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The News in Brief

Tuesday, December 9
Eka Tkeshelashvili and Data Akhalaia may be appointed to Ukraine’s government

Former State Minister for Reintegration of Georgia Eka Tkeshelashvili and former Head of the Constitutional Security Department of the Ministry of Internal Affairs of Georgia, Data Akhalaia may be appointed in Ukraine’s Government.

According to a Frontnews source, Eka Tkeshelashvili may be appointed as Deputy Justice Minister of Ukraine; as for Data Akhalaia, he may be appointed in Ukraine’s one of the law enforcement agencies.

Data Akhalaia was placed on Interpol's wanted list several months ago.

Parliament plans to approve budget for 2015 next week

Parliament is planning to approve the budget for the year of 2015 next week. The date of discussing the final version will be decided today, during a government session.

The final corrected version was presented to the parliament at the end of November and it will be discussed at the session. Despite the legislators are allowed not to approve it till the third Friday of December, they still plan to make the corresponding decision next week.

According to the 2015 budget project, the income in 9 billion and 875 million GEL and taxes are 9 billion 575 million GEL.

The GDP increase prognosis is 5.0% for the next year.

Justice Minister: Head of Supreme Court resists reform

Georgia does not recognize that there are problems within the judiciary

Tea Tsulukiani responded to the statement made by Kote Kublashvili, as per which, as soon as Tea Tsulukiani was appointed as the Minister of Justice, she tried to influence the judges through exerting pressure on them. "On my initiative, the Georgian government successfully carried out the judicial reform that was positively assessed by the European Union; this was one of the crucial factors for signing the Association Agreement with the EU. As for the problems and the shortcomings within the judiciary, Mr. Kublashvili will have to recognize them today or tomorrow. I, personally, no longer have high hopes that he will become a reformer and leave the court with this mantle, but I am deeply convinced that the next chairman will be a reformer along with whom I’ll finalize the judicial reform and make Georgia and a Georgian judge ideal,"- said Tea Tsulukiani.

Georgian and Armenian currencies collapse

The Financial Times has published an article entitled “Georgian and Armenian currencies collapse”

“Georgia's currency has collapsed to its lowest level versus the dollar in more than a decade and the Armenian dram to its lowest since 2006 as the Russian Ruble quake sends tremors across the former Soviet Union. Russia’s neighbors are closely tied to their former master's economy through trade ties and remittances. When the ruble plunges it piles pressure onto their currencies.

Kazakhstan was forced to devalue the tenge earlier this year when the ruble first began to slump, but now the heat is on Armenia and especially Georgia. The latter is also being hurt by a budget shortfall, and Russia signing agreements with its separatist regions Abkhazia and South Ossetia.

Georgian president Giorgi Margvelashvili told reporters in Warsaw today that the agreements "threatens and undermines the territorial integrity and sovereignty of Georgia", reports Henry Foy.

We see the trends that have emerged. We see Ukraine, which we see as a basic continuation of Russia's foreign policy... Russia is targeting its neighbors, in what it sees as its own back-yard... to make political decisions based on military force

We want to trade with Russia, we want to be good neighbors with Russia. And the only condition of that is that Russia accepts the territorial integrity of Georgia.

The Georgian lari slumped 4.4 per cent against the dollar today, extending its rout since the beginning of November to 14.4 per cent. The Armenian dram has fallen 1.4 per cent versus the dollar, taking its decline over the same period to almost 10 per cent.

Timothy Ash of Standard Bank wrote:

Armenia and Georgia have similar macro stories, small economies, with managed float FX regimes. Both have relatively strong/robust public finance profiles, i.e. low budget deficits/public debt ratios, and have been growing at decent rates, of 3-4%. However, their weaknesses are both on the external financing side, i.e. persistent current account deficits, and limited FX reserve cover.

Russia is an important trading partner for both, as they have both benefitted from worker remittances, which are likely stalling now with weak growth in Russia, and lower oil prices. Exports to Russia have also been quite significant for both - Georgia has tried to refocus on Russian markets as relations warmed a bit following the departure of President Saakashvili. Russian tourism has been a new "boon" for Georgia in recent years - a rediscovery for many Russians from the Soviet era. These are obviously lagging now.

Both also have significant agro exports to Russia, and had hoped to benefit from Russian sanctions on the West - but massive Russian devaluation is clearly threatening this trade. So this managed currency weakening are only to be expected - inflation is low single digits, so inflation pass thru should be relatively limited”, the article says.