Brussels, 6 February 2023
The Commission is today proposing to provide up to €100 million in Macro-financial Assistance (MFA) to North Macedonia. With this proposal, the Commission 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. North Macedonia also faces large external debt repayment needs in 2023 in a context of challenging financing conditions.
The proposed assistance would contribute to covering North Macedonia’s financing needs in 2023 and 2024, supporting both fiscal sustainability and structural reforms. Today’s proposal accompanies a 24-month support programme concluded with the International Monetary Fund (IMF), of up to €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 Memorandum of Understanding is likely 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 programme. These reforms will support North Macedonia on its path to EU membership.
Ursula von der Leyen, Commission President, said:
“We stand by North Macedonia in these challenging times. Today, we propose up to €100 million in Macro-financial Assistance to support the country’s economy, contributing to covering its financing needs for the next two years.”
Next steps
It is now for the European Parliament and the Council to consider and adopt the proposal to provide Macro-financial Assistance to North Macedonia. Once adopted, the proposal will enter into force and payments can follow, provided policy conditions, to be laid out in a Memorandum of Understanding between North Macedonia and the EU, are met.
Background
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.
North Macedonia is an EU candidate country, which formally opened accession negotiations with the EU in July 2022.
On 22 April 2020, the Commission adopted a proposal for a €3 billion MFA package to ten enlargement and neighbourhood partners to help them limit the economic fallout of the coronavirus pandemic. The decision was adopted by the European Parliament and the Council of the EU on 25 May 2020. As part of this package, the EU agreed on a MFA programme of €160 million to North Macedonia. The first instalment of €80 million was disbursed in October 2020. The second instalment of €80 million was released in June 2021, following a positive assessment by the Commission of the progress made with respect to the fulfilment of policy conditions attached to this assistance.
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