The European Commission is proposing to offer up to €100 million in Macro-Financial Assistance (MFA) to North Macedonia. This proposal is a show of support for the country during difficult times, as its economy has been negatively impacted by Russia’s war against Ukraine and its high dependence on imported fuel and electricity. The proposed assistance will help address North Macedonia’s financial needs in 2023 and 2024, supporting both economic stability and structural reforms. The assistance would come in the form of loans, which will be provided in two stages and conditioned upon the implementation of policy measures agreed upon in a Memorandum of Understanding with the EU.
These policy reforms will likely center on issues such as fiscal governance, tax policy, public investment management, business environment, state aid transparency, energy efficiency, judicial reform, and anti-corruption efforts. The loan payments will also be dependent on a positive track record in implementing the IMF’s 24-month support program, which is worth up to €530 million.
Commission President Ursula von der Leyen stated, “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.” The proposal will need to be considered and adopted by the European Parliament and the Council before it takes effect.
Macro-Financial Assistance is a component of the EU’s engagement with neighboring and enlargement partners and is designed to provide exceptional crisis support to partners facing severe balance-of-payment problems. It reflects the EU’s solidarity with these partners and support of effective policies during times of crisis. North Macedonia is a candidate country for EU membership and officially began accession negotiations with the EU in July 2022.
As part of a €3 billion MFA package adopted by the Commission in April 2020 to help mitigate the economic impact of the coronavirus pandemic, North Macedonia received €160 million in assistance, with the first installment of €80 million disbursed in October 2020 and the second installment of €80 million released in June 2021. The second installment was made possible due to the positive progress made by North Macedonia with respect to fulfilling the policy conditions attached to the assistance.
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