COMMISSION STAFF WORKING DOCUMENT North Macedonia 2023 Report Accompanying the document Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions 2023 Communication on EU Enlargement policy

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EUROPEAN
COMMISSION
Brussels, 8.11.2023
SWD(2023) 693 final
COMMISSION STAFF WORKING DOCUMENT
North Macedonia 2023 Report
Accompanying the document
Communication from the Commission to the European Parliament, the Council, the
European Economic and Social Committee and the Committee of the Regions
2023 Communication on EU Enlargement policy
{COM(2023) 690 final} - {SWD(2023) 690 final} - {SWD(2023) 691 final} -
{SWD(2023) 692 final} - {SWD(2023) 694 final} - {SWD(2023) 695 final} -
{SWD(2023) 696 final} - {SWD(2023) 697 final} - {SWD(2023) 698 final} -
{SWD(2023) 699 final}
Offentligt
KOM (2023) 0690 - SWD-dokument
Europaudvalget 2023
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Table of Contents
1. INTRODUCTION...........................................................................................................................................3
1.1. CONTEXT .......................................................................................................................................................3
1.2. SUMMARY OF THE REPORT....................................................................................................................3
1.3. STATE OF PLAY OF THE ACCESSION NEGOTIATIONS............................................................................................8
2. CLUSTER 1: THE FUNDAMENTALS OF THE ACCESSION PROCESS ..........................................................8
2.1. FUNCTIONING OF DEMOCRATIC INSTITUTIONS AND PUBLIC ADMINISTRATION REFORM.......................................8
2.1.1. Democracy ............................................................................................................................8
2.1.2 Public administration reform ..................................................................................................13
2.2. RULE OF LAW AND FUNDAMENTAL RIGHTS .....................................................................................17
2.2.1 Chapter 23: Judiciary and fundamental rights.....................................................................17
2.2.2 Chapter 24: Justice, freedom and security............................................................................39
2.3. ECONOMIC CRITERIA .................................................................................................................................54
2.3.1. The existence of a functioning market economy ......................................................................54
2.3.2. The capacity to cope with competitive pressure and market forces within the Union.............63
2.4. PUBLIC PROCUREMENT, STATISTICS, FINANCIAL CONTROL ....................................................................................67
Chapter 5: Public procurement ...........................................................................................................67
Chapter 18: Statistics ..........................................................................................................................69
Chapter 32: Financial control..............................................................................................................71
3. GOOD NEIGHBOURLY RELATIONS AND REGIONAL COOPERATION....................................................74
4. ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP ......................................................................76
CLUSTER 2: INTERNAL MARKET ..................................................................................................................................76
Chapter 1: Free movement of goods...................................................................................................77
Chapter 2: Freedom of movement for workers...................................................................................79
Chapter 3: Right of establishment and freedom to provide services..................................................79
Chapter 4: Free movement of capital .................................................................................................81
Chapter 6: Company law.....................................................................................................................82
Chapter 7: Intellectual property law ...................................................................................................83
Chapter 8: Competition policy.............................................................................................................84
Chapter 9: Financial services...............................................................................................................85
Chapter 28: Consumer and health protection.....................................................................................87
CLUSTER 3: COMPETITIVENESS AND INCLUSIVE GROWTH.............................................................................................89
Chapter 10: Digital transformation and media...................................................................................89
Chapter 16: Taxation...........................................................................................................................91
Chapter 17: Economic and monetary policy .......................................................................................92
Chapter 19: Social policy and employment.........................................................................................93
Chapter 20: Enterprise and industrial policy.......................................................................................96
Chapter 25: Science and research.......................................................................................................97
Chapter 26: Education and culture .....................................................................................................98
Chapter 29: Customs union...............................................................................................................100
CLUSTER 4: THE GREEN AGENDA AND SUSTAINABLE CONNECTIVITY...........................................................................101
Chapter 14: Transport policy.............................................................................................................102
Chapter 15: Energy............................................................................................................................103
Chapter 21: Trans-European networks .............................................................................................105
Chapter 27: Environment and climate change..................................................................................107
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CLUSTER 5: RESOURCES, AGRICULTURE AND COHESION.............................................................................................109
Chapter 11: Agriculture and rural development ...............................................................................109
Chapter 12: Food safety, veterinary and phytosanitary policy.........................................................111
Chapter 13: Fisheries and aquaculture .............................................................................................112
Chapter 22: Regional policy and coordination of structural instruments.........................................113
Chapter 33: Financial and budgetary provisions...............................................................................115
CLUSTER 6: EXTERNAL RELATIONS ............................................................................................................................116
Chapter 30: External relations ..........................................................................................................116
Chapter 31: Foreign, security and defence policy .............................................................................117
ANNEX I – RELATIONS BETWEEN THE EU AND NORTH MACEDONIA...........................................................................120
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1. INTRODUCTION
1.1. CONTEXT
The first intergovernmental conference on accession negotiations with North Macedonia took
place in July 2022. At the same time, the first step in the accession negotiations process was
taken with the launch of the analytical examination of the EU acquis, the ‘screening’. This
has progressed smoothly. North Macedonia continued to implement the Stabilisation and
Association Agreement and the joint bodies under the agreement met at regular intervals.
The EU accession negotiation process with North Macedonia is conducted in line with the
revised enlargement methodology, and with the requirements set out in the Negotiating
Framework, which have an even stronger focus on the fundamentals (cluster 1) of the
accession process.
The authorities have continued to demonstrate and to declare publicly their commitment to
advancing on their EU path. Now that the accession negotiations process has begun, the pace
of EU-related reforms needs to pick up.
North Macedonia has also fully aligned with the EU positions on Russia’s war of aggression
against Ukraine, sending a strong signal of its strategic choice of EU accession and showing
itself once more to be a reliable partner. In 2023, North Macedonia has played an active role
in a complex geopolitical context during its term as chair of the Organisation for Security and
Cooperation in Europe (OSCE). The impact of Russia’s war of aggression against Ukraine,
including high energy, commodity and food prices and disruptions in supply chains, has
weighed heavily on the economy and seriously affected vulnerable households and small and
medium-sized enterprises.
1.2. SUMMARY OF THE REPORT1
The reporting period was marked by the start of the EU accession negotiations process,
including the screening process. The political situation remained polarised, which had an
impact on the proper functioning of democratic institutions.
On the political criteria, North Macedonia continued its efforts to strengthen democracy,
while it faced significant challenges in the area of the rule of law. Overall, the legal
framework remains conducive to the holding of democratic elections in North Macedonia.
However, no progress was made to address and implement the outstanding recommendations
by the OSCE's Office for Democratic Institutions and Human Rights and the Venice
Commission. As mentioned repeatedly in previous reports, electoral legislation should be
comprehensively reviewed to address inconsistencies in a timely, inclusive and transparent
manner.
Parliament’s work was marred by political polarisation, which deepened further, delaying the
adoption of many reform laws and important appointments. The EU accession negotiation
process requires broad consensus of major political parties. All parties need to start engaging
in a constructive and inclusive political debate, to strengthen the role of Parliament.
1
This report covers the period from June 2022 to June 2023. It is based on input from a variety of sources,
including contributions from the government of North Macedonia, the EU Member States, European Parliament
reports and information from various international and non-governmental organisations. It also includes the
results of comparative assessments and indices produced by other stakeholders, in particular in rule of law.
The report uses the following assessment scale to describe the state of play: early stage, some level of
preparation, moderately prepared, good level of preparation and well advanced. To describe progress made
during the reporting period, it uses the following scale: backsliding, no progress, limited progress, some
progress, good progress and very good progress. Where appropriate, interim steps have also been used.
4
Parliament and government committed to launch and achieve as a matter of priority the
relevant constitutional changes, with a view to including in the Constitution citizens who live
within the borders of the state and who are part of other peoples, such as Bulgarians.
Excessive and sometimes inappropriate use was made of fast-track procedures and of the ‘EU
flag’ procedure, in some cases due to the lack of consultations and poor planning of the
legislative calendar. The ‘EU flag’ should be used when directly linked to the adoption of
laws whose main goal is aligning with the EU acquis, and not to short-cut public debate on
important issues. Parliamentary oversight of the executive was regularly exercised through
parliamentary questions to ministers. Parties should spare no efforts in meeting long-overdue
commitments for internal reform dating from the third round of the ‘Jean Monnet Dialogue’
in early 2020. Work continued on establishing criminal responsibility for those who
orchestrated or committed violence in the attack on Parliament on 27 April 2017. Prompt
implementation of recommendations by the Group of States against Corruption is required to
increase the transparency of funding for political parties. Parliament should ensure the timely
review of the statutory reports sent to it by state agencies and bodies.
Overall, civil society organisations (CSOs) in North Macedonia continue to operate in an
enabling environment. However, the government should increase its efforts to mainstream
civil society engagement in priority areas and consultation activities. CSOs should play an
important role in the reform process and be involved in decision-making processes. Existing
legal and financial frameworks still need to be amended and implemented in practice, notably
to provide consistent mechanisms for awarding public funding to CSOs. There is a need for
the Council for Cooperation between the Government and Civil Society to resume its
activities.
The country needs to strengthen its capacity for parliamentary oversight of the intelligence
services.
North Macedonia remains moderately prepared in terms of public administration reform.
Limited progress was made in the reporting period with the adoption of the new public
administration reform strategy and the accompanying action plan in July 2023. Despite
having started the process five years ago, the country still has not adopted the revised
legislative framework for human resources management, which includes the revised Law on
administrative servants, the Law on public sector employees and new legal provisions on top-
level management. The new framework should improve human resource management across
the administration and help ensure merit-based recruitments, promotions, and dismissals at all
levels, including senior management. Legislation has not yet taken on board the State
Commission for the Prevention of Corruption’s recommendations on nepotism, cronyism,
and political influence in the recruitment of public sector employees and in the appointment
of members of supervisory and management boards. Improvements in accountability in the
public administration are undermined by the failure to adopt the new Law on state
organisation. There are ongoing efforts to improve delivery of services to citizens and
businesses.
The judicial system of North Macedonia is in between some and moderate level of
preparation. There was no progress on the judiciary during the reporting period. The Judicial
Council should strive to protect the integrity and independence of judges and institutions and
should resist any external influence. The controversial dismissal of the President of the
Judicial Council raised concerns about undue political influence. The adoption of a new
judicial reform strategy aimed at improving the performance of institutions is behind
schedule. Progress on implementation of the human resource strategies for the judiciary and
prosecution services was limited. The lack of measures to address the impact of scheduled
5
retirements affected efficiency. Most promotions for higher courts faced further delays. Work
continued on upgrading the automated court case management information system for
random distribution of cases in courts. A similar system was introduced in the Public
Prosecutor’s Office.
The country is in between some and moderate level of preparation in the prevention and
fight against corruption. No progress was made. Corruption remains prevalent in many
areas and is an issue of concern. Delays and reversals in trials of high-level corruption cases
increased, resulting in some cases in the expiration of the statute of limitations. The Criminal
Code was amended through an expedited parliamentary procedure. The maximum legal
penalties for specific corruption-related criminal offences were reduced, having implications
on the application of the statute of limitations and affecting, halting or even terminating a
large number of high-level corruption cases, including from the former Special Public
Prosecutor’s Office (SPO). The amendments also hamper the authorities’ ability to
investigate and prosecute such offences. This is a matter of serious concern.
The State Commission for the Prevention of Corruption was proactive in providing public
institutions with policy guidance on preventing corruption. It opened several cases, but its
recommendations need to be followed up. Efforts to improve the functioning of the SCPC
should continue, especially by allocating additional funding for the recruitment of specialist
staff. Additional human and financial resources should also be made available to the Public
Prosecution Office, investigative centres and law enforcements units in charge of
investigating corruption. The sectors most vulnerable to corruption require targeted risk
assessments and dedicated actions.
North Macedonia has some level of preparation in the fight against organised crime. Some
progress was made during the reporting period. The country continues to have a good level of
operational cooperation with EU Members States, non-EU neighbouring countries, Europol
and Eurojust. A new Law on money laundering and financing of terrorism entered into force
in July 2022. Implementing legislation now needs to be drafted and adopted promptly. More
needs to be done to improve the effectiveness of law enforcement in fighting certain forms of
crime, such as money laundering and financial crimes. North Macedonia needs to adopt and
implement the necessary legislation to regulate the activity of the Asset Recovery Office. The
capacity of the National Coordination Centre for the Fight against Organised Crime needs to
be improved. Coordination remains crucial for all stakeholders involved in fighting organised
crime, including between prosecutors and police.
Some progress was made in the fight against terrorism and violent extremism in line with
the objectives set out in the joint action plan on counterterrorism for the Western Balkans and
the new bilateral implementing arrangement. The national strategies for countering terrorism
(2023-2027) and countering violent extremism (2023-2027) were adopted in May 2023, with
the related action plans.
North Macedonia is on one of the main transit routes for migration movements. The country
continues to play an active role in the management of mixed migration flows. Efforts
continued to ensure basic living conditions and services for all migrants in the country. There
is, however, a need to enhance institutional and administrative capacities for all aspects of
migration management. More staff and additional material and technical resources are
required to increase capacity to a satisfactory level. Systematic registration of migrants is
needed, and protection-sensitive profiling needs to be improved. The country should establish
a proper system for managing irregular movement and stop the practice of returning migrants
outside a legal framework. A contingency plan to manage large migratory flows needs to be
finalised and adopted. The Status Agreement for operational cooperation in border
6
management with the European Border and Coast Guard Agency (Frontex) entered into force
on 1 April 2023, allowing the launch of a joint operation with the deployment of officers
from EU Member States to provide support with border control and the management of
irregular migration and cross-border crime.
The legal framework on the protection of fundamental rights is partially aligned with the
EU acquis and standards on fundamental rights. The country continues to meet its general
obligations on fundamental rights, but the legislation should be implemented in a more
systematic manner. Some significant amendments to the Criminal Code were adopted in
February 2023, regulating criminal acts of gender-based violence. Parliament should make
appointments to independent and regulatory bodies based on merit. The functional
independence of human rights bodies must be guaranteed at all times. This means, amongst
other things, allocating sufficient funds. Services for victims of gender-based violence still
need reinforcement and proper funding to meet the standards laid down by the Istanbul
Convention. Persons with disabilities continue to face direct and indirect discrimination,
social exclusion and barriers. The Ombudsman’s Office and the Commission for the
Prevention and Protection against Discrimination signed a memorandum of understanding to
formalise their coordination. The situation in prisons is still dire. The recommendations made
by the European Committee for the Prevention of Torture on the treatment of detained and
convicted persons were not addressed, which is a matter of serious concern. Detention
conditions should be improved with the utmost urgency. Special attention should be given to
promoting non-discrimination, increasing effectiveness in addressing hate crime and hate
speech and strengthening the capacity and independence of institutions in charge of
protecting the rights of persons belonging to minorities or communities. The Agency for
Community Rights Realisation needs to receive sufficient funding to further promote the
protection of minorities and the implementation of the national ‘One Society for All and
Interculturalism’ strategy. The capacity of law enforcement and criminal justice officials to
effectively prevent and prosecute all instances of violence, hate crimes and hate speech needs
to be enhanced. The external oversight mechanism for the police, including the prison police,
is still not fully functional, with the three CSOs representatives still to be selected by the
Parliament. The enacted amendments to the Law on civil registry pave the way to resolving
cases of statelessness and fulfilling the country’s international obligations.
