EU 4 Sustainable Governance and Resilience The Action ¿EU 4 Sustainable Governance and Resilience¿ contributes to the overall financial stability and socio-economic welfare of the country, thus supporting resilience against external shocks, such as the pandemic or Russia¿s war of aggression against Ukraine.The EU is a long standing and leading partner of Georgia in the area sustainable governance and public administration reforms. Today, Georgia¿s level in the management of public finances can be considered as having a strong foundation and progressing towards more advanced policy levels ¿ and the role of EU cooperation in this achievement has been underlined by recent evaluations[1]. Core functions of the public finance management system and practices are established and operational. However, constant progress is needed requiring more complex approaches and inclusive policy dialogue. The areas that need improvement are inter alia, budget coverage and credibility, performance information and gender responsive budgeting (GRB), managerial accountability and internal financial control, state owned enterprise management, public investment management, external audit and financial oversight.&nbsp;PFM relates to the governance pillar of the Economic and Investment Plan, but also has a bearing on its economic pillar.Sustainable governance at local level is also a pre-condition for evidence-based measures and longer-term climate impact mitigation. In fact, cities have a high potential for improvement of their energy/climate impact and should directly contribute to the global fight against Climate change. They nevertheless often miss human and financial capacities to implement projects contributing to making them more sustainable. Activities in this field, would relate directly to the Economic and Investment Plan, in particular Flagship 5 on improving air quality and Flagship 6 on energy efficiency for Georgia.&nbsp;External shocks such as those ongoing caused by the COVID-19 pandemic and then the Russia¿s war of aggression against Ukraine have a serious negative impact on the economic growth, exports and job creation, especially when they overlap and for the more vulnerable communities and regions. Increased Georgia¿s resilience and capacity to harbour and deal with such changes are key to enabling progress of key internal reforms.The objective of the Action is to improve governance with a more comprehensive, transparent and accountable system of state finances and contribute to sustainable living conditions, increased resilience and development in small and medium cities and communities.