EU backs aid push, monitors for Georgia

BRUSSELS (Reuters) - The European Commission said on Monday it would provide Georgia with up to 500 million euros ($700 million) by 2010 to aid its recovery after its conflict with Russia and hoped this would be matched by EU member states.

Separately, EU foreign ministers sought to maintain pressure on Russia to withdraw its troops from Georgia by rubber-stamping plans to send 200 ceasefire monitors there next month in line with a ceasefire deal, an EU official said.

EU External Relations Commissioner Benita Ferrero-Waldner said the "stabilization and growth package" would go to helping internally displaced people (IDPs), post-conflict rehabilitation and economic recovery and towards new infrastructure.

"It will be 500 million of community money and we do hope by the way, this is normally the case, it will be matched by member states," she told a news briefing as European Union foreign ministers met in Brussels to discuss the Georgia crisis.

"We will want to address the concrete results of the conflict -- that means damage to infrastructure but particularly also help to IDPs and the knock on effects on the economy...on the economic confidence," she said.

Georgia has requested up to $2 billion in international aid to repair and develop infrastructure in the wake of the conflict in August, when Russia invaded in response to Tbilisi's attempt to retake one of its separatist provinces.

The United States has already pledged $1 billion in humanitarian and economic assistance to help rebuild Georgia.

The International Monetary Fund has warned of the risk of damage to investor confidence and has agreed in principle to lend Tbilisi $750 million to soften the economic impact of the conflict, which the government has said may slash growth to less than half its 2007 rate.

HELP THE NEIGHBOURS

Ferrero-Waldner said EU funding for this year alone would be 100 million euros and that the EU executive wanted to help stage an international donors' conference for Georgia as soon as possible. Officials see the event taking place next month.

She added it would be necessary to support states whose economies had been indirectly hit by the conflict, such as Armenia and Azerbaijan, and Moldova and Ukraine.

"What we do will be crucial in recalibrating the partnership with a more assertive Russia and in supporting Georgia," she said.

Russia sent in troops early last month after Georgian forces tried to retake South Ossetia, a breakaway pro-Russian region. Moscow said it acted to prevent "genocide" there, but Western states accused Russia of a disproportionate use of force.

Russian bombing raids hit mainly military targets, but Georgia also reported considerable damage to civilian infrastructure and risks to economic growth and investment.