Brussels Seeks $700M for Tbilisi

BRUSSELS -- The European Commission on Monday proposed a 500 million euros ($700 million) aid package over three years to help Georgia recover from its conflict with Russia.

EU External Relations Commissioner Benita Ferrero-Waldner said she hoped that European Union foreign ministers will approve the money at a meeting Monday.

"The European Union must undertake a very significant financial effort," she told reporters. "We have to go beyond the ongoing assistance."

She says the "stability and growth package" designed to run from 2008-2010 will assist people displaced by the conflict, help to rebuild, support Georgia's economic stability and finance the construction of new infrastructure.

The EU ministers were also expected to agree to send a 200-strong civilian observer mission to Georgia, meant to verify Russian troop withdrawals from parts of Georgia outside of South Ossetia and Abkhazia, the two breakaway provinces.

Diplomats said the mission would last for one year, and cost the EU 31 million euros ($44 million). France was to provide the biggest contingent of observers -- around 70.

Javier Solana, the EU's foreign policy chief, said the mission could be deployed within weeks and could eventually also go into South Ossetia, if Moscow agrees.

On aid, Ferrero-Waldner told reporters that she hoped the money from the EU's central budget would be matched by contributions from individual EU nations, bringing the bloc's total aid to at least 1 billion euros ($1.4 billion). EU officials said they expect an international donors' conference for Georgia to be held Oct. 14 in Brussels.

The money from the European Commission's budget needs approval from the European Parliament as well as from the 27 EU governments. Ferrero-Waldner said she hoped that at least 100 million euros ($140 million) would be spent this year.

European Commission aid to Georgia before the conflict averaged a little over 30 million euros ($42 million) a year, she said.

It was not clear how much of the money would be spent in the breakaway Georgian regions of South Ossetia and Abkhazia, which are under the control of Russian-backed separatists.

The EU faces a dilemma in dealing with those regions. Excluding them from the package would reinforce their separation from the rest of Georgia. However, Russia insists that any aid be coordinated with the separatist regimes, which are not recognized by EU nations.

Ferrero-Waldner said the EU was also looking to strengthen ties with other former Soviet nations in the wake of the Georgia-Russia war. She said she would soon be visiting Ukraine, Georgia and Moldova to show support for those nations, who are all nervous about Russia's intentions.