Macro-financial assistance to North Macedonia

SUMMARY OF:

Decision (EU) 2023/1461 providing macro-financial assistance to the Republic of North Macedonia

WHAT IS THE AIM OF THE DECISION?

The decision aims to provide macro-financial assistance of up to €100 million in European Union (EU) loans to North Macedonia.
The finance supports the country’s economic stabilisation and reform agenda by covering its balance-of-payments needs.

KEY POINTS

The European Commission:

borrows the funds on capital markets or from financial institutions and lends them, on the same terms with an average 15-year maturity, to North Macedonia;
may, where circumstances permit, accept early repayment and an improved interest rate, if North Macedonia so requests;
reduces, suspends or cancels the loans available if North Macedonia’s financial needs prove less than anticipated;
manages the macro-financial assistance in line with the agreements or understandings between the International Monetary Fund (IMF) and North Macedonia, and the key principles and economic reform objectives in the stabilisation and association agreement (see summary);
informs the European Parliament and the Council of the European Union regularly on developments in the loan package;
monitors closely whether North Macedonia complies with the various requirements attached to the financial assistance;
coordinates closely with the IMF, the World Bank and, where necessary, the European Parliament and the Council;
reports annually to the European Parliament and the Council by 30 June on the developments of the previous year.

North Macedonia:

must respect democratic norms such as a multi-party parliamentary system, the rule of law and respect for human rights as a pre-condition for the loans;
agrees with the Commission on an economic policy and financial conditions, complete with timeline, focusing on structural reforms and sound public finances to improve:
- the efficiency, transparency and accountability of public finance management systems,
- progress in opening up markets, developing rule-based and fair trade, and other EU external policy priorities.

The loans are:

available for 2.5 years;
paid out in two equal instalments, with the second instalment not paid out, in principle, earlier than 3 months after the first;
dependent on the following conditions:
- respect for democratic values,
- continuous satisfactory implementation track record,
- application of the agreed economic policy and financial conditions;
subject to regular checks by the EU (particularly the Commission, the European Court of Auditors and the European Anti-Fraud Office) and North Macedonia to prevent fraud and financial irregularities.

FROM WHEN DOES THE DECISION APPLY?

The decision entered into force on 20 July 2023.

BACKGROUND

Relations between the EU and North Macedonia are developing within the framework of the Stabilisation and Association Agreement between the EU and the former Yugoslav Republic of Macedonia.
In April 2022 and again in October of the same year, North Macedonia, whose economy was badly hit by the COVID-19 pandemic and rising energy costs, requested EU macro-financial assistance to complement the IMF support programme of up to €530 million for 2023 and 2024.
The EU’s macroeconomic assistance is expected to go hand in hand with the implementation of budget support operations under the Instrument for Pre-Accession Assistance (Regulation (EU) 2021/1529, see summary).
North Macedonia is an EU candidate country. Accession negotiations opened on 19 July 2022.
For further information, see:
- North Macedonia (European Commission).

MAIN DOCUMENT

Decision (EU) 2023/1461 of the European Parliament and of the Council of 12 July 2023 providing macro-financial assistance to the Republic of North Macedonia (OJ L 180, 17.7.2023, pp. 1–7).