North Macedonia is in between some and moderate level of preparation in the area of
freedom of expression. Overall, it made limited progress. The general context is favourable
to media freedom and allows for critical media reporting. The amended Criminal Code and
Law on civil liability for defamation raised the overall level legal protection for journalists.
However, a number of attacks, threats and some intimidating behaviour towards journalists
were noted. Greater transparency is needed regarding media advertising by state institutions
and political parties. Reform of the public service broadcaster is required to strengthen its
independence, professional standards and financial sustainability. Since December 2018,
Parliament has been delaying the appointment of the public service broadcaster’s
programming council and media regulator’s council. Working conditions for journalists
remain challenging.
On the economic criteria, North Macedonia has made some progress and is at a good level
of preparation in developing a functioning market economy. In 2022, the economy was badly
hit by the fallout from Russia’s war of aggression against Ukraine, which significantly
slowed down its post-COVID-19 recovery. The government supported households and
businesses through large-scale energy subsidies, tax reductions and targeted direct income
support. Owing to an inflation-driven boost to tax income and under-execution of several
7
expenditure categories, the general government deficit remained below the revised target.
Capital expenditure was raised significantly, but still fell short of the revised plan. The public
debt ratio dropped but remains significantly above pre-COVID-19 levels. The central bank
tightened its policy stance further in view of still elevated inflationary pressures, which began
to subside gradually towards the end of 2022 and beyond. The current account deficit rose
substantially as energy import prices surged, but external financing needs were met with the
help of market-based and IMF borrowing. The Organic Budget Law (OBL) adopted in
September 2022 provides for the introduction of fiscal rules and a fiscal council,
strengthening fiscal sustainability. However, progress has been slow in implementing wider-
ranging measures to improve the management of public investment, vital for underpinning
the government’s plans for a sizeable increase in capital expenditure. The banking sector was
resilient throughout the crises. The labour market showed some improvement, but structural
problems persist, including high youth and long-term unemployment and a large gender gap.
The business environment continued to be impeded by the large size of the informal
economy, slow progress in streamlining parafiscal charges and an untransparent and
inefficient State aid regime.
North Macedonia has made some progress and is moderately prepared to cope with
competitive pressure and market forces within the EU. Integration with the EU in trade
and investment remained at a high level in 2022. The share of high-value products in exports
increased further and trade openness surged to a record high. There was further progress in
improving vocational educational training, but major skills shortages persist relative to labour
market needs, entailing long school-to-work transitions. These, coupled with large gaps in
transport and energy infrastructure, low investment and low innovation funding, are
restricting potential growth. Digitalisation of the economy is advancing, but the
competitiveness of domestic businesses could be improved through a wider offering of public
e-Services.
As regards its ability to assume the obligations of membership, North Macedonia is
moderately prepared in most of the areas covered by cluster 2 on the internal market,
namely the free movement of goods, services and capital, intellectual property, competition
policy, financial services and consumer and health protection. The country has achieved a
good level of preparation on company law, although it is still at an early stage on freedom of
movement for workers. North Macedonia made good progress on free movement of capital
and some progress on financial services and consumer and health protection. Limited
progress was made on the free movement of goods, rights of establishment to provide
services. No progress was made on company law, intellectual property law and competition
policy and freedom of movement for workers. Overall, more progress is needed in the
coming year in the areas covered by this cluster, to feed into North Macedonia's preparations
to meet the requirements of the EU’s internal market. Work on this cluster is highly relevant
for the development of the Common Regional Market.
Overall, North Macedonia is moderately prepared in most of the areas covered by cluster 3
on competitiveness and inclusive growth, including digital transformation and media,
taxation, social policy and employment, and enterprise and industrial policy. The country is
in between a moderate and a good level of preparation in the area of economic and monetary
policy. It has a good level of preparation in the areas of science and research and customs
union. Some progress was made on taxation, economic and monetary policy, enterprise and
industrial policy, science and research policy, social policy and employment. More efforts are
needed, however, particularly in areas where limited progress was made, such as digital
transformation and media, customs union, and education and culture.
8
On cluster 4 on the green agenda and sustainable connectivity, North Macedonia has a
good level of preparation on trans-European networks and some level of preparation on
environment and climate change. The country is moderately prepared on transport and energy
policy with some progress made on energy, particularly on regional gas interconnectors and
on renewables. Substantial efforts are needed in areas where limited progress was achieved,
such as transport, trans-European networks and the protection of the environment. In the
upcoming period, the country needs to accelerate implementation of the Economic and
Investment Plan and of the Green Agenda for the Western Balkans2
.
North Macedonia is moderately prepared in most areas of cluster 5 on resources,
agriculture and cohesion. It has a good level of preparation on food safety, veterinary and
phytosanitary policy and is at an early stage of preparation in financial and budgetary
provisions. Over the reporting period, some progress was made on agriculture and rural
development, fisheries and food safety, veterinary and phytosanitary policy. However, further
efforts are needed, in particular in areas where limited or no progress was made, such as
regional policy and the coordination of structural instruments and financial and budgetary
provisions.
Concerning cluster 6 on external relations, North Macedonia is moderately prepared in the
area of external relations and has reached a good level of preparation on the common foreign
and security policy. The country made some progress during the reporting period on common
commercial policy. It has made good progress by maintaining full alignment with EU
common foreign and security policy. By doing so, North Macedonia has shown itself to be a
reliable partner, including at international level.
On regional cooperation, the country maintained good relations with other enlargement
countries and continued its engagement in regional initiatives. Existing bilateral agreements
need to be implemented in good faith by all parties, including the Prespa Agreement between
North Macedonia and Greece and the Treaty of Friendship, Good-Neighbourliness and
Cooperation with Bulgaria, including its protocols.
1.3. STATE OF PLAY OF THE ACCESSION NEGOTIATIONS
Following the political inter-governmental conference on accession negotiations with North
Macedonia that took place on 19 July 2022, the Commission immediately launched the
screening process, which is progressing smoothly. All sessions on Cluster 1 (Fundamentals)
and Cluster 2 (Internal Market), Cluster 3 (Competitiveness and Inclusive Growth) and
Cluster 4 (Green Agenda and Sustainable Connectivity) have taken place. Explanatory
sessions on Cluster 5 (Resources, Agriculture and Cohesion) and Cluster 6 (External
Relations) have been completed and bilateral sessions on these are ongoing. The remaining
screening meetings are scheduled until December 2023.
2. CLUSTER 1: THE FUNDAMENTALS OF THE ACCESSION PROCESS
2.1. FUNCTIONING OF DEMOCRATIC INSTITUTIONS AND PUBLIC ADMINISTRATION
REFORM
2.1.1. Democracy
The political situation remained polarised, which had an impact on the proper functioning of
democratic institutions.
2
COM(2020) 641 final
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Elections
Overall, the legal framework remains conducive to the organisation of democratic elections
in North Macedonia. However, no progress was made over the reporting period to address
and implement the outstanding recommendations by the OSCE’s Office for Democratic
Institutions and Human Rights (ODIHR) and the Venice Commission. As mentioned
repeatedly in previous reports, electoral legislation should be comprehensively reviewed to
address inconsistencies in a timely, inclusive and transparent manner.
In August 2022, local elections took place for the Tetovo municipal council and mayoral
elections in Centar Zhupa and in Mavrovo-Rostushe. These were conducted in an orderly
manner.
Concerning the legal framework, there was no progress in addressing or implementing any
outstanding OSCE/ODIHR recommendations.
In April 2023, the Ministry of Justice set up a working group on electoral reform tasked with
implementing outstanding OSCE/ODIHR recommendations and ideally drafting a new
Electoral Code. The main opposition party decided not to take part in the working group
officially. The working group has yet to produce any significant outcome. A comprehensive
review of legislation on the electoral process is needed to address existing inconsistencies and
further align the system with European and international standards. A broad consultative
process should underpin this reform. The accuracy of the electoral register should be
improved through systematic checks, reviews and data updates.
Ahead of the next elections, the State Election Commission needs to be allocated the
necessary resources in good time, so that it can carry out its mandate efficiently and
independently.
Parliament
Political polarisation in Parliament deepened further, delaying the adoption of many reform
laws and important appointments. The EU accession negotiation process requires broad
consensus of major political parties. All parties need to start engaging in a constructive and
inclusive political debate, to strengthen the role of Parliament. Excessive and sometimes
inappropriate use was made of fast-track procedures and of the ‘EU flag’ procedure, in some
cases due to the lack of consultations and poor planning of the legislative calendar. The ‘EU
flag’ should be used when directly linked to the adoption of laws whose main goal is aligning
with the EU acquis, and not to short-cut public debate on important issues. Parliamentary
oversight of the executive was regularly exercised through parliamentary questions to
ministers. Parties should spare no efforts to implement long-overdue commitments to internal
reform dating from the third round of the ‘Jean Monnet Dialogue’ in early 2020. Work
continued on establishing criminal responsibility for those who orchestrated or took part in
the violent attack on Parliament on 27 April 2017. Prompt implementation of
recommendations by the Group of States against Corruption is required to increase the
transparency of funding for political parties. Parliament should ensure the timely review of
the statutory reports sent to it by state agencies and bodies.
After some Members of Parliament (MPs) were replaced, the number of women MPs
increased from 50 to 51 out of 120, reaching the highest percentage ever (42.5%). The
number of MPs from non-majority communities decreased (from 42 to 41 out of 120 (34%).
The Alliance for Albanians joined the ruling coalition in March 2023, while Alternativa
moved to the opposition. See Governance.
10
Political dialogue in Parliament suffered from the lack of cross-party consensus, though the
opposition did support some economic, energy and social measures. Parliamentary parties
need to collaborate on the EU accession negotiation process and accelerate implementation of
EU-related reforms. The National Council for EU Integration does not meet frequently. It
held only three sessions including a joint one with the Committee on EU Affairs. Decisive
steps are needed to ensure that the Council fulfils its function as the principal vehicle for
advancing EU integration in Parliament.
Persisting polarisation between the ruling parties and the opposition prevented Parliament
from functioning properly. The main opposition party VMRO-DPMNE3
actively blocked
parliamentary work, which was a significant obstacle to progress in Parliament’s legislative
agenda. Nevertheless, it did participate in some debates on important issues even though it
abstained from the vote, for example on ratification of the Frontex Status Agreement.
Following government coalition reshuffle, the composition of parliamentary bodies was
changed to proportionally reflect the new coalition and to ensure it had a majority in key
bodies. No consensus was reached on long-overdue important appointments. These concern
two new judges for the Constitutional Court, five deputy ombudspersons, members of the
programme council of the public service broadcaster and the Council of the Agency for
Audio and Audiovisual Media Services, and a member of the Commission for Protection and
Prevention against Discrimination. It is imperative that appointments to these positions are
based on merit and not on political grounds.
The law-making process would benefit from more efficient planning and coordination
between the ruling coalition and the opposition. From January 2022 to 15 June 2023, out of
165 laws adopted, 51 were adopted by regular procedure, 86 under shortened procedure and
28 concerned ratification. The opposition criticised the government for misusing the fast-
track ‘EU flag’ procedure for aligning legislation with the EU acquis. The ‘EU flag’
procedure was used, among other things, to amend the Criminal Code by introducing lower
penalties for crimes of corruption, and to amend laws on labour relations, expropriation,
urban planning, construction and highways to be built (notably road corridor VIII and Xd),
despite the fact that the amendments did not generally concern the alignment of existing
legislation with the EU acquis. The use of ‘EU flag’ procedure must be consistent, and
clearly linked to laws aiming primarily at aligning national law with the EU acquis.
Comprehensive consultations should consistently take place, including with the European
Commission. The number of laws adopted by shortened procedure increased from 38 % to
58% at the expense of meaningful debate and inclusive legislative process. The use of fast-
track procedures should be limited. They should not be used to short-cut public consultation
or resolve procedural difficulties in the legislature, or to compensate for poor planning at
government level. See 2.1.2. Public administration reform.
Parliamentary oversight of the executive continued with regular sessions for parliamentary
questions. The executive provided answers to 167 parliamentary written questions received in
2022 and the first quarter of 2023. Two interpellations were not considered during the
reporting period – on the work of the Chairpersons of the Committee on Political System and
Relations among Communities, and the Committee on Elections and Appointments.
Discussions in plenary and relevant committees on the 2021 annual reports from regulatory,
monitoring and supervisory bodies were completed only early 2023.
Implementation of the commitments made during the third round of the ‘Jean Monnet
Dialogue’ in early 2020 remains outstanding. These include amending rules of procedure,
3
Internal Macedonian Revolutionary Organisation – Democratic Party for Macedonian National Unity.
11
for example on the constitutive session, greater governmental oversight, public hearings, the
parliamentary calendar and procedures for ‘EU-flagged’ laws. The working group on the
‘Jean Monnet Dialogue’ convened in November and December 2022 and in June and
September 2023, and agreed on several aspects of the review of legislative procedures. The
rules of procedure should be adopted without further delay to improve the functioning of
Parliament.
As regards the protection of human rights and fundamental freedoms, the permanent
oversight committee remained inactive. The Women Members of Parliament Club organised
the first ever plenary session on gender issues to mark its 20th
anniversary. The inter-party
parliamentary groups on youth; on lesbian, gay, bisexual, transgender, intersex and queer
(LGBTIQ) persons; on persons with disabilities; on Roma4
; and on environment successfully
completed numerous activities, in close cooperation with relevant civil society organisations.
Parliament and government committed to launch and achieve as a matter of priority relevant
constitutional changes, with a view to including in the Constitution citizens who live within
the borders of the state.
