European Integration and Challenges to the Economy of Georgia

The worldwide processes of economic globalization and integration are irreversible. This, on the one hand, provides significant opportunities for small countries and contains some threats on the other hand. There are the following integration groups in Europe: the European Union, European Free Trade Association and CIS (Eurasian Union). Despite the current hard challenges it is facing, the European Union is the most developed integration group, as well as one of the largest markets in the world. It should be noted that in recent years Georgia has achieved significant progress on the path of economic inte-gration with the EU; in particular, we mean the Association Agreement signed between the European Union and Geor-gia, Deep and Comprehensive Free Trade Area is the part of this Agreement. The Association Agreement between EU and Georgia has fully entered into force. The Agreement suggests Georgia to adjust trade-related legislation and regulations to the EU standards. As indicated in the paper, although Georgia is not a member of the CIS, the country has quite close trade relations with the CIS member states, which have been characterized by increasing trend recently. Of course, we are not against trade relations between countries; however, future risks and challenges should be studied and analyzed. CIS member states accounted for almost 35% of Georgia’s export, while the average corresponding indicator for CIS member states was 16-17%. For example, CIS accounts for 23% of Armenia’s export, 7% of Azerbaijan’s export, 21% of Moldova’s export, 17% the Ukraine’s export, etc. The processes globalization and European integration are irreversible and Georgia has to use the current processes for the development of its economy. The country has chosen the appropriate foreign political and economic priorities and therefore it should continue its way towards the EU towards establishing closer ties with the EU. It would be desirable for Georgia to use the experience of leading European countries, as well as new EU member countries while implementing economic reforms.