards. This, in turn, will prepare them for the DCFTA and create an environment conducive to cross-border trade, job creation and economic growth in the three countries.
“This is truly a game-changing initiative to everyone’s benefit: it will make local businesses more competitive while consumers will be offered more advanced, better quality products and services,” said Alain Pilloux, EBRD’s Acting Vice-President Policy and Partnerships.
Katarina Mathernova, the European Commission’s Deputy Director General, Neighborhood and Enlargement Negotiations, said the small and medium-size companies are the engine of the local economy and this facility will help them take full advantage of the opportunities offered by the establishment of a free trade area with the EU, thus contributing to overall economic growth in the partner countries.
The EU has also provided €42 million to the EBRD’s Advice for Small Business to boost entrepreneurs’ know-how to grow their business in the Eastern Neighborhood region since 2011. Both programs are part of the EU4Business initiative, which supports the EU’s projects to back small and medium-sized enterprises in Eastern Partnership countries.