A working group tasked with preparing constitutional amendments was established in
April 2023. It was composed of 23 representatives from different political parties, including
four MPs and experts. Opposition parties, including VMRO-DPMNE and Levica, did not
nominate representatives. The working group unanimously approved and submitted a draft
initiative proposing amendments to the government in May 2023. On 18 July, the
government adopted the initiative for constitutional changes, which was submitted to
Parliament. The draft makes provision for the inclusion of six further communities in the
preamble and in two articles of the Constitution, namely Bulgarian people, Croatian people,
Montenegrin people, Slovenian people, Jewish people, and Egyptian people. On 18 August, a
plenary session on the adoption of the initiative to amend the Constitution was held but was
put on hold as the required two-third majority votes could not be ensured.
In May, the Supreme Court rejected a request for a retrial of those convicted for the storming
of Parliament on 27 April 2017. It dismissed, as unfounded, the request for an extraordinary
re-examination of the verdicts of both the Criminal Court and the Court of Appeals.
Action is needed to ensure the transparency of funding for political parties. Action should
include addressing the recommendations made by the Group of States against Corruption
(GRECO). (See Chapter 23 – Judiciary and fundamental rights.) Political parties should
improve their internal democratic processes, including the transparency of elections to party
bodies.
Governance
Since the first political intergovernmental conference opening EU accession negotiations with
North Macedonia in July 2022, the institutions have mobilised significant resources to engage
actively in the screening process, which is proceeding smoothly. The government also
increased its efforts to communicate the practical benefits of EU accession for the citizens.
The government needs to intensify its work to advance the EU reform agenda. Permanent and
decisive steps are required to accelerate implementation of EU reforms and move forward in
the EU accession negotiation process. Cross-party collaboration remains vital in this regard.
The authorities should refrain from adopting ad hoc measures which are not in line with the
4
In line with the terminology of European institutions the umbrella term ‘Roma’ is used here to refer to a
number of different groups, without denying the specificities of these groups.
12
EU acquis and European standards. Inter-ethnic relations remained stable, and the Ohrid
Framework Agreement continued to be implemented.
In March 2023, 65 MPs out of 120 supported the formation of the new government coalition.
The ruling coalition is now composed of SDSM5
, DUI6
and the Alliance for Albanians and is
supported by several smaller political parties. In the government, 25% of ministers, 31% of
deputy ministers, and 29% of state secretaries are women. Women held 15% of the executive
positions in different government bodies and agencies.
After the reshuffle, the key priorities of the government programme for 2022-2024 remained
unchanged. These include sustainable economic growth, social inclusion and human capital
development, rule of law and good governance, promotion of democracy and freedom as well
as NATO and EU integration.
As part of the EU accession negotiation process, relevant national representatives,
coordinated by the Chief Negotiator, actively participated in the screening meetings
organised by the Commission starting in July 2022. Building on the experience of the
screening process, North Macedonia needs to continue strengthening its EU negotiating
structures and achieve sound coordination among line ministries and institutions, while
further developing EU-acquis-related expertise across the public administration.
The inter-ethnic situation remained calm overall, with isolated cases of tension amid
protests in the summer of 2022 against the proposals designed to remove the obstacles to the
opening of EU accession negotiations. The Committee on Inter-Community Relations
continued to foster the multi-ethnic and multi-cultural dimension of the society, notably by
organising intercultural activities among students. The 2001 Ohrid Framework Agreement,
which fosters the multi-ethnic character of the society, continued to be implemented.
There was limited progress as regards reform of local self-government, mostly related to
fiscal decentralisation. However, the fiscal benefits deriving from last year’s amendment to
the Law on financing of local self-government units have not yet been felt by municipalities.
The government should urgently improve the normative and financial framework in line with
the 2021-2026 programme for sustainable local development and decentralisation.
Municipalities have continued to experience severe financial difficulties as a result of
inflation and increased energy costs. The government and the municipalities should consider
setting up a permanent cooperation mechanism with the aim of reviving interinstitutional
dialogue between different levels of government, particularly in relation to the EU accession
negotiations process.
Civil society
Overall, civil society organisations (CSOs) in North Macedonia continue to operate in an
enabling environment. However, the government should increase its efforts to mainstream
civil society engagement in priority areas and consultation activities. CSOs should play an
important role in the reform process and be involved in decision-making processes. Existing
legal and financial frameworks still need to be amended and implemented in practice, notably
to provide consistent mechanisms for awarding public funding to CSOs. There is a need for
the Council for Cooperation between the Government and Civil Society to resume its
activities.
5
Social Democratic Union of Macedonia
6
Democratic Union for Integration
13
Civil society is a key component of any democratic system and is recognised as such by the
state institutions. CSOs continue to operate in an enabling environment. They play a vital role
in promoting and advancing human rights, the rule of law and stability, by being steadfast in
their roles as watchdogs and seeking to take part in decision-making processes. CSOs need to
be consulted on draft legislation more systematically and meaningfully. The role of civil
society in the EU accession negotiation process needs to be strengthened.
The Council for Cooperation between the Government and Civil Society is still the main
structural channel for consulting and involving civil society in policy dialogue and decision-
making. Budget allocations for the annual programme for cooperation with civil society were
not reinstated in the supplement to the 2022 budget. This contradicts the policy aims of the
strategy of cooperation with civil society 2022-2024. CSOs have boycotted the work of the
Council since March 2022 as a result of the government decision to transfer funds for
financing of CSOs from the General Secretariat to the Ministry of Political System and
Relations among the Communities. There is a need to rebuild trust and cooperation. The role
of the Council and of the relevant unit within the General Secretariat of the government needs
to be enhanced.
Implementation of the strategy for cooperation with and development of civil society 2022-
2024 is ongoing, although an effective monitoring framework is needed to check on its
implementation. Local authorities need to be more proactive and to develop a consistent
approach to involving CSOs in policymaking at local level.
Civilian oversight of the security/intelligence sector
The parliamentary committees that oversee the intelligence services held several meetings,
but further efforts are needed to improve their efficiency.
The Special Department for investigation and prosecution of crimes committed by persons
with police powers and members of the prison police is operational. However, the lack of
sufficient staff hampers its efficiency.
The civil control mechanism is composed only of the representative of the Ombudsman’s
Office. Parliament has not selected the civil associations, which should be part of the
mechanism.
The Council for Civilian Supervision, which is regulated by the Law on interception of
communication, has not been set up in practice. In July 2023, Parliament adopted
Amendments to the Law necessary for operationalising the Council for Civilian Supervision.
2.1.2. Public administration reform
North Macedonia is moderately prepared in the reform of its public administration.
Limited progress was made in the reporting period with the adoption of the new public
administration reform strategy and the accompanying action plan in July 2023. Despite
having started the process 5 years ago, the country still has not adopted the revised
legislative framework for human resources management, which includes the revised law on
administrative servants and the law on public sector employees and new legal provisions on
top level of management. The new framework should improve human resources
management across the administration and help ensure merit-based recruitments, promotions
and dismissals at all levels, including senior management. Legislation has not yet taken on
board the State Commission for the Prevention of Corruption’s recommendations on
nepotism, cronyism and political influence in the recruitment of public sector employees and
in the appointment of members of supervisory and management boards. Improvements in
14
accountability in the public administration are undermined by the failure to adopt the new
law on state organisation. There are ongoing efforts to improve delivery of services to
citizens and businesses.
As last year’s recommendations were only partially addressed, they remain valid. In the
coming period, the country should, in particular:
→ adopt and start implementing the revised law on administrative servants, the revised law
on public service employees and the legal provisions on top management service;
→ adopt and start implementing the law on state organisation and other related laws in line
with the recommendations on the new organisation of state administrative bodies;
→ ensure full implementation of the law on general administrative procedures by
completing the digitalisation of institutions' registers and data exchange, and simplifying
electronic procedures.
Strategic framework for public administration reform
The new 2023-2030 public administration strategy and its accompanying action plan were
adopted in July 2023. Several actions have been carried over from the previous strategy
without any mitigation measures proposed despite past challenges with their implementation.
Measures planned for the first year of the 2022-2025 public financial management reform
programme fell behind schedule due to delays in the adoption of key legislation. The high-
level Public Administration Reform Council met once during the reporting period. There is
insufficient political support, leadership and supervision of reforms. The Ministry of
Information Society and Administration does not have sufficient human resources to drive
forward the reforms at technical level. National funding for the public administration reform
strategy and the public financial management reform needs to be increased as key reform
activities are still largely dependent on donor support.
Policy development and coordination
A legal framework and institutional structures for a coherent policymaking system are in
place. However, further efforts are needed to clarify the responsibilities of policymaking
institutions, ensure their proper functioning and streamline reporting lines. Medium-term
budgetary planning and fiscal policies remain consistent with the government’s strategic
priorities. The central coordination and quality control role of the General Secretariat slightly
improved, but remains insufficient. No regular update or reports on the implementation of the
2021-2025 national programme for the adoption of the acquis have been forthcoming.
Evidence-based policymaking and legislative development have been partially successful.
However, certain pieces of adopted legislation, such as the Law on construction of corridors
VIII and X-d, to be implemented by Bechtel Enka, conflict with parts of the legal framework
and with international commitments. Many institutions have not yet digitalised their registers.
The sharing of administrative data needs to be expanded and data need to be simplified in
order to better inform policymaking and new legislation. Regulatory impact assessments
continued to be carried out only as a formality, rather than as an assessment of the potential
impact of new laws. Efforts to improve the use and quality of regulatory impact assessments
continued, in particular for budgetary impact assessment. However, the Ministry of
Information Society and Administration has insufficient resources to ensure effective and
consistent quality control.
The national electronic consultation system is an inclusive one, enabling all stakeholders to
participate in public consultations. However, it is not used to its full potential, in particular
15
by citizens and businesses. Quality control, feedback and follow-up to the public consultation
process need to be improved. The share of laws adopted under shortened procedures went up
to 58% 2022. These laws did not undergo a proper public consultation process and were not
regularly accompanied by impact assessments. The quality of legislative drafting also needs
to improve. Frequent legislative amendments create legal uncertainty and impede proper
implementation. Abuse of the use of the ‘EU flag’ procedure continued. The ‘EU flag’ should
only be used when directly linked to the adoption of laws whose main goal is aligning with
the EU acquis (see 2.1.1 Democracy).
Public scrutiny of government work is supported by regular government press releases.
However, the publication of the agendas and minutes of government sessions was
occasionally delayed. Documents adopted at government sessions are not published
consistently. Moreover, the government has failed to publish annual reports on its work for
the years 2020, 2021 and 2022.
Public financial management
In June 2022, the government adopted a new public financial management reform
programme for 2022-2025. The programme is made up of eight pillars. In April 2023, the
government published the first annual monitoring report for 2022 and draft action plan for
2023. This report revealed poor implementation and results, suggesting that planning needs to
be more realistic.
In September 2022, the Organic Budget Law (OBL) was adopted by the Parliament. The law
provides a legal foundation for several key public financial management reforms, including
strengthening medium-term budget preparation, reviewing budget classifications and putting
in place an Integrated Financial Management Information System. The OBL also aims to
make the fiscal strategy more comprehensive and to develop a broader system to monitor
fiscal risks, including for state-owned enterprises and municipalities. The public financial
management reform agenda has gained momentum after the adoption of the OBL but
progress is still slow in several key reform areas.
The Ministry of Finance continued to improve the transparency of public finance
management by publishing data on the revenue and expenditure of public institutions, local
governments and state-owned companies every quarter. The human resources capacity of the
Ministry of Finance remains limited.
The Ministry of Finance must invest further in increasing public participation at every phase
of budget preparation, execution and reporting. Budgetary transparency and public
expenditure effectiveness need to increase further through the efficient implementation of
the OBL.
Public service and human resources management
No progress was made on the adoption of the long-awaited revised legislation on
administrative servants and on public sector employees, or on the new legislation on top
levels of management, aimed at ensuring merit-based recruitment and fair promotions and
dismissals. The regular amendments to the laws on administrative servants and on public
sector employees since their adoption in 2014 have led to an inconsistent application of
recruitment and promotion procedures across the public sector. Contradictory rules in the law
on internal affairs and other sectoral laws allow employees in these sectors to be excluded
from the scope of the law on administrative servants. Moreover, the administration still uses
procedures to convert temporary or service employment contracts into permanent ones.
16
The supreme audit institution found irregularities and the misuse of the IT system for testing
candidates for positions in the public administration. The performance appraisal system,
although established on paper, is still not systematically used. In addition, insufficient
transparency on the grounds for dismissal of civil servants continues, and data on dismissals
of non-managerial staff is lacking. Proper follow-up to the recommendations of the State
Commission for Prevention of Corruption on improving public sector recruitment procedures
should be ensured. The national authorities need to develop a retention policy for the public
administration in order to avoid further losses of valuable expertise and a decline in
administrative capacity. A large number of vacancies in senior ranks were not filled via
competitive procedures (18 vacancies) but by appointing acting managers (40 appointments).
The Ministry of Information Society and Administration is responsible for coordinating and
monitoring human resources management across the public administration. The number of
institutions using the human resources management information system has increased.
Reports from individual state audit institutions indicate that some public service employees
still receive a salary despite not having a formal assignment and without having to show up
for work. Initiatives have been launched to revise the remuneration system to ensure more
consistent levels of pay and to promote mobility. Some institutions have developed legal
solutions allowing a unilateral increase of salaries for some staff categories. The practice of
paying salary supplements continued under the 2022 and 2023 budget execution laws.
Nevertheless, the turnover rates of staff working on the management of EU funds puts in
question the effectiveness of these measures.
On 31 December 2022, women represented 56.29% of all public service employees according
to the register of public sector employees, not including staff of institutions such as the army
and law enforcement agencies. Concerns remain over the percentages applied in the formula
of ‘BalancER’ - a human resources tool that determines the proportion of public employees
from each ethnic group. The revised formula includes the non-resident population and does
not take into account the percentage of citizens that have not declared their ethnicity in the
census. The transfer of employees from the Ministry of Political System and Relations
between Communities to various institutions has not yet been completed. Furthermore, the
ministry conducted a new recruitment procedure aiming to deploy the new recruits to various
institutions.
On professional development, there is still no centralised database of all training provided
by the various institutions and projects. Integrity guidelines were developed at both central
and local level. Whistle-blower legislation is in place, but the protection of whistle-blowers
needs to be improved. According to the annual report of the State Commission for Prevention
of Corruption, the institutions reported 24 instances involving whistle-blowers in 2022 and
sent 10 reports directly to the State Commission.
Accountability of the administration
The reorganisation of central government institutions, which aims to streamline the
institutional framework, eliminate overlapping powers, improve the administration’s
efficiency and improve lines of accountability, was delayed due to the new law on state
organisation not yet being adopted. This also held back the reorganisation of the three pilot
ministerial systems. Delegating decision-making authority to middle management remains
limited both at central and local level. Continued efforts are needed to efficiently mainstream
managerial accountability across the entire public administration (see chapter 32 - Financial
control).
