German Ambassador Peter Fischer, responding to a question about the trend of German investments, stated that a major investor, Heidelberg Cement, has left Georgia.
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“I don’t have information on the latest data, but I would assume that the trend is decreasing. In my view, it is likely to decline further if Georgia moves further away from the EU. The market simply isn’t very attractive to German investors. It’s a small market, not integrated into larger ones. Georgia is comparable in size to one of our major cities, right? And even now, the level of investment is not significant. We have several companies investing here, but their contributions are neither substantial in terms of amounts nor high in added-value activities.
Even a company like Heidelberg Cement has exited the Georgian market. It was one of our largest investments, but it sold its stake. So, the trend is not promising,” Fischer said in an interview with Business Media Georgia.
The ambassador stated that when Georgia halted its progress on the path of European integration, many European businesses reevaluated their plans and decided that investing might not be worthwhile at this time.
Peter Fischer also highlighted that the economic growth observed in Georgia is a temporary windfall resulting from Russia’s attack on Ukraine, which he believes will not endure.
“I have noticed that in Georgia, people say: ‘We have such high [economic] growth rates, higher than those of the Europeans. The Germans have no economic growth at all, while Georgia has 10% growth.’ This is a windfall from Russia’s attack on Ukraine, and such windfalls do not last.
I see many structural problems. I see challenges with the value of the lari and the volatility of the share prices of Georgian companies listed on stock exchanges. I also note that a relatively high share of Georgia’s state debt is in concessional loans. The further Georgia moves away from the EU, the fewer preferential loans it will receive. This is simply the way things work, and the country will eventually have to refinance this debt on its own,” Fischer remarked.
The German ambassador described youth emigration as a “major problem” for Georgia’s economy. He mentioned hearing from many young people that the further Georgia distances itself from the EU, the more likely they are to leave the country.
Fischer also spoke about Georgia’s prospects for EU accession, reiterating that the process has been suspended.
“If you ask me, I don’t see Georgia returning to the path of European integration in the near future. I see no positive signs of this at all.
The rhetoric of the Georgian government continues, but Georgian legislation has been adopted that moves the country further from the EU rather than closer. Moreover, the rules for holding elections do not meet the standards we expect from a candidate country,” Fischer stated.
