Brussels - The European Union should grant Armenia and Georgia almost 150 million euros (224 million dollars) in loans and handouts to prop their economies up in the midst of the current crisis, the EU's executive said Friday. The European Commission has proposed an EU loan of 65 million euros and a further grant of 35 million euros to Armenia to help the country keep hold of an 800-million-dollar loan package from the International Monetary Fund (IMF), a commission statement said.
Armenia has been hard hit by the world economic crisis, with its economy expected to shrink by 15.6 per cent this year. The commission proposal foresees two transfers at the beginning and end of 2010.
Separately, the commission has proposed a 46-million-euro grant to Georgia as part of a package of aid designed to put the country back on its feet following its war with Russia in August 2008. The money would be paid at the end of this year and the first half of 2010.
Overall, the EU is expected to give and loan Georgia up to half a billion euros to help its economic recovery.
Both financial actions would be conditional on the two countries fulfilling the terms of their respective deals with the IMF. The EU's 27 member states would have to approve the transactions.
The EU is keen to improve ties with the states of the South Caucasus. In May it launched an "Eastern Partnership" with Armenia, Azerbaijan, Belarus, Georgia, Moldova and Ukraine aimed at improving their democratic credentials and rule of law in return for trade and aid from the EU.