17
Legislation on scrutiny by independent oversight bodies, in particular the State Audit
Office and the Ombudsperson, is in place. There needs to be a more systematic follow-up to
their findings and recommendations, both by the government in addressing shortcomings and
preventing further irregularities (see e.g. chapter 20 - Enterprise and Industrial Policy,
chapter 25 - Science and Research and chapter 15 - Energy), and by law enforcement
agencies in prosecuting offences. Citizens’ right to access public information is embedded
in legislation. The proactive disclosure of information and datasets on official websites needs
to be further encouraged, in particular at local level. The Agency for Protection of Free
Access to Public Information processes lodged appeals promptly and proactively monitors
information holders despite limited funding.
The legal framework for citizens’ rights to good administration is in place, both as regards
administrative justice and judicial review. In practice, however, administrative disputes
continue to face unreasonable delays. Appeal procedures are complex and lengthy, consisting
of several appeal layers. There are repetitions of procedures, as most decisions are based on
procedural considerations and not on merit. Delays continue to occur in enforcing
Administrative Court rulings by the respective institutions. The legislation lays down
citizens’ rights to seek compensation and the liability of public authorities in cases of
wrongdoing.
Service delivery to citizens and businesses
On user-oriented service delivery, legislation and IT infrastructure allow most
administrative services to be offered both online and offline – through the national e-portal
for services, including facilities for people with special needs. The update of the portal with
135 new services should be completed. Currently, the number of digital services available to
citizens is symbolic and mainly consists of services that are rarely requested with the most
common services, such as issuing of personal documents, not yet available online. Even
offline, these basic services have deteriorated with additional administrative requirements
from citizens. The quality of data in the population register needs to improve as it is the
country's principal register. The legislation on an interoperability framework is not updated in
line with the latest EU standards, while the tool itself is not used to its full potential by the
relevant institutions, which is an obstacle for progress on provision of digital services. North
Macedonia should ensure alignment with both the European Interoperability Framework
(latest revision in 2017) and the Interoperable Europe Act (2022).
No progress was made on simplifying administrative procedures. The law on general
administrative procedures is still not systematically implemented across the administration.
2.2. RULE OF LAW AND FUNDAMENTAL RIGHTS
2.2.1. Chapter 23: Judiciary and fundamental rights
The EU’s founding values include the rule of law and respect for human rights. An effective
(independent, high-quality and efficient) judicial system and an effective fight against
corruption are of paramount importance, as is the respect for fundamental rights in law and
in practice.
North Macedonia has in between some and moderate level of preparation to apply the EU
acquis and European standards in this area. Overall, there was no progress on strengthening
judicial independence and improving the legal framework for fundamental rights protection.
18
Functioning of the judiciary
The judicial system of North Macedonia is in between some and moderate level of
preparation. There was no progress in the field of the judiciary during the reporting period.
The Judicial Council should strive to protect the integrity and independence of judges and
institutions and should resist any external influence. The controversial dismissal of the
President of the Judicial Council raised concerns about undue political influence. The
adoption of a new judicial reform strategy is behind schedule. It should aim to improve the
performance of institutions. Progress on implementation of the human resources strategies for
the judiciary and prosecution services was limited. The lack of measures to address the
impact of scheduled retirements affected efficiency. Most promotions for higher courts faced
further delays. Work continued on upgrading the automated court case management
information system (ACCMIS) for random distribution of cases in courts. A similar system
was introduced in the Public Prosecutor’s Office.
The Commission’s recommendations from last year have not been implemented and remain
valid. In the coming year, the country should in particular:
→ complete the implementation of the judicial reform strategy and the updated action plan,
with a specific focus on adopting a new Law on civil procedure, in line with European
standards and prepare the new strategy on judicial reform (2023-2027) without delay;
→ revise the legislative framework and overall functioning of the Judicial Council to
enhance its transparency and independence and step up the implementation of the human
resources strategies for the judiciary and the prosecution;
→ ensure that ACCMIS is fully functional and compatible with level of complexity of court
cases and the method for assessing judges and presidents of courts.
Strategic documents
According to the 2022 assessment report on implementation of the judicial reform strategy
(2017-2022), out of 227 activities, 140 have been fully implemented, 18 are ongoing, 14 are
delayed, 43 require continuous implementation, 6 concern legislative measures that are
pending in Parliament, and 6 were abandoned due to a change in the approach. The process to
adopt the new judicial reform strategy for 2023-2027, which started in September 2022, is
delayed. Implementation of the Law on the Public Prosecutor’s Office continued. Limited
progress was made in implementing the strategies for human resources management in the
courts and in the Public Prosecutor’s Offices.
Management bodies
There are serious concerns about undue external influence over the work of the Judicial
Council and judiciary. In November 2022, the President of the Judicial Council resigned to
protest against alleged attempts to exert undue influence from within the judiciary and the
business community. The new President, who took office in December 2022, was demoted in
April 2023 through a controversial procedure, raising questions about respect for laws and
procedures. Civil society organisations and legal scholars condemned this unprecedented step
and called on all members of the Council to resign. The demoted President continued to serve
as a member of the Council. In May, she filed a lawsuit with the Administrative Court
challenging the legality of her demotion, and a criminal report with the Skopje Basic Public
Prosecutor’s Office against some of her Judicial Council peers for misuse of official duty and
authorisation. Two members of the Judicial Council, judges elected by their peers, resigned in
June 2023. One explained that she was resigning over the unlawful and non-transparent
19
demotion of the former President, and disagreement with some of the Council's stances. The
other announced that he would contribute better if serving as a judge. In July, judges elected
two new members, one of whom, a judge of the Supreme Court, resigned shortly afterwards
citing personal reasons. Attempts by the new President to limit the presence of camera crews
to Council sessions ceased after interventions of several CSOs and the Judicial Media
Council. According to the Corruption Risk Assessment of the Judiciary, published in June
2023, 72% of the judges interviewed either fully disagree (27%) or partially disagree (45%)
that the Judicial Council effectively safeguards judicial independence. Only 26% agree.
In March 2023, the Constitutional Court annulled two articles of the Law on the Judicial
Council, thus allowing all Council members, and not only those elected by Parliament, to be
elected as president or deputy. The new President and his Deputy, elected in May and June
2023, are both judges. In October 2022, the Judicial Council adopted a code of ethics for its
members. In December, the Council amended its rules of procedure to better regulate
procedures for determining the responsibility of a judge or a president of court. Transparency
in the Council decision-making process should increase.
In February and April 2023, prosecutors elected two new members to the Council of Public
Prosecutors (CPP). Parliament, with a delay, elected two members of the CPP. In November
2022, over 160 public prosecutors throughout the country, directly elected the new Head of
the Public Prosecutor’s Office for Prosecuting Organised Crime and Corruption (OCCPPO),
applying for the first time the 2020 Law on the Public Prosecutor’s Office and amendments
to the Law on the CPP. The election did not help to build public trust in the transparency of
the process, given that no qualifying criteria were set at the outset and serious concerns about
possible external influence in the process were raised. The CPP improved its transparency by
making sessions available on social media platforms but stills needs to provide reasoning for
its decisions. The media have regular access to the Council but limited physical space in
Council sessions is a constraint. The budget allocation for the Council increased but it
remains understaffed and lacks IT resources to perform its tasks effectively.
Independence and impartiality
Judicial independence is enshrined in the Constitution. Both the Judicial Council and the CPP
need to act decisively to promote and safeguard the independence, integrity and
professionalism of judges and prosecutors. Further efforts are needed to increase transparency
and prevent any attempt to exert undue influence or intimidation. The implementation of the
Declaration on Open Judiciary, signed in March 2022 by 12 different judicial institutions,
CSOs and professional associations, led by the Supreme Court, continued and helped to
improve transparency in the judiciary. The Judicial Media Council adopted a two-year work
plan focusing on preparation of its communication strategy and conducted training on
communication skills for 40 judges and courts’ spokespersons. Political actors should refrain
from publicly commenting on judicial proceedings. The Commission for the supervision of
the functionality of the automated court case management information system carried out
9 out of 19 supervisions planned for 2022. A system for electronic distribution of cases in the
Public Prosecutor’s Office became operational in January 2023. Reliable statistical data are
needed on the performance of the judiciary and the prosecution service, in line with the
recommendations and methodology of the European Commission for the Efficiency of
Justice (CEPEJ) (a Council of Europe body).
Accountability
The Association of Judges' Advisory Body for Judicial Ethics received no new requests for
opinions.
20
In 2022, the Judicial Council received 72 requests to determine the responsibility of
144 judges or presidents of court. It dismissed 5 judges. The Judicial Council issued a written
reprimand to 2 judges and fined a court president and a judge. The CPP dismissed
1 prosecutor and, at their own request, ended the tenure of 2 prosecutors against whom it had
initiated disciplinary proceedings. 4 judges were dismissed for reasons relating to
unprofessional performance, and 1 for a severe disciplinary offence. According to opinion
polls, public trust in the judiciary dropped to the lowest level ever (around 8%).
In 2022, the State Commission for the Prevention of Corruption issued 11 misdemeanour
payment orders against 6 judges, 3 court presidents and 2 prosecutors for failing to submit
asset declarations or reports on the change of their property status and interests.
Professionalism and competence
The Judicial Council elected four court presidents, two Supreme Court judges, two Court of
Appeal judges in Gostivar, 27 basic court judges and one court president. The Council
assigned 17 judges to serve in different courts for a one-year period. Elections to the higher
courts were further delayed by some attempts to interfere in the process of appointing judges
and by the lack of an accredited company to perform psychological and integrity tests for
candidate judges.
The CPP appointed two prosecutors in the State Public Prosecutor's Office (PPO), four in the
higher PPOs, two heads of basic PPOs and two new prosecutors to the Public Prosecutor’s
Office for Prosecuting Organised Crime and Corruption (OCCPPO). In 2022, a total of 5 574
professionals participated in 227 in-service training sessions organised by the Academy for
Judges and Prosecutors.
Quality of justice
The new Law on the Academy for Judges and Prosecutors, adopted in June 2023
maintained the Academy as the sole entry point to the judiciary and prosecution service, and
heeded the European Commission’s recommendation not to shorten initial training. In
anticipation of the adoption of the Law, the Academy informed the candidates for the ninth
intake that the entry qualification exam scheduled for 29 May to 4 June would be postponed,
as the new Law sets a different order for entry tests.
The 57 graduates from the seventh intake were recruited in basic courts and PPOs. The
Judicial Council published a vacancy in June 2023. The CPP elected 18 prosecutors and
published a new vacancy. The Academy continued its active cooperation with the European
Judicial Training Network and the Academy for European Law. The total budget for training
initiatives in 2022 amounted to EUR 1.74 million, a 46.3% increase compared to the previous
year. One interpreter was recruited.
The Supreme Court and the four Courts of Appeal contributed to the consistency of
judgments and harmonised court practices. They focused on reviewing high-profile cases
and cases of public interest. The Supreme Court, upon an initiative of its President, adopted a
principled stance that all courts should publish their decisions, whether final or not, on their
websites. The Court also adopted a principled stance on the direct application of the
Constitution and the European Convention on Human Rights in appeals procedures against
decisions of the Judicial Council on the dismissal of judges or court presidents. The Supreme
Court adopted and published 17 additional principled legal opinions, stances and conclusions.
At the end of 2022, there were 409 judges, (22.3 per 100 000 inhabitants) 61.3% of whom
were female and 157 prosecutors (8.5 per 100 000 inhabitants), 55% of whom were female.
According to CEPEJ, the European averages are 22.2 judges and 18.8 prosecutors per
21
100 000 inhabitants. The 2022 budgetary allocation for the judicial system was about
EUR 83.5 million. Scheduled retirements were one of the factors driving numbers down:
64 judges and 16 prosecutors retired (48 retired judges and 11 prosecutors in 2022). It
remains crucial to speed up implementation of the human resources strategies for the courts
and public prosecutors’ offices and to plan ahead for staffing needs. The Council for
Digitalisation in the Judiciary continued to implement the IT strategy. To recruit additional IT
staff, the judiciary will have to offer working conditions comparable with those in the private
sector.
There are 46 licensed mediators. In 2022, a mediation agreement was reached in 397 out of
918 cases, and 121 are ongoing. The relevant chambers, the Academy for Judges and
Prosecutors and the Association of Judges, should continue to promote of mediation and
other alternative dispute resolution methods. The body tasked with assessing and ensuring
the quality of mediation is the National Council for Mediation, which is not yet functional.
Efficiency
Efficiency of the judiciary was affected by the Judicial Council's lateness in electing new
judges, and by limited progress in the implementing a human resources strategy in the courts,
which would include setting up a new network of courts.
The average clearance rate for the basic courts dropped from 100.8% to 97.8%. The number
of unfinished cases under the old procedural laws increased. No efforts were made to address
the Venice Commission recommendations to re-examine the provisions of the Law on the use
of languages related to bilingualism in judicial proceedings. The Constitutional Court's
decision to annul two articles of the Law on salaries and emoluments of elected and
appointed persons resulted in an increase of salaries for judges and prosecutors. A systemic
solution has yet to be found to the issue of salaries in the judiciary, considered inadequate. No
steps were taken to reduce the overall cost and duration of the enforcement process (the
bailiff’s services).
Fight against corruption
The country is in between some and moderate level of preparation in the prevention and
fight against corruption. No progress was made. Corruption remains prevalent in many areas
and is an issue of concern. Delays and reversals in trials of high-level corruption cases
increased, resulting some cases in the expiration of the statute of limitations. The Criminal
Code was amended through an expedited parliamentary procedure. The maximum legal
penalties for specific corruption-related criminal offences were reduced, having implications
on the application of the statute of limitations and affecting, halting or even terminating, a
large number of high-level corruption cases, including from the former Special Public
Prosecutor’s Office (SPO). The amendments also hamper the authorities’ ability to
investigate and prosecute such offences. This is a matter of serious concern.
The State Commission for the Prevention of Corruption was proactive in providing public
institutions with policy guidance on preventing corruption. It opened several cases, but its
recommendations need to be effectively followed up on. Efforts to improve the functioning of
the State Commission for the Prevention of Corruption should continue, especially by
allocating additional funding for the recruitment of specialist staff. Additional human
resources and financial means should also be made available to the PPO, investigative centres
and law enforcements units in charge of investigating corruption. The sectors most vulnerable
to corruption require targeted risk assessments and dedicated actions.
