The European Commission has proposed to provide up to EUR 100 million in macro-financial assistance to North Macedonia. With this proposal, the EU is standing by North Macedonia in challenging times, as, following Russia’s war of aggression against Ukraine, the country’s external balance has deteriorated rapidly because of its high dependency on imports of fuel and electricity, an EC press release said.
North Macedonia also faces large external debt repayment needs in 2023 in a context of challenging financing conditions, according to the release.
“We stand by North Macedonia in these challenging times,” Commission President Ursula von der Leyen is cited as saying in the release. “Today, we propose up to EUR 100 million in macro-financial assistance to support the country’s economy, contributing to covering its financing needs for the next two years.”
“It will support the country’s economic needs, in the short-term, and structural reforms, to accompany North Macedonia on its EU path,” she wrote on Twitter.
EU Commissioner for Neighbourhood and Enlargement Olivér Várhelyi, also in a Twitter post, said: “In these challenging socio-economic times, the Commission stands by North Macedonia with its proposal to provide up to EUR 100m Macro-Financial Assistance for the country. It is another proof of our commitment that we stand with our partners.”
According to the EC press release, the proposed assistance would contribute to covering North Macedonia’s financing needs in 2023 and 2024, supporting both fiscal sustainability and structural reforms. The proposal accompanies a 24-month support program concluded with the International Monetary Fund of up to EUR 530 million.
“The assistance would come in the form of loans, to be paid in two tranches. These two payments would be conditional on the implementation of policy measures which need to be agreed between North Macedonia and the EU in a Memorandum of Understanding,” the release says.
The Memorandum of Understanding is expected to focus on policy reforms in the areas of fiscal governance, tax policy, the management of public investment, public-private partnerships, business environment, transparency in state aid, energy efficiency, judiciary reform, and the fight against corruption.
The payments would also be conditional on a positive track record in implementing the IMF program and the reforms will support North Macedonia on its path to EU membership. Next, the European Parliament and the Council of the EU are to consider and adopt the proposal.