Tbilisi close to budgetary crisis
13 February, 2014
Tbilisi close to budgetary crisis
Tbilisi will soon face a budgetary crisis due to power struggle between its local executive body - the Mayor’s Office and the local representative body - Sakrebulo. Three months remain before the upcoming local elections, but the Georgian capital still lacks the necessary fiscal document for 2014. If the paper is not approved by 11 March, it may lead to a dismissal of the Tbilisi authorities and establishment of a temporary central power. Meanwhile, social projects may be halted.
The draft
of the Tbilisi budget for 2014 entered Tbilisi Sakrebulo – the assembly that is an elected representative body of the city government - on 15 November 2013, and although the draft went through amendments three times, it is stalled due to conflicts between the minority supported Mayor’s office and the majority-controlled Sakrebulo. Analysts attribute this to the local elections scheduled for this spring.
In fact, Irakli Shikhiashvili, a member of the ruling coalition and Chairman of Sakrebulo, said Sakrebulo cannot trust the GEL 785 million specified by the Tbilisi budget draft to the minority-staffed government of Tbilisi in the pre-election period. The United National Movement formerly in power from 2004-2012 has been charged with misuse of budget money during pre-election campaigns.
The minority complains that the ruling party aims to dismiss Tbilisi government in order to get its hands on financial levers of the Tbilisi budget before the elections, while the absence of a new budget will hinder a number of social projects, including financing kindergartens, health-insurance, public transport travel funding for 600 thousand socially vulnerable people, vouchers partly compensating Tbilisi residents in the winter, and many more.
Shikhiashvili believes the capital cannot face any financial problems if the budget is not approved, since the budget law allows Tbilisi to get GEL 60 million from the central budget each month. The law states that unless the new budget of the self-governing body is approved, the central budget finances this body by one-twelfth of its previous budgetary allocations each month, until a new budget is approved.
However, this one-twelfth financing cannot cover the public transport compensation of 600 thousand beneficiaries after February, and kindergartens may also lose financing. Besides, many projects entailing tenders cannot be announced without the new budget.
But Georgian non-governmental watchdogs are most afraid of a political crisis. According to the budget code of Georgia, if the local government fails to approve its budget within three months after the state budget approval date, the central power will dismiss the local authority and undertake ruling of the self-governing body through a new Mayor assigned by the federal government until a new Assembly is elected. The state budget for 2014 was approved on 11 December 2013, and if the Tbilisi budget is not approved by 11 March, the described scenario will result.
However, dismissal of local government and establishment of temporary central power three months before the upcoming local elections contradicts Georgia’s international obligations, the National Association of Local Authorities of Georgia (NALAG) warned on 7 February. Georgia is a member of the European Council that prohibits its member-states to dismiss an elected governing body six months ahead of scheduled local elections. To avoid problems NALAG calls for Tbilisi Sakrebulo majority and minority factions to reach a consensus. Many other NGOs approve the idea.
“It is impossible to establish central power in the capital on the grounds of a budgetary crisis when in three months a new local authority will be elected, and the voters will give it a mandate on Tbilisi budget spending and control,” they contend.

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