22
Last year’s recommendations have not been fully addressed and remain valid. In the coming
year, the country should in particular:
→ enhance implementation of the national strategy for the prevention of corruption and
conflict of interests and properly implement GRECO’s recommendations;
→ allocate sufficient human and financial resources, including financial experts, to the
Office of the Basic Public Prosecutor for Organised Crime and Corruption to ensure
effective accountability in high-level corruption cases;
→ improve its track record in high-level corruption cases – with timely, professional and
transparent proactive investigations, prosecutions, final convictions and recovery,
including confiscation of criminal assets, value-based confiscation, extended confiscation
and third-party confiscation.
Track record
North Macedonia continues to investigate, prosecute and try corruption cases, including high-
level corruption cases. There are concerns about patterns emerging from, but not limited to,
several cases previously dealt with by the former Special Prosecutor’s Office after first-
instance verdicts have been delivered. These include an increasing number of delays and
reversals, resulting in the expiration of the statute of limitations in some cases. The most
frequent reasons for postponement include the absence of defendants or defence counsel,
prosecutors, mainly due to health issues, and members of trial panels, when these are
appointed to another court. Judges must proactively and efficiently manage their cases to
ensure timely justice. Judicial accountability should be ensured in this respect.
The cases of the former Special Prosecutor’s Office continued to be tried mostly by the
Public Prosecutor’s Office for Prosecuting Organised Crime and Corruption (OCCPPO). So
far, there have been final convictions in 12 high-level corruption cases. First-instance
verdicts were issued in 37 high-level corruption cases. In the 27 former SPO cases to be tried
by the OCCPPO, there have been final convictions in six cases while trials are ongoing for
most of the remaining ones. In 2022, the OCCPPO opened 39 cases of alleged corruption
against 148 individuals and 6 legal entities. The September 2023 amendments to the Criminal
Code are cause of serious concern because of their impact on former SPO cases, since a large
part of the cases pertained to the offences whose provisions were altered. The reduced
statutes of limitations affect, halt or even lead to the termination, of a large number of cases.
Since the amendments took effect mid-September, some former SPO case have already been
terminated, or had hearings postponed because the charges were no longer valid, or the
statute of limitations had expired.
In 2022, 12 investigations were opened, charges were filed in four cases against
20 individuals. One is a high-profile case against a former Secretary General of the
Government, for abuse of an official position.
In 2022, 16 first-instance judgments were handed down against 62 individuals. and 8 second-
instance judgments were issued against 40 individuals.
In 2022, 35 criminal sentences were passed (compared with 23 in 2021). In these cases,
six individuals (14 in 2021) were sentenced to prison, while 29 (nine in 2021) received
suspended sentences.
The State Commission for the Prevention of Corruption continued to fulfil its role and
opened several new cases. In 2022, the SCPC processed a total of 145 cases (106 in 2021) of
alleged conflict of interest, of which 27 (17 in 2021) were initiated by the SCPC itself and
23
118 (89 in 2021) at the request of other parties. In 2022, 161 cases were closed (152 in 2021),
of which 18 dated from 2019, 20 from 2020 and 53 from 2021. In 2022, a conflict of interest
was established in six cases (two in 2021). Initiatives were submitted to the competent
authority calling on it to determine responsibility, resulting in two disciplinary procedures.
The SCPC issued opinions on 87 out of the 88 requests it received. In 2022, the SCPC found
grounds for suspecting breaches of the Law on the prevention of corruption and conflict of
interest, resulting in 37 misdemeanour payment orders (32 in 2021).
The SCPC also submitted three requests to the SCPC Misdemeanour Commission to initiate
misdemeanour proceedings against public officials. As regards irregularities in asset
declarations, in 2022, the SCPC issued 372 misdemeanour payment orders (86 in 2021), of
which 367 related to fines for offences committed under Article 82 of the Civil Code, and
5 to failure to report an increase in property. In January 2023, the SCPC adopted an annual
plan to monitor property ownership and other interests, involving 21 officials: 5 prosecutors,
5 judges, 6 MPs and 5 public office holders in the government.
In 2022, 583 cases of corruption were initiated (599 in 2021), 20 at the initiative of the
SCPC (16 in 2021), and 563 based on reports submitted by third parties (583 in 2021). Of the
cases initiated, 560 were addressed (404 in 2021). Of the cases submitted on the basis of
reports, the SCPC found grounds for suspected breaches of the Criminal Code in 12 (11 in
2021) and submitted initiatives to the public prosecutor in all 12 cases. The SCPC launched
initiatives asking the competent authorities to ascertain which officials were responsible for
what breaches in 6 cases (5 in 2021). In addition, 12 recommendations and 2 indications were
submitted to state institutions and authorities calling on them to take specific measures in
response to the circumstances ascertained.
GRECO’s Fourth Round Evaluation Report on the prevention of corruption in respect of
Members of Parliament, judges and prosecutors contained 19 recommendations for North
Macedonia. In its report on implementing these recommendations, GRECO concluded that
nine of the 19 recommendations had been implemented (or dealt with) satisfactorily, 9 had
been partly implemented and 1 had not been implemented. In March 2023, North Macedonia
submitted a situational report to GRECO on the measures taken to implement the remaining
recommendations.
The Parliamentary Committee on Issues of Rules of Procedure and Immunity adopted a
training curriculum for a code of ethics workshop for Members of Parliament, as
recommended by GRECO.
In June 2023, GRECO adopted the second compliance report on preventing corruption and
promoting integrity (as part of the Fifth Evaluation Round), which concluded that 13 of the
23 recommendations had been implemented satisfactorily, 9 partially implemented and 1 not
implemented.
Institutional framework
Preventive measures
The Law on the prevention of corruption and conflict of interest needs to be fully
implemented. The SCPC continued to fulfil its role in providing policy advice to public
institutions proactively.
The SCPC needs to further strengthen its capacity to instigates initiatives before the
competent authorities at its own initiative, identifying possible wrongdoings not yet reported
in the media. Too often, the conclusions of the SCPC reports are not followed up by the
institutions concerned. The SCPC's ability to verify declarations of interest and asset
24
declarations is limited because the data is not systematically cross-checked with the data
recorded in the cadastre (property register) or held by other relevant institutions. Cross-
checks are only carried out on the asset declarations of around 20 officials a year, selected
according to specific criteria.
By the end of 2022, the number of SCPC staff had increased from 34 in 2021 to 48
(compared with the 64 planned). The 2023 SCPC budget also increased by approximately
15% compared to the 2022 budget, mainly thanks to support from donors. Further action is
needed to strengthen and support the SCPC, and to make sure it is adequately resourced. The
SCPC would benefit from specialist staff with investigative experience, for more effective
verification of asset declarations. Furthermore, the SCPC should be strengthened to allow for
an exchange of information with neighbouring countries. New IT software solutions are in
place to increase information-sharing with all public institutions for the prevention of
corruption and to increase integrity in the public sector, provide protection for whistle-
blowers and monitor implementation of the national strategy for the prevention of corruption.
Software enabling communication between the IT systems of the cadastre, the Revenue
Service, the Ministry of the Interior and the central register must be operational on time and
must enable more effective checks of asset declarations. Efforts continue to improve the
transparency and integrity of public institutions. The SCPC adopted an integrity policy with
guidelines for state bodies and public sector institutions, and guidelines for local self-
government. As of the end of 2022, a total of 85 institutions had signed an integrity policy
and appointed contact persons on these issues (18 state bodies and public sector institutions
and 67 local authorities).
Training on integrity was organised for ministries, state bodies and local authorities. A
training centre was set up within the SCPC. The SCPC is also working on software solutions
for trainings, and public awareness-raising campaigns were organised on integrity, on
whistle-blower protection, and more generally on the fight against corruption.
In 2022, the Ministry of the Interior adopted its regular internal anti-corruption programme
with an action plan and provided training on related topics for staff members.
Law enforcement
The main law enforcement institutions dealing with corruption are the Public Prosecutor’s
Office for Prosecuting Organised Crime and Corruption (OCCPPO) within the Public
Prosecutor’s Office and the Department for Serious and Organised Crime within the Ministry
of the Interior. The OCCPPO inherited most of the former Special Prosecutor’s Office high-
profile cases. The OCCPPO has not yet moved to its new premises. Budget and staffing
levels are still insufficient to effectively tackle cases of corruption and organised crime.
Currently, the OCCPPO is working with 14 prosecutors. This is still not enough given the
OCCPPO’s wide range of responsibilities. There are 4 investigators, 9 associates and
16 support staff assisting the prosecutors but no financial experts or analysts. The Office still
lacks strategic planning in handling investigations and cases, which affects its overall
efficiency. The Office could be more efficient, if more specialisations were introduced and if
resources were focused on the most complicated cases.
At the end of 2022, the OCCPPO signed cooperation agreements with the Central Registry
and the Real Estate Cadastre Agency allowing it direct access to their databases. Similar
agreements need to be concluded with the Association of Banks, the Ministry of the Interior
and the Employment Agency. The OCCPPO should increase cooperation, information-
sharing and follow-up to SCPC’s initiatives and recommendations.
25
The State Audit Office, investigative centre/judicial police in the PPO and the police all lack
sufficient resources to pursue high-profile cases. Limited and partially inadequate technical
equipment and facilities remain a central problem. The quality and efficiency of
investigations need to improve. Moreover, in many cases there is a need for investigations to
be accompanied by parallel financial investigations into persons and companies suspected of
involvement in wrongdoing. Limited use is made of freezing and confiscation mechanisms.
To increase the number of financial investigations, the prosecution service should be
allocated appropriate financial and human resources, the relevant institutions should
coordinate with each other more and have better access to integrated databases.
The State Audit Office carries out ex post checks and publishes annual reports on its website.
In November 2022, the State Audit Office sent the Public Prosecutor’s Office two requests
for them to take action in response to alleged irregularities which came to light during the
audit of two participants in the election campaign. No requests for public prosecutorial action
were submitted following the audit performed on political parties’ financial statements and
accounts. The State Audit Office produces quality audit reports, in which it identifies key
findings and gives appropriate recommendations, which the authorities should follow up on
systematically.
Legal framework
The country is party to all international anti-corruption conventions, including the United
Nations Convention against Corruption.
The Law on the financing of political parties stipulates how funding can be provided to
political parties and managed correctly. The Electoral Code sets out the rules on the financing
of electoral campaigns. The Law on free access to public information allows applicants to
obtain information on the public financing of political parties. The Law on lobbying entered
into force in June 2022. The Law extends the role of the SCPC adding the responsibility to
keep a register of lobbyists and lobbying organisations. No organisations have been
registered to date. The Law on the protection of whistle-blowers still needs to be further
aligned with the EU acquis.
In September 2023, Parliament adopted amendments to the Criminal Code through an
expedited procedure, which prevented the comprehensive consultations with domestic
stakeholders and the European Commission prior to their adoption. Whilst some changes on
strengthening confiscation measures can be considered as limited improvements, these should
be paired with strong legal and procedural safeguards, as well as functioning tracing,
freezing, and management measures for an effective national asset recovery system. Other
amendments, in relation to specific corruption-related criminal offences, are of concern since
they reduce the maximum legal penalties, have implications on the statute of limitations, and
delete a specific category of offences, notably abuse of office in public procurement. In
addition, the amendments raise serious concerns as they also affect the applicable criminal
procedures, limiting the scope of investigations, and thus hampering the authorities’ ability to
effectively prosecute high level corruption cases.
Strategic framework
Implementation of the national strategy for the prevention of corruption and conflict of
interest (2021-2025) and the related action plan continues to proceed very slow, indicating an
overall lack of commitment and sense of ownership from the institutions concerned. Only
10% of the activities planned for 2022 were implemented in full, 35% are ongoing, 55% have
not been implemented. This is a significant decrease from the previous year when 20% of the
26
activities planned for 2021 were implemented in full, 27% were ongoing and 59% were not
implemented. Parliament has yet to discuss the report on implementation of the strategy in
2021 and the SCPC report on the 2021 local elections.
Fundamental rights
The legal framework on the protection of fundamental rights is partially aligned with the EU
acquis and European standards on fundamental rights. The country continues to meet its
general obligations on fundamental rights, but legislation should be implemented in a
systematic manner. Some significant amendments were made to the Criminal Code regulating
criminal acts of gender-based violence. Parliament should make appointments to independent
and regulatory bodies based on merit. The functional independence of human rights bodies
must be guaranteed at all times. This means, amongst other things, allocating sufficient funds.
Services for victims of gender-based violence still need improvement – and proper budgeting
– to meet the standards laid down by the Istanbul Convention. Persons with disabilities
continue to face direct and indirect discrimination, social exclusion and barriers. The
Ombudsman’s Office and the Commission for the Prevention and Protection against
Discrimination signed a memorandum of understanding to formalise their coordination. The
situation in prisons is still dire. The recommendations made by the European Committee for
the Prevention of Torture on the treatment of detained and convicted persons were not
addressed, which is a matter of serious concern. Detention conditions should be improved
with the utmost urgency. Special attention should be given to promoting non-discrimination,
increasing effectiveness in addressing hate crime and hate speech, strengthening the capacity
and independence of institutions in charge of the protection of rights of persons belonging to
minorities or communities. The Agency for Community Rights Realisation needs to receive
sufficient funding to further promote the protection of minorities and the implementation of
the national strategy ‘One Society for All and Interculturalism’. The external oversight
mechanism for the police, including the prison police, is still not fully functional, with the
three CSOs representatives still to be selected by the Parliament. The enacted amendments to
the Law on civil registry pave the way to resolving cases of statelessness and fulfilling the
country’s international obligations.
Last year’s recommendations were addressed only partially and remain valid. In the coming
year, the country should in particular:
→ address the dire conditions in prisons and step up efforts to promote alternatives to
incarceration and implement relevant recommendations on detention conditions, made by
national and international institutions;
→ allocate the necessary resources to the Commission for the Prevention and Protection
against Discrimination enabling it to fulfil its mandate;
→ ensure proper implementation of the Law on civil registry in order to end statelessness.
North Macedonia has ratified most international human rights instruments. On
20 March 2023, Parliament ratified Protocol No 16 to the European Convention for the
Protection of Human Rights and Fundamental Freedoms allowing the highest courts to
request the European Court of Human Rights (ECtHR) to give advisory opinions on
questions of principle relating to the interpretation or application of the rights and freedoms
established by the Convention.
In June 2023, there were 368 applications pending before the ECtHR, which delivered
judgments on 8 applications and found breaches of the European Convention on Human
Rights in 6 out of 7 cases (compared with 3 in 2022). Most of these related to the right to a
27
fair trial, the right to liberty and security and the protection of property. In the reporting
period, there were 354 new applications allocated to a decision body. Currently, there are
8 cases under enhanced supervision by the Committee of Ministers.
