By Helena Bedwell

The European Union has given Georgia 120 million euros of a pledged 500 million euros ($647 million) to help the former Soviet republic provide housing for people displaced by its war with Russia in August.

“The main aim of these funds was, of course, to help new and old IDPs,” EU External Relations Commissioner Benita Ferrero-Waldner told reporters in the capital Tbilisi today, using the acronym for “internally displaced persons.” “I thank the Georgian government for spending this money and building so quickly.”

Ferrero-Waldner said the EU had placed “political conditions” on the aid. “We want to see political, economic and judicial reforms continue, and for not a euro to be spent on militarization,” she said.

The five-day war over the separatist region of South Ossetia caused $1 billion of damage to Georgia’s economy and forced about 130,000 people from their homes, according to the government. Another 30,000 refugees remain from Georgia’s conflict with another breakaway region, Abkhazia, in the early 1990s. Russia recognized both regions’ independence following the August war.

Georgia won pledges of $4.55 billion in international aid to rebuild its economy and resettle refugees in the wake of the war, led by a two-year $1 billion offer by the U.S.

Unarmed Monitors

Ferrero-Waldner said the EU won’t expand its observer missions on Georgia’s borders with South Ossetia and Abkhazia after monitors for the Organization for Security and Cooperation in Europe were forced to withdraw from Georgia as of Jan. 1 when Russia objected to their presence. Russia has veto power in the OSCE.

“There’s a good chance” the OSCE may return to the area, Ferrero-Waldner said. “We’re not at the end of our diplomatic efforts. We must keep the zone quiet and secure and avoid incidents.”

The EU has deployed 300 unarmed, civilian observers along the borders of South Ossetia and Abkhazia.

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