Brussels, 10 July 2023
The EU will provide €100 million of macro-financial assistance to North Macedonia. The assistance will contribute to supporting North Macedonia’s economic stabilisation and substantive reform agenda. The entire amount of the assistance shall be provided in the form of loans.
The assistance will contribute to strengthening North Macedonia’s resilience in a challenging economic context. The economy of North Macedonia has been significantly affected by the recession caused by the COVID-19 pandemic and by the recent energy crisis, driven by Russia’s war of aggression against Ukraine and North Macedonia’s high dependency on imports of fuel and electricity. These circumstances have contributed to the country’s sizeable financing gap.
The macro-financial assistance accompanies a 24-month support programme concluded with the International Monetary Fund (IMF), of up to €530 million. It will contribute to covering North Macedonia’s financing needs in 2023 and 2024 as identified in the International Monetary Fund (IMF) programme.
The macro-financial assistance will be made available in two equal instalments.
A precondition for granting the macro-financial assistance is that North Macedonia respect effective democratic mechanisms, including a multi-party parliamentary system, and the rule of law, and guarantee respect for human rights.
The Commission will agree with the authorities of North Macedonia on clearly defined economic policy and financial conditions, focusing on structural reforms and sound public finances, to which the macro-financial assistance is to be subject.
Next steps
The decision will enter into force on the third day after its publication in the Official Journal of the EU.
Background
The EU and North Macedonia have developed a close political and economic relationship over the years. Relations continue to develop within the framework of the Stabilisation and Association Agreement between the EU and North Macedonia. Accession negotiations between the EU and North Macedonia were launched on 19 July 2022.
In view of the worsening economic situation and outlook, North Macedonia first requested macro-financial assistance from the EU to complement the IMF programme, in April 2022.
However, the Commission put that request on hold because the country’s economy was still proving quite resilient at that time and there were some other financing options available to meet the 2022 external financing needs. The government of North Macedonia renewed its request for macro-financial assistance in October 2022.
Given that North Macedonia is a candidate country and has begun accession negotiations, it is considered eligible to receive macro-financial assistance from the EU.
The long-term EU budget 2021-2027 allows the use of macro-financial assistance for an overall amount up to €11.6 billion in loans and up to €350 million in grants.
- Decision on providing macro-financial assistance to North Macedonia
- Voting results
- EU relations with North Macedonia (background information)
- EU response to Russia’s invasion of Ukraine (background information)
Source – EU Council