In order for North Macedonia to fully benefit from its observer status in the European Union
Agency for Fundamental Rights (FRA), it needs to develop a comprehensive monitoring and
data collection system in order to assess the level of implementation of human rights
legislation, policies, and strategies. The Ombudsman’s Office remains the central body for
the promotion and enforcement of human rights. Following a protracted delay in the
appointment, by Parliament, of five Deputy Ombudspersons, the Ombudsman withdrew the
names proposed and a new vacancy was published in May 2023. The Office strengthened its
cooperation with CSOs, including those dealing with the protection of rights of the child. Its
budget increased by 0.9% compared to 2022. There were no new recruitments. In 2022, the
Office dealt with 3 482 complaints of which 3 209 had been received in 2022 and 273 had
been rolled over from the previous year. Based on these, the Office initiated
2 173 procedures. Violations were confirmed in 683 cases (31.43% of all cases). Amongst the
Office’s other activities, it referred 120 cases to higher instances (17.57% of the total) and
was still waiting for a response in 57 cases (8.35% of the total).
Regarding the prevention of torture and ill treatment, North Macedonia still needs to
implement the recommendations published by the European Committee for the Prevention of
Torture (CPT) in 2021 and those from previous reports.
The external oversight mechanism for the police, including the prison police, is still not fully
functional, with the three CSO representatives provided by statute still to be selected by
Parliament. In 2022, the Ombudsman’s civil control mechanism acted on 11 complaints, up
from 8 complaints in 2021. It submitted 3 requests to the PPO to initiate a procedure for
determining criminal responsibility, compared to 1 similar request sent in 2021. In one case,
brought before the Skopje Basic Criminal Court, a police officer was found guilty of
harassment when on duty. In 2022, the relevant section in the PPO opened 163 new cases
(criminal charges) against 299 individuals with police powers or members of the prison
police suspected of having committed criminal offences. All reported cases must be
investigated without delay and safeguards against ill treatment by the police must be
implemented systematically. There needs to be more awareness raising about the external
oversight mechanism for the police, and better training opportunities to promote a good
understanding of the system.
In 2022, the Department for Internal Control, Criminal Investigations and Professional
Standards at the Ministry of the Interior handled 52 complaints on the use of excessive
physical force by police officers (63 complaints in 2021), of which 28 were found to be
ungrounded and 20 lacked evidence. Four criminal charges were filed with the PPO against
6 police officers for ill treatment when on duty. In 2022, the prisons submitted 129 reports on
the use of coercion against sentenced persons to the Directorate for the Execution of
Sanctions.
North Macedonia should urgently tackle the persistent issue of inadequate detention
conditions in prisons, police stations, social care and psychiatric facilities, in line with the
recommendations in the last CPT report. ECtHR case law shows that poor detention
conditions can be considered grounds for a violation of Article 3 on prohibition of torture. In
2022, the National Preventive Mechanism made 18 visits to police stations, prisons,
educational correctional institutions, psychiatric hospitals and places where foreigners and
asylum-seekers are accommodated or detained. Issues raised in the previous years remain
pending, especially the lack of appropriate working conditions for police officers and the lack
28
of adequate healthcare in prisons. In addition, the National Preventive Mechanism reported a
worrying deterioration in security conditions in the Idrizovo closed ward.
Although infrastructure was renovated and improved in a number of prison facilities,
conditions in parts of Idrizovo prison and other detention facilities of the prison system
remain inhumane. Reported overcrowding raises additional concerns for prison population
(2 476 persons sentenced and detained according to data from April 2023). Renovating the
most derelict building in line with the CPT recommendations is a priority.
The appointment of a new acting Head of the Directorate for the Execution of Sanctions and
an acting Director of Idrizovo prison was a positive step, taking account of their relevant
professional backgrounds. However, the requirements of the 2019 Law on executions of
sanctions for the selection of prison management were not consistently applied.
Regular inspections of prisons should continue. Corruption in prisons continues to be a
recurrent issue. In 2022, a plan for the prevention of corruption in the national prison system
2022-26 was adopted, together with the 2023 annual plan. Despite a positive effort to
incentivise medical staff working in prisons with a hardship allowance, the lack of adequate
healthcare or measures to treat drug addiction in prisons remains an issue of serious concern.
In order to be fully implemented, the 2021-2025 strategy for developing the prison system
requires funds, additional staff and political commitment.
The probation system continues to develop, and the number of cases is increasing. In 2022,
the total number of cases handled by the 11 probation offices increased to 475 (451 in 2021).
Cooperation should continue between the public and private sector and civil society, and
between agencies. Coordination has improved between probation officers, judges, public
prosecutors, prison staff and other institutions before a convict is released and this should
continue. The concentration of most of the probation cases in the Skopje Basic Criminal
Court of, highlights the need for training and awareness raising on the benefits of probation in
other courts in the country. No progress was made in adopting amendments to the legal
framework regarding alternative sentences and alternative procedures to increase their use.
No meaningful progress was made in addressing the overall lack of purposeful educational,
recreational and vocational activities for sentenced and remand prisoners. Educational and
resocialisation services, and treatment programmes should be run in all penitentiary facilities
and educational correctional facilities.
Regarding the protection of personal data, full alignment with the General Data Protection
Regulation is needed. Areas requiring alignment are: the transfer of personal data; the
independence of the Personal Data Protection Agency (PDPA); obsolete parts of old national
laws that need to be repealed. The PDPA submitted amendments to the Law on personal data
protection (LPDP). The country needs to adopt national legislation in line with the EU Law
Enforcement Directive.
Many sector laws that contain provisions on the processing of personal data have yet to be
harmonised with the LPDP. Additionally, the PDPA is not always consulted on sectoral laws
or implementing legislation and its advice is not always taken on board.
In general, data controllers do not implement the LPDP. In 2022, the Agency received
19 notifications on breaches of personal data rules, compared with 1 notification in 2021.
The Agency’s capacity does not match its tasks and powers. The Agency presently works
with only 21 staff among which there are only 5 supervisors and 1 IT specialist. The Agency
is not fully autonomous financially. State funds allocated to the Agency are just sufficient to
cover basic functions without any room for investment in staff professional development or
29
replacement of outdated vehicles and IT equipment.
In 2022, the Agency carried out 170 supervisions (compared to 304 in 2021), received
300 complaints (540 in 2021), and issued reprimands in 10 cases (17 in 2021). The Agency
issued 15 opinions on draft laws and implementing legislation. The Agency delivered
13 training sessions and held 19 coordination meetings with personal data protection officers,
in line with good practice. Recent changes in the Law on financial companies led to an
increase in the number of complaints. Due to an inconsistency in the Law, there have been
complaints by citizens about the misuse of personal data when obtaining ‘fast loans’. The
Agency started to issue misdemeanour charges against some of the relevant companies. The
Agency’s annual report in Parliament revealed that genuine consideration and follow-up of
recommendations was lacking.
Thematic supervision on the interception of communications involved the relevant
institutions. Improvements are needed in the field of data protection in the electoral sector.
In the absence of accurate data on the number of cybercrime attacks involving personal data
violations and the number of indictments and final judgments regarding these cases, there is a
public perception that institutions have weak capacity or commitment to prosecute these
cases. There is a strong need for further awareness raising and to foster a culture of personal
data protection in all sectors.
Freedom of thought, conscience and religion is guaranteed by the Constitution and is
implemented in practice. The law prohibits discrimination on grounds of religion. The
Commission for Relations with Religious Communities and Groups is the main government
body responsible for cooperation between the government and registered religious
communities and is encouraged to continue to foster inter-religious dialogue and cooperation
between the religious communities. The government is delaying accreditation of religious
secondary schools in the country, which prevents students with diplomas from these schools
from accessing higher education.
----------------------------------------------------------------------------------------------------------------
Freedom of expression
North Macedonia is in between some and moderate level of preparation on freedom of
expression. Overall, it made limited progress. The general context is favourable to media
freedom and allows for critical media reporting. The amended Criminal Code and Law on
civil liability for defamation raised the overall level legal protection for journalists. However,
a number of attacks, threats and some intimidating behaviour towards journalists were noted.
Greater transparency is needed regarding media advertising by state institutions and political
parties. Reform of the public service broadcaster is required to strengthen its independence,
professional standards and financial sustainability. Since December 2018, Parliament has
been delaying the appointment of the public service broadcaster’s programming council and
media regulator’s council. Working conditions for journalists remain challenging.
The Commission’s recommendations from last year remain valid. In the coming year, North
Macedonia should:
→ revise the legal framework governing the media to bring it into line with the EU acquis
and European standards, in particular on competition and state aid rules, intellectual
property rights, part of the EU Single Market;
30
→ step up implementation of the strategy to reform the public broadcaster and finalise
appointments for the public service broadcaster’s programme council and the media
regulator’s council;
→ continue to promptly address all threats and acts of violence against journalists and ensure
perpetrators are brought to justice.
The overall environment enables freedom of expression and critical reporting. The legal
framework was strengthened: the amended Criminal Code and the Law on civil liability for
defamation, adopted in November 2022, have increased legal protection for journalists.
Systemic challenges remain to be addressed: deep media polarisation, physical and verbal
violence against journalists, working conditions for media workers, especially their labour
and social rights. The laws encompassing the functioning of the media need to be
implemented. Digital technologies and disruptions on the media market point to the need for
a general strategy on reform of media in cooperation with all stakeholders.
Intimidation of journalists
In 2022, the Ministry of the Interior recorded 17 cases of attacks against journalists and
opened investigations. The Association of Journalists recorded 14 incidents involving
journalists, of which 4 involved physical attacks or illegal detention, and 11 involved verbal
attacks, threats and other forms of intimidation. The Agency for Audio and Audiovisual
Media Services and the media associations regularly condemned such incidents. In February
2023, Parliament adopted amendments to the Criminal Code increasing protection for
journalists while performing their professional duties. The Public Prosecution Office in
Skopje appointed of a prosecutor to monitor the proceedings in response to attacks on
journalists. This is a positive development. The public prosecutor appointed has the authority
to monitor proceedings in which journalists appear as injured parties, witnesses or reported
persons while performing their work. The Ministry of the Interior appointed a contact person
at the Department of Cybercrime and Digital Forensics making it easier for journalists to
report incidents involving cyberbullying and other online threats to their safety. The
authorities need to ensure impartial, speedy and effective investigations in bringing
perpetrators to justice. Politicians and public officials on different occasions used
unacceptable language against journalists. Online harassment and verbal attacks continued,
especially on social media, with an increase in cases against female journalists. Old cases of
physical attacks against journalists remain unresolved.
Legislative environment
The Law on audio and audiovisual media services is broadly in line with the EU acquis,
following the legislative changes of July 2023. Furthermore, the legal framework
encompassing the functioning of the media needs to further improve, in line with EU acquis
and international standards. The OSCE ODIHR recommendations on the electoral legal
framework have still to be addressed. The concerns raised by media associations about state-
funded political advertising in the media need to be addressed in line with the EU acquis and
European best practices.
In November 2022, a group of parliamentarians proposed amendments to the Law on audio
and audio-visual media services that impose, on the government and local authorities, duties
to organise and fund public interest campaigns. However, the media regulator and some
associations of journalists criticised the proposals, stressing that they could undermine the
independence of the media and disrupt the media market. More sustainable solutions are
needed to support media viability.
31
In 2022, the government continued to reduce funding for the broadcasting sector. Parliament,
once more, failed to appoint new members to the Public Service Broadcaster’s Programme
Council and Media Regulator’s Council. The terms of office of the current members of both
councils was extended until Parliament elects new members.
Implementation of legislation/institutions
In 2022, the media regulator continued its supervisory role over various forms of media and
over illicit media concentration and ownership. The regulator continued to work with CSOs
and media outlets to promote media literacy and human rights topics such as gender equality
and respect for the rights of persons with disabilities by broadcasters.
The financial stability and independence of the media regulator need to be strengthened. This
is even more important since it received additional responsibilities following the alignment of
the national legislation with the EU Audiovisual Media Services Directive.
In 2022, the Council of Media Ethics received 78 complaints about breaches of ethical
standards. The most frequent complaint, accounting for 49.37% of cases, was about
violations of the legal provision that ‘the journalist should publish accurate and verified
information’. Though hate speech is prohibited online and offline, it persists online. In 2022,
the association of journalists expressed particular concern about hate speech and insults
directed at journalists and media workers by politicians and other public office holders. The
number of defamation and insult lawsuits involving journalists was more than double the
number for last year: 54 cases in 2022 against 20 in 2021.
Public service broadcaster
Reform of the public service broadcaster was further delayed. Despite the 2021 Law on audio
and audiovisual media services, in 2022, the authorities once again used discretionary powers
granted by law to cut funding to the broadcasting sector. Budgetary fluctuations create
uncertainty in planning. The authorities need to provide sufficient and stable funding for the
public broadcaster. No solution was found to settle the public service broadcaster’s old debts
towards state institutions. Further efforts are needed to ensure the independence and
sustainability of the public broadcaster, both financially and legally.
Economic factors
The COVID-19 pandemic, Russia’s war of aggression against Ukraine and the global
economic and energy crises created additional pressures on the media industry. The
authorities supported media outlets through a range of economic measures, including a
reduction in the broadcasting licence fee for radio and television for 2023. Media associations
continued to raise concerns about media integrity and editorial independence, and indicated
the need for an assessment of the impact of ownership concentration on media pluralism and
editorial independence. They also pointed to the risk of individuals or a group of media
owners having excessive influence on media outlets. Further support is needed for the
development of professional and investigative journalism. Media independence should be
further safeguarded.
In November 2022, a group of MPs submitted amendments to the Law on audio and
audiovisual media services to lift the ban on government advertising on commercial channels.
Some media associations oppose this, fearing it could undermine the independence of the
media and disrupt the media market. Media associations continued to express concern over
legal provisions enabling political parties to use state funding to advertise in the media and
over the lack of transparency of party-political advertising generally and on online media
32
platforms in particular. In 2022, there were five daily newspapers, including two in Albanian.
The authorities continued to support the print media with just over EUR 300 000 in funding.
As required by law, the media regulator publishes a register of broadcasting and print media,
including information on the number of employees and type of employment. The number of
online media outlets is estimated at between 150 and 200.
