North Macedonia: Reform-oriented government can access funding if it meets certain conditions

North Macedonia: Reform-oriented government can access funding if it meets certain conditions

EP Plenary session — Revision of the Stability and Growth Pact

Trade MEPs voted to provide up to €100 million in Macro-financial Assistance (MFA) to North Macedonia to help the country cover part of its funding needs in 2023.

On Thursday, members of the Committee on International Trade endorsed the Commission’s proposal to give the government of North Macedonia support to stabilise the country’s economic situation by 33 votes, none against, with 1 abstention.

The support would come in two instalments, the release of which would be conditional on progress being made with the implementation of policy measures which need to be agreed between North Macedonia and the EU in a Memorandum of Understanding. They would likely focus on fiscal governance, tax policy, the management of public investment, public-private partnerships, improvement of business environment, transparency in state aid, energy efficiency, judiciary reform, and the fight against corruption.

In addition, the assistance is conditional on a satisfactory track record implementing an International Monetary Fund (IMF) programme.

Following a partial recovery from the pandemic-induced recession, North Macedonia has been severely hit by the fallout from Russia’s war of aggression against Ukraine. Against the backdrop of tighter global financial conditions, higher energy prices and higher-than-expected losses by the domestic state-owned electricity producer, North Macedonia requested macro-financial assistance (MFA) in 2022.

“North Macedonia was and still is hit hard by Russia’s war of aggression against Ukraine. They are facing large external debt repayment needs this year. With this assistance we are sending a strong sign of solidarity towards North Macedonia and the Western Balkan countries,” said rapporteur Angelika Winzig (EPP, AT).

North Macedonia is an EU candidate country, which formally opened accession negotiations with the EU in July 2022.

Macro-financial Assistance is part of the EU’s wider engagement with neighbouring and enlargement partners, and is intended as an exceptional crisis response instrument for partners experiencing severe balance-of-payments problems. It demonstrates the EU’s solidarity with these partners and the support of effective policies at a time of unprecedented crisis.

The INTA report is scheduled to be voted by all MEPs during the June plenary session. Once the Council of the EU has approved the support, it will be published in the Official Journal of the EU and apply on the day following its publication.


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