The Georgian president has vetoed the ruling party’s controversial central bank reform bill and pledged to exercise her power again as she continues to distance herself from the government’s policies. 

On February 23, largely figurehead President Salome Zourabichvili said she vetoed amendments to the law on the National Bank of Georgia (NBG) that many fear would compromise its independence. 

She said the amendments were “neither necessary, nor urgent, nor well founded.”

While her vetoes will almost certainly be overridden, they mark the president’s decisive turn away from the party that once endorsed her candidacy.

The ruling Georgian Dream party adopted the amendments in an expedited procedure on February 9. They would change the governing structure of the country’s central bank by introducing the post of “first vice president” who can assume the bank president’s duties on an interim basis. The first vice president would be selected by the bank’s nine-member oversight board from among its members. 

The changes come as the seven-year tenure of incumbent NBG President Koba Gvenetadze ends early in March. His successor is to be selected by the oversight board and then approved by Zourabichvili. Up to now the board has consisted of four executive members – the bank’s president and three vice presidents – and five non-executive members. 

But now the introduction of the “first vice president” – and this in addition to the three vice presidents who were each similarly able to assume the president’s duties – would distort the existing balance of executive and non-executive members of the board, which is seen as one of the guarantees of the board’s independence. 

Board members are nominated by the Georgian president and approved by parliament for a seven-year term. There are currently two vacant positions and President Zourabichvili is yet to present candidates to fill them.

She has expressed worry that should the parliament reject her nominees for positions on the board, the new laws will allow the “first vice president” (who can be elected by the board without the Georgian president’s approval) to assume the NBG president’s duties indefinitely. 

To justify the changes, the ruling party cited the uncertainty over which one of the three equally powerful vice presidents is to assume the duties in the absence of a president, a dilemma that the “first vice president” position would resolve. 

But critics suspect that the authorities might seek to place government loyalist Natia Turnava, a current board member, in the first vice president post. The amendments also follow earlier alleged attempts by Georgian Dream to gain control of the country’s various independent public agencies. 

The legislative changes have met criticism from the NBG itself, which cited International Monetary Fund recommendations stressing the need for non-executive members on the board to outnumber the executive ones so that the body retains its oversight function. 

IMF officials also criticized the change on February 17, saying that it “risks undermining the authorities’ hard-won credibility.”

Georgia’s national bank under outgoing President Koba Gvenetadze has enjoyed a strong international reputation, receiving repeated praise from diplomats for its general management strategies as well as efforts to align with international financial sanctions against Russia over its invasion of Ukraine. 

Georgian Dream can and most likely will override Zourabichvili’s veto, which in this case requires only a simple majority of the 150-member parliament.

Zourabichvili, elected in 2018 with Georgian Dream’s endorsement, has turned more critical toward ruling party policies in recent years, including in her vocally pro-Ukraine stance amid the government’s more Moscow-appeasing rhetoric 

But she had refrained from using her legislative veto powers until last summer when she sought to block Georgian Dream’s widely criticized surveillance bill in an attempt to save the country’s fading prospects of becoming a European Union membership candidate. (MPs overrode her veto and the surveillance bill became law.)

And on February 20, she again said she would not back a notorious foreign agent bill, hinting at another veto should it be adopted. The bill, which Georgian Dream has promised to endorse, mimics similar laws in undemocratic countries like Russia, where they are used to stigmatize and crack down on critical voices.

“The president of Georgia cannot support such legislation and a new persecution of agents,” she said.

But while her vetoes are but symbolic acts to draw attention to questionable legislation, some point out she could make a real difference by invoking her stronger powers, like that of pardon. 

She earlier disappointed supporters of jailed and hospitalized former President Mikheil Saakashvili by ruling out pardoning him, despite showing concerns about his worsening health. The pardon would not get Saakashvili released amid pending trials on three separate criminal cases, and he has shown no remorse for the crimes he’s been convicted of, Zourabichvili explained. 

But there’s also the less complicated case of the imprisoned director of pro-opposition Mtavari TV, Nika Gvaramia. Last May, Gvaramia was sentenced to 3.5 years on charges widely regarded as trumped up and politically motivated. Zourabichvili herself criticized the decision as poorly timed, coming as it did amid the EU discussions on giving Georgia membership candidate status. 

So far, the president has refused to go further, apparently to fend off the scorn of government supporters. But vetoes, too, were once off the table for her, unlike her predecessor Giorgi Margvelashvili, also a Georgian Dream candidate who eventually made his name by his frequent resort to the veto.