Internet
Online media are not governed by any specific law. There is a shift in the advertising market
towards digital, with growing threats from disinformation, breaches of intellectual rights, and
a lack of transparency concerning paid political advertising. Certain online media outlets are
subject to influence from political figures. Political parties are not obliged to disclose their
spending on social media campaigns. There is inadequate oversight regarding the utilisation
of personal data for election campaign purposes.
The public’s understanding of the risks of disinformation needs to be improved as do and
media literacy skills throughout society. Current counter-disinformation measures are not
very effective.
Stronger self-regulation is needed for online media, in particular through promotion of the
registry of online media (promedia.mk) and the development of professional standards for
online journalism. With regard to access to information, the Agency for the Protection of Free
Access to Public Information received 343 complaints, of which 195 were predominantly
from CSOs, while 148 complaints were filed by individuals.
Freedom of artistic expression
Freedom of artistic expression is broadly guaranteed.
Professional organisations and working conditions
In 2022, the Independent Trade Union of Journalists and Media Workers registered various
breaches of labour rights, notably the high number of short-term or part-time contracts with
no health and social insurance, no right to annual leave, unpaid overtime and compulsory
night shifts. Dialogue with the government needs to be improved. Advocacy aimed at
improving working conditions in the media is hindered by economic challenges in the sector
and opposition to the unionising of journalists. Further efforts are needed to protect
journalists’ professional and labour rights, freedoms and security, in particular by
strengthening the legal framework for the work of unions. Many journalists have no choice
but to accept precarious contractual arrangements. This, together with difficult socio-
economic conditions in the sector, contribute to a culture of self-censorship and create
opportunities for media owners to influence editorial policy.
The Agency for Audio and Audio-visual Media Services launched a new specialised website
on gender equality and media, aiming to serve as a resource centre for journalists. Analysis
showed that there are too few women executives in the private media. Additional measures to
promote gender equality in the media industry are needed.
(See also Chapter 10 – Digital transformation and media)
----------------------------------------------------------------------------------------------------------------
----
The right to freedom of assembly and association is guaranteed by the Constitution and the
government ensures that the legislation is thoroughly implemented. The country’s legal
framework is largely aligned with its international obligations in terms of freedom of
33
association. Further efforts are needed to implement rulings of the ECtHR relating to the
registration of associations.
Following the amendments to the current Law on associations and foundations, introduced in
November 2022, the Central Registry rejected the use of the names ‘Ivan Mihailov’ and ‘Tsar
Boris III’, thus removing the two Bulgarian cultural associations in Bitola and Ohrid from the
list of associations and foundations that are allowed to legally operate in the country. This
followed an assessment by the Commission for the Uses of Names, which established that the
naming of the two cultural clubs after controversial historical figures had triggered a reaction
in society. The drafting of new legislation on associations and foundations should be subject
to a broad consultation process with civil society and concerned stakeholders. The law
should aim to apply the highest international standards and guidance in this area, including by
consulting the Venice Commission prior to the adoption of the law, in line with the
recommendation of the European Commission against Racism and Intolerance (ECRI).
Issues of labour and trade union rights are covered in Chapter 19 – Social policy and
employment.
No significant progress was made with regard to property rights. Procedures remain lengthy
and expensive, due to the lack of an efficient central institution and the lack of coordination
between institutions dealing with these rights. There was no progress with the national
strategy on property rights. At municipal level, property registers are not regularly updated
and are still kept in analogue format. The Cadastre Office maintained a satisfactory rate of
over 90% of cases resolved. The registration of land and properties has been completed, and
laser-scanning has covered the whole country. The administrations that handle restitution,
compensation and legalisation processes still struggle to manage their caseload, mainly due to
understaffing and lack of funds. Over 6 000 denationalisation cases are still open and form
the bulk of complaints addressed to the Ombudsman’s Office, even though this process was
officially declared closed in 2013.
Non-discrimination principles are enshrined in the Constitution and national legislation. The
authorities should align the national legal framework with anti-discrimination provisions,
based on the Law on promotion and protection against discrimination. On the back of the
2021-2026 strategy for equality and non-discrimination, the authorities adopted an action
plan for implementation of the strategy, accompanied by a financial forecast. The
Commission for the Prevention and Protection against Discrimination continued to be
proactive, despite existing logistical and financial challenges. The Commission’s annual
budget was slightly higher than the previous year, but this is considered insufficient to enable
the Commission to perform its functions. Among the issues hindering the Commission’s
work are: two unfilled commissioner posts (out of seven in total), a lack of financial
independence, low numbers of administrative staff and some limitations in the current anti-
discrimination Law. Parliament once more failed to agree on the appointment of
commissioners, which affects the enforcement of the Law on the prevention of and protection
against discrimination. The lack of diversity in the Commission, notably as regards gender
and persons with disabilities, continues to attract criticism from certain commissioners and
civil society. Despite existing challenges, in 2022, the Commission worked on
248 complaints and 7 ex officio procedures and issued two recommendations. It confirmed
discrimination in 30% of cases, particularly in public information and media and labour
relations. Based on its wide-ranging powers, the Commission submitted 14 requests for
misdemeanour procedures. In response to a request made by the Commission, a court passed
judgment confirming the discrimination findings.
34
The legal framework on combating hate speech needs further improvements, in line with the
European Commission against Racism and Intolerance (ECRI) General’s Policy
Recommendation No 15 on combating hate speech. Furthermore, the country should fully
address ECRI’s findings and recommendations in its sixth report of September 2023.
The availability of official data on hate crime remains sporadic, despite efforts by the
authorities to develop a recording and data collection framework. A civil society database
continues to register hate crime cases successfully. Among law enforcement and criminal
justice officials, a greater capacity to prevent and prosecute all instances of violence, hate
crimes and hate speech is needed. Strengthening of the capacities and understanding of law
enforcement officials and legal experts is needed, as part of a wider effort to foster a more
tolerant and non-discriminatory culture in society.
In October 2022, 49 members of the National Coordination Body for Equality and Non-
discrimination were appointed. The Ombudsman’s Office worked ex officio on three cases
and received 76 complaints on grounds of discrimination (43 in 2021), predominantly
concerning work and labour relations, and it issued 16 opinions. The Ombudsman’s
Department for Anti-Discrimination Protection remains understaffed.
In 2022, the Ministry of the Interior opened investigations into 11 online crimes. CSOs report
that hate speech is on the rise in the country. There should be a systematic practice of
collecting data and addressing hate speech and hate crime.
Some progress was made on promoting gender equality through further alignment with the
Istanbul Convention on Preventing and Combating Violence against Women and Domestic
Violence and developing a policy framework for integrating gender perspectives and aligning
with the EU gender equality acquis. A national strategy for gender equality was adopted in
July 2022, together with an action plan for 2023-2024. In February 2023, amendments were
made to the Criminal Code, regulating criminal acts of gender-based violence, including
stalking and hate crimes based on gender identity and gender differences. The Ministry of
Defence continues to implement the operational plan for implementing the Second National
Action Plan on the UN Security Council Resolution 1325 Women, Peace and Security (2020
- 2025). However, there is no progress in implementing the objective on communication and
capacity building for the implementation of Resolution 1325 at local level, including the local
self-government units and the Association of the units of local self-government. The cross-
institutional mechanisms for implementing and monitoring gender equality policy need to be
strengthened with an improved structure, technical capacity, adequate funding and trained
professionals in line with international standards. The Law on Gender Equality has not been
adopted yet. This is largely due to a growing anti-gender movement countrywide. Anti-
gender campaigns, at times supported by local government officials, religious and political
leaders, raise serious concern.
Implementation of the Istanbul Convention remains a challenge. While the Law on the
prevention of and protection from violence against women and domestic violence was
adopted in 2021, the implementing legislation was not adopted. Implementation also suffers
from the lack of adequate funding (including for the National Coordinative Body on
Domestic Violence), effective operating procedures and programmes for the reintegration of
victims of violence.
Operational cross-institutional protocols are missing, and the police and health workers still
struggle to assess the consequences of violence and respond to them. Victims of gender-based
and domestic violence faced several challenges in accessing health services due to a lack of
adequately trained staff and limited accommodation facilities. CSOs providing services for
35
victims outside the capital are still entirely dependent on donor funding.
Persistent gender gaps exist also in employment and in labour force participation. Among the
working age population, 46% of women have consistently been out of the labour force
compared to 23.3% of men. The gaps are even wider for marginalised women. Roma women
aged between 40 and 44, in particular, have the highest unemployment rate. Women
registered as individual farmers are excluded from the Law on health insurance when it
comes to compensation due to illness, workplace injury and absence due to pregnancy, birth
and motherhood.
In addition, 50.5% of women are out of the labour force because of their caring
responsibilities towards other people, compared to 1.7% of men. This shows that unpaid care
work directly contributes to inequalities in women’s participation in the labour force and
women’s exclusion more generally. The adoption of a draft Law on labour relations, which
includes shared parental leave, and a Law on harassment at the workplace has been pending
for a number of years now.
The lack of reliable sex disaggregated data across sectors is a significant obstacle to
developing evidence-based policies and proper measures. The first national gender equality
index, published in 2019, has not yet been updated. The relevant institutions lack the capacity
and coordination needed for proper gathering and analysis of gender statistics.
Various legislative, institutional and policy measures protect the rights of the child in line
with international standards and EU acquis. However, a better legislative framework, more
funding and more human resources are needed across most sectors. Further reforms and
better interinstitutional cooperation are needed to ensure respect for children’s rights to
education, health, protection from violence, non-discrimination, etc.
The preparation of a national action plan for children was further delayed. North Macedonia
still has no national body responsible for coordinating all policies relating to implementation
of the UN Convention on Child Rights and the Optional Protocols. Family law provisions on
adoption and marriage under the age of 18 fall short of international standards. This has to be
addressed as a matter of urgency. The third optional protocol on communications procedure
is still not ratified. In 2022, 252 complaints were filed with the Ombudsman related to
breaches of children’s rights, 12 of which concern children with disabilities. The Ombudsman
issued 103 opinions, which were accepted in 87 cases. Awareness raising is needed on the
possibility for children to file complaints themselves. Further action is needed to strengthen
the capacity, in particular, the human and financial resources, of the Ombudsman’s
Department for the Rights of the Child and Persons with Disabilities. The Ombudsman also
needs to be more independent and to have a stronger remit.
Children need to be more involved in the making of policies related to or affecting children’s
rights. The best interests of the child should be the primary consideration when institutions
devise policies relevant to children and this principle should be incorporated into all relevant
laws and policy documents. Mechanisms for protecting children from violence need more
support, in the form of sufficient funding and implementation of the national strategy to end
violence against children (2020-2025). To ensure a cultural shift and dismantle the social
acceptance of violence against children, appropriate educational support for parents is
needed, aimed at strengthening positive, non-violent parenting skills. Measures are needed to
strengthen the child protection system and improve the collection of data on violence and
abuse, both online and offline. There is currently no provision for specialised therapy and
child-friendly rehabilitation for children who are victims of violence. Reliable and
36
comparable data disaggregated by age and sex is essential for the implementation and
monitoring of the National Strategy on addressing violence against children.
There is lack of up-to-date information on measures undertaken to combat child poverty and
to assess the impact of the existing legal protection. Despite social protection measures aimed
at combating the socioeconomic consequences of COVID-19, further efforts to prevent and
mitigate the effects of child poverty are needed. Authorities need to commit to making
changes to the social protection system to be more child-sensitive and based on a child-
centred service delivery model. Cooperation at local level needs to improve among
stakeholders, to involve child rights CSOs and children themselves in decisions that affect
them. The capacity of social work centres needs to be expanded, so that they can develop and
support new community services around the country, including services to support children at
risk, Roma children and children with disabilities who are victims of discrimination and
segregation.
North Macedonia continued its efforts to include children with disabilities in regular schools
and pre-schools. However, there are insufficient financial and human resources to implement
the Law on primary education and the social model of disability assessment based on human
rights. Despite improvements in the legal framework, some issues remain, relating to the
collection of centrally disaggregated data on children with disabilities, the lack of suitable
facilities, the lack of community services, and prejudice. This leads to marginalisation and
discrimination against children with disabilities in terms of access to education, health and
social protection services. With regard to children without parental care, community-based
services and sub-regional centres for foster family assistance were made available throughout
the country and no children are in institutionalised care. However, the authorities should
continue to reform the child protection system in ways that would prioritise family placement
for children over small group homes.
The authorities identified 7 child victims of trafficking in human beings in 2022. More
measures are needed to ensure effective support for vulnerable children, including protection
from sexual exploitation. The authorities need to set up training programmes on children’s
rights for all professionals. Continuing professional development training should be provided
to judges and public prosecutors on issues such as discrimination based on disability, gender-
based violence against women, and violence against children. The National Action Plan and
Strategy for the fight against trafficking in children (2021–2025) should be aligned with the
Lanzarote Convention.
The new Law on justice for children was adopted, in line with international standards and the
EU acquis, including the Directive on procedural safeguards for children who are suspects or
accused persons in criminal proceedings.
The administration of child justice was enhanced by the adoption of a 2022-2026 strategy on
justice for children and a 2022-2023 action plan, further promoting alternative measures to
custody and children’s resocialisation. There is a need for concrete measures supporting the
judicial training providers and all relevant professionals’ bodies to address the rights of the
child and child friendly and accessible justice in their activities. Legislation needs to be
amended to find child-friendly solutions for educational correctional measures for girls. The
educational correctional facility in Volkovija hosts only young males; in the absence of a
female section, there is no long-term provision for statutory education for girls. There is a
need for regular monitoring and inspection of the educational correctional facility in Tetovo
and Ohrid prison, to ensure that the authorities provide proper protection and other services
for the children detained there. Access to justice and legal representation is still inadequate,
as is the capacity of public officials involved with child victims, child witnesses and children
37
in conflict with the law. Juvenile justice professionals need to take a more consistently inter-
sectoral and streamlined approach to implementing the legal framework.
The rights of persons with disabilities are constitutionally guaranteed and set out in greater
detail in the Law on prevention and protection from discrimination. A number of other laws
specifically regulating social policy and assistance are also relevant in this context. The new
2023-2030 national strategy for the rights of persons with disabilities was adopted, along with
the 2023-2025 action document. Rules were adopted for the functional assessment of children
with disabilities according to the international classification of functioning, disability and
health. The rules are in line with the Convention on the Rights of Persons with Disabilities
(CPRD) and will enable assistance to be given based on children’s individual needs.
