President to veto bill over NBG if confirmed by parliament

By Gvantsa Gabekhadze

Monday, June 29

International Organizations, local opposition and NGOs are against the separation of the supervisory functions from the NBG

President’s advisor Giorgi Abashishvili stresses that the President will always veto the bills that might somehow affect the state interests

The President will veto the bill initiated by the majority members over the stripping the National Bank of Georgia (NBG) of its supervisory function to financial institutions as the bill might affect Georgia’s international image.

The statement came after the world's most influential international financial institutions sent a jointly composed letter to Prime Minister Irakli Gharibashvili and Parliament Speaker Davit Usupashvili. In the letter, the International Monetary Fund, the World Bank, the European Bank for Reconstruction and Development and the Asian Development Bank advise the government not to separate the supervisory function from the National Bank.

Despite the letter the legislative body adopted the bill with its first reading on June 27. Two more readings are necessary the bill to become the law. If confirmed a Financial Supervisory Agency will be established that will be governed by a seven-member board. President of NBG and one more member of central bank’s board will take two seats; five other seats will be occupied by candidates nominated by the government and confirmed by the Parliament. The head of the agency will be nominated by the board members and confirmed by the parliament.

President’s advisor in economic issues Giorgi Abashishvili states that the adoption of the bill is likely to stir anger among Georgia’s allies.

“Obviously, friends sometimes get angry when their advice is not taken into account and especially when they see that something opposite to what they advise is being done,” Abashishvili said.

“This kind of bill that forbids the National Bank to carry out its obligation under the Constitution and jeopardizes the country's economic system will always be vetoed by the President,” Abashishvili said.

The parliamentary opposition believes that the bill has a political background and its adoption will lead to the collapse of the NBG.

The opposition United National Movement stresses that the adoption of the law was ordered by Georgia’s ex-Prime Minister Bidzina Ivanishvili, who dislikes the current head of the National Bank Giorgi Kadagidze and wants control of the Bank.

Member of the opposition Free Democrats Davit Onoprishvili stated that the majority fails to provide reasonable arguments in favor of the bill. He stresses that adoption of the “risky bill” will be irrelevant with regard to country’s current economic challenges.

Co-sponsor of the bill, majority member Tamaz Metchiauri said in response that the current members of the NBG board are politicized in favor of the previous team of the country and the adoption of the bill will cause the de-politicizing of the NBG.

Fellow member of the coalition Vakhtang Khmaladze stressed that the bill is in line with the constitution.

If the bill is adopted and if the President vetoes it the majority will have to override the veto, 76 votes are required for this. The coalition holds 86 seats in parliament.