EU Remains Wary of Georgia, Despite Release of Kidnap Victim

Despite his release from captivity over two weeks ago, the kidnapping case of British banker Peter Shaw continues to stir controversy in Georgia. Government leaders had expressed hope that Shaw's release would remove obstacles that had disrupted European Union economic assistance. But given the ongoing suspicions surrounding the incident, EU officials are hesitant to restore aid programs, upon which Georgia depends heavily, to previous levels.

Georgian media reports in recent days have suggested that Shaw – during his tenure as head of Agro-Business Bank, an EU-promoted venture – was involved in a scheme to misappropriate an EU loan. The EU's anbassador in Tbilisi, Torben Holtz, vigorously denied the published reports at a November 19 news conference. "The European Commission has no reason to suspect Peter Shaw of illegal activities in Georgia," Holtz said.

Georgian security forces freed Shaw on November 6. Opposition politicians have accused the government of involvement in the kidnapping and of staging the release. They point to the fact that the supposed kidnappers have not been caught. Holtz's vigorous defense of Shaw's activities is indicative of the EU's lingering doubts about the Georgian government's handling of the kidnapping case. Unanswered questions surrounding Shaw's kidnapping raise concerns in EU circles about deepening lawlessness in Georgia.

Shortly after Shaw's release, Georgian President Eduard Shevardnadze defended the government's conduct and expressed hope for an early resumption of full EU ties. The EU delayed aid programs worth about $40 million days after Shaw's daylight abduction June 18 by armed men in Tbilisi.

"Some have managed to establish an air of skepticism about the operation [to free Shaw]," Shevardnadze said in a November 11 radio interview. "Shaw was undoubtedly freed as a result of an anti-criminal and anti-terrorist operation being carried out in the Pankisi Gorge.

"It is very important that fully fledged relations with the EU be restored," Shevardnadze continued. "I am confident our cooperation will be restored to normal."

EU officials do not appear to share Shevardnadze's optimism concerning cooperation. The Shaw case has prompted a reevaluation of Georgian cooperation initiatives.

"Of course we are very happy about Peter's release, but it is not going to be business as usual, after this," said a European diplomat involved in the case. "The Georgians think because Shaw is released that the money will just start flowing again. I am afraid they're mistaken. That's not the way they are reacting in Brussels."

It is unclear how much aid might be cut by Brussels, which was deeply shocked by the kidnapping of Shaw, who spent almost six years in Georgia as the EU expert responsible for the agricultural banking project. With his semi-official status, Shaw's kidnapping – on the day before he was to leave the country – was seen as marking a serious deterioration in Georgia's security climate for foreigners and an escalation over a previous series of kidnappings of foreign businessmen.

"We are rethinking our whole relationship," said a Tbilisi-based European diplomat.

An EU staffer was beaten to death a little more than a year ago. Since then, there have also been several serious assaults and more recently new threats against foreigners, including thinly veiled death threats against the manager of the German-funded Microfinance Bank of Georgia (MBG), who is now planning to leave the country.

"This [Shaw] incident has to be seen in a broader context