Implementation of the 2018-2027 national deinstitutionalisation strategy continues. This
involves a transition from institutional care to family and community-based care with support
from social services. The national coordination body for the implementation of the CPRD
consists of representatives from the relevant ministries and two representatives of CSOs for
persons with disabilities. A team for monitoring implementation has been incorporated into
the Ombudsman’s Office. The new Law on primary education promotes the full inclusion of
students with disabilities by transforming special schools and classes into learning support
centres. There are no more children with disabilities in large-scale social care institutions. To
support the mainstreaming of education for children with disabilities, 725 education assistants
are now employed, covering 850 children. A number of adults with disabilities are being
gradually rehoused in 57 newly established residential units for supported living. Home care
and day-care services have also been set up. (see Chapter 19 – Social policy and employment
for aspects related to social services, assistance and benefits).
Negative stereotypes and hate speech against lesbian, gay, bisexual, transgender, intersex
and queer (LGBTIQ) persons prevail in society. There was no progress in removing
negative stereotypes and hate speech toward LGBTIQ persons from textbooks, nor in
adopting a national action plan for LGBTIQ as part of systematic promotion of equality and
prevention of discrimination. There was no progress in implementing the ECtHR judgment
(January 2019) concerning legal gender recognition by amending the Law on the civil
registry. The legal framework does not allow for the official recognition of same-sex couples.
No progress was made in investigating the attacks on the LGBTIQ support centre which took
place in 2012, 2013 and 2014. Law enforcement agencies did not pursue the investigation
into the acts of vandalism on the office of an LGBTIQ organisation in Tetovo or into death
threats against activists. The court in Strumica handed down a six-month prison sentence for
an attack against an LGBTI activist. In June 2023, the authorities facilitated the successful
organisation of a LGBTIQ pride parade. However, CSOs and LGBTIQ activists criticise the
authorities for shrinking the space for CSOs, especially those working on sexual and
reproductive rights. Growing anti-LGBTIQ rhetoric, at times involving political and religious
figures, has led to increased intolerance and hate-speech within society. Serious efforts are
needed to enable LGBTIQ persons to enjoy their rights.
Concerning procedural rights, the country remains partially aligned with the EU acquis. The
Law on compensation for victims of violent crime was adopted by Parliament and entered
into force in May 2023.
The country has a solid network providing primary and secondary free legal aid to those who
cannot afford to hire an attorney. Free legal aid is accessible through the 34 regional branch
offices of the Ministry of Justice, civic associations authorised to give legal aid, legal clinics
within the faculties of law and lawyers certified to give secondary legal aid. A register of
associations and individual lawyers who provide legal aid is available on the website of the
38
Ministry of Justice. Increasing numbers of requests were submitted and approved for primary
and secondary legal aid. The system of legal aid in criminal proceedings needs to be reformed
to improve access to justice. Most of all, the authorities need to revise the eligibility criteria
for legal aid in criminal proceedings (for mandatory defence, defence of indigent persons and
representation of the interests of victims of crime). The budget allocated for legal aid in 2022
amounted to EUR 616 304, while the budget implemented amounted to EUR 521 612 (a
0.7% increase compared with 2021).
The country is not yet aligned with the European Protection Order Directive. Further
amendments are needed to the Law on criminal procedure to ensure alignment with the
Victims’ Rights Directive (for instance, regarding the individual assessment of victims). The
Law on the payment of monetary compensation to victims of violent crimes entered into
force in May 2023. This includes victims of trafficking in human beings. The authorities
should also take concrete steps to adopt legislation in line with the Directive on procedural
safeguards for children who are suspects or accused persons in criminal proceedings.
As regards the protection of minorities, the authorities continued to partially implement the
national strategy to promote a multi-ethnic society, ‘One Society for All and
Interculturalism’. However, further efforts are still needed to ensure sufficient political
support, coordination between relevant authorities, adequate funding and other resources, in
order to promote equal opportunities and to improve social cohesion in the country. The
Language Implementation Agency and the Agency for Community Rights Realisation remain
under-staffed and under-funded. There is a need for the training and recruitment of translators
and interpreters. Further efforts are needed to strengthen the financial independence of these
two institutions, which will enhance their ability to resist political influence. Representation
of non-majority communities at local level remains poor. The authorities should implement
the recommendation issued by the Advisory Committee of the Framework Convention on
National Minorities to ratify the European Charter for Regional or Minority Languages,
signed in 1996. The authorities need to organise a public consultation and top adopt in a
timely manner a new strategy building on the concept of ‘one society and interculturalism’,
for 2023-2025.
There was some progress with inclusion of Roma. With the 2022-2030 Roma inclusion
strategy now in place, the action plans were adopted in October 2023 covering anti-gypsyism,
education, employment, social care, healthcare, housing, civic registration and culture. An
adviser to the Prime Minister overseeing Roma inclusion issues was also appointed as the
National Roma Contact Point. Enrolment of Roma children in kindergartens increased
slightly by 1.25% from 420 last year to 462. In the 2022/23 school year, 4 429 Roma children
enrolled in the first grade of primary education and 202 children were identified by CSOs as
not registered. The annual dropout rate for Roma children in primary schools is still relatively
high. According to the Ministry of Education and Science, 93.17% Roma pupils remained in
school after the academic year 2021/22, while 6.83% left. 89.08% of Roma children of
school-leaving age successfully completed their secondary education. The employment of
35 Roma education mediators is a positive step, while segregation in schools remains a
significant issue. There are no systematic measures in place to prevent irregular attendance or
to reintegrate children who have left education, or systematic enforcement of compulsory
education at primary and secondary level as required by the law.
Access to preventive and curative health services, reducing mortality, addressing
discrimination and unequal treatment by health professionals and women’s health remain key
challenges in the field of Roma healthcare. There is a slight decrease in the number of
unemployed Roma. Measures were introduced to target Roma individuals with low levels of
39
education and promote their inclusion in the labour market. 969 Roma were included in the
Youth Guarantee scheme. A geographic mapping of Roma settlements in five municipalities
identified areas where housing interventions are needed. Most Roma settlements are still not
covered by urban plans. The enacted amendments to the Law on civil registry, the Law on
Registering the Place of Residence and the Law on ID pave the way to resolving all known
cases of statelessness and fulfil the country’s international obligations. They guarantee the
right of registration for children born in the territory of North Macedonia within 45 days of
birth, regardless of the status of their parents. Ending statelessness can have a significant
positive impact on the affected Roma and society as a whole.
Cases of discrimination and police brutality based on Roma ethnicity were recorded,
particularly against young Roma, girls and Roma in detention. Other barriers such as a lack
of digital skills and access to technology continue to prevent Roma people from fully
enjoying their rights and accessing most services, most of which are now digital (healthcare,
education, employment, social protection etc.). Additional efforts and resources are required
to speed up inclusion of Roma, to tackle anti-gypsyism, discrimination and educational and
spatial segregation, and to reduce inequalities with the rest of the population. The government
is working on implementing the priorities identified in the Poznan Declaration and on priority
measures identified in the EU Roma bilateral seminars. Overall, while progress has been
made, further efforts are needed to fully promote inclusion and protection of Roma and tackle
anti-gypsyism and discrimination, including multiple and structural discrimination, against
Roma. Systematic participation, empowerment and capacity building are required.
Citizenship rights
In December 2012, North Macedonia amended the law allowing the acquisition of
citizenship for special economic interests. The scheme could pose migratory and security
risks, especially given the different criteria for granting citizenship. In line with the
Commission’s recommendation on this matter in its sixth report under the visa suspension
mechanism, North Macedonia should refrain from systematically granting citizenship based
on special economic interest (investor citizenship schemes), as such schemes pose risks as
regards security, money laundering, tax evasion, terrorist financing, corruption and
infiltration by organised crime, and are incompatible with the EU acquis.
2.2.2. Chapter 24: Justice, freedom and security
The EU has common rules for border control, visas, residence and work permits, external
migration and asylum. Schengen cooperation entails the lifting of border controls within the
EU. Member States also cooperate with North Macedonia in the fight against organised
crime and terrorism, and on judicial, police and customs matters all with the support of the
EU justice and home affairs agencies.
North Macedonia is moderately prepared to implement the EU acquis. Some progress was
made. Cooperation in the field of counterterrorism, and the prevention and countering of
violent extremism was further upgraded by the new arrangement for the implementation of a
joint action plan on counterterrorism. The national strategies for countering terrorism (2023-
2027) and countering violent extremism (2023-2027) were adopted in May 2023, along with
the related action plans. Registration of migrants needs to be done in a systematic manner and
protection-sensitive profiling needs to be improved. The country should establish a proper
system for managing irregular movement and stop the practice of returning migrants outside
a legal framework. A contingency plan to manage large migratory flows needs to be finalised
and adopted. The Status Agreement for operational cooperation in border management with
Frontex entered into force on 1 April 2023. This made it possible to launch a joint operation
40
with the deployment of officers from EU Member States to provide support with border
control and the management of irregular migration and cross-border crime. Last year’s
recommendations were only partially addressed, and remain valid. In the coming year, the
country should in particular:
→ continue to proactively reform the structures responsible for fighting organised crime with
a focus on increasing operational capacity and cooperation;
→ ensure effective implementation and monitoring of the national strategies for countering
terrorism (2023-2027), countering violent extremism (2023-2027) and of the joint action plan
on counterterrorism;
→ systematically register migrants and improve protection-sensitive profiling, adopt a more
systematic approach to fighting migrant smuggling and align national legislation with the
EU’s list of visa-required countries.
Fight against organised crime
North Macedonia has some level of preparation in the fight against organised crime. Some
progress was made in the area of the fight against terrorism and violent extremism. The
country continues to have a good level of operational cooperation with EU Members States,
non-EU neighbouring countries, Europol and Eurojust. A new Law on money laundering and
financing of terrorism entered into force in July 2022. Certain forms of crime, such as money
laundering and financial crimes still need to be addressed more effectively.
The capacity of the National Coordination Centre for the Fight against Organised Crime needs
to be improved. Coordination remains crucial for all stakeholders involved in fighting
organised crime, including coordination between prosecutors and police.
Most of the recommendations from last year remain valid. In the coming year, North
Macedonia should in particular:
→ improve its track record on investigations, prosecutions and rendering convictions in
organised crime and money laundering cases with a focus on confiscation of proceeds of
crime;
→ adopt and implement the necessary legislation for an Asset Recovery Office;
→ strengthen human and financial capacities of the law enforcement agencies investigating
organised and serious crimes, financial crimes and money laundering.
Institutional set-up and legal alignment
The number of police officers increased in 2022, reaching 347.6 per 100 000 inhabitants (330
in 2021), which is higher than the EU average of 335.3/100 000 (Eurostat, 2019-2021).
Key institutions in the fight against organised crime include the specialised police units
within the Ministry of the Interior, which have jurisdiction and competence over different
types of organised crime and financial investigations. Medium-term priorities and objectives
for the development of the police force are determined in the Ministry of the Interior’s
strategic plan for 2022-2024. In 2022, 47% of the planned activities were implemented.
In 2018 and 2019, North Macedonia comprehensively reformed its intelligence services in
line with the findings of the report by the Senior Experts’ Group on Systemic Rule of Law
Issues. The former Bureau for Security and Counterintelligence (UBK) was replaced by the
National Security Agency (NSA) which, contrary to its predecessor, is no longer under the
authority of the Ministry of the Interior and does not have police powers. The NSA is located
41
within the premises of the Ministry of the Interior, which is against international standards
and continues to be a matter of concern.
The Operational and Technical Agency can be authorised by a court order to monitor
communications as part of a criminal investigation or in the interests of state security and
defence or as part of monitoring of mobile operators. It does not yet have its own independent
premises and is located in a building owned by one of national telecommunications operators.
The Agency has modernised its technical systems and started to digitalise the procedure for
obtaining court orders. The mandate of the Director of the OTA expired in September 2023,
leading to a gap in the functioning of the agency until the appointment by the Parliament of a
new director.
The National Coordination Centre for the Fight against Organised Crime (NCCFOC) is
operational but, to ensure its proper functioning, permanent staff should be recruited to cover
positions currently filled by temporary staff. A database for better data management and
software for information analysis have been developed and are expected to be fully
operational before the end of 2023.
There are three structures with a role in conducting financial investigations: the Financial
Police Office within the Ministry of the Interior, responsible for financial crimes under police
jurisdiction; the Financial Intelligence Office within the Ministry of Finance, responsible for
intelligence analysis related to money laundering and terrorism financing; and the Sector for
Control and Investigation within the Customs Administration, responsible for investigating
crimes within its jurisdiction.
The Asset Recovery Office is part of the Unit for International Legal Assistance in the Public
Prosecutor’s Office. Though preparations have been underway since 2021, the Office, is not
yet regulated by law. and functions on the basis of standard operational procedures.
Both the Ministry of Defence and the Ministry of the Interior have responsibilities for
cybercrime and cybersecurity. The army is also developing capacity for cyber defence and
cooperates with international organisations in the field of global cyber security and hybrid
threats. The Ministry of the Interior’s Sector for Computer Crime and Digital Forensics
carries out investigations into cybercrime, using digital forensics.
Regarding the legal framework, the Criminal Code is regularly updated to stay in line with
EU and international standards. Its scope has been extended to criminalise activities such as
trafficking in human beings, online child pornography, drug trafficking, computer crime.
More recently, provisions were added to bring the Criminal Code into line the Council of
Europe’s Convention on Preventing and Combating Violence against Women and Domestic
Violence.
The country is a signatory to the ‘Convention on Cybercrime on Enhanced Cooperation and
Disclosure of Electronic Evidence’ (Budapest Convention). North Macedonia signed the
Convention’s second additional protocol in May 2022, but it has not yet been ratified by
Parliament.
North Macedonia is implementing a wide range of strategic documents concerning
organised crime and other forms of serious crime, based on the corresponding EU strategies.
These include: a national strategy against human trafficking and irregular migration together,
accompanied by an action plan (2021-2025), a national strategy against children trafficking
(2021-2025), a national drug strategy (2021-2025), a strategy for building capacity to conduct
financial investigations and confiscate property, with action plan (2021-2023), a national
42
strategy for control of small arms and light weapons, with action plan (2022-2024), and a
national strategy for preventing money laundering and terrorism financing (2021-2023).
In line with Europol methodology and policy, in 2022, the Ministry of the Interior prepared
and presented a ‘national serious and organised crime threat assessment (SOCTA) 2021’.
Launched at the beginning of 2022, it defines the priorities in the fight against organised and
serious crime.
Concerning trafficking in human beings, in compliance with the recommendations from the
Group of Experts on Action against Trafficking in Human Beings, in November 2022, a Law
on state compensation for victims of violent crime was adopted, also covering the crime of
human trafficking. In March 2023, the Ministry of the Interior and the State Labour
Inspectorate signed a cooperation memorandum at the initiative of the National Anti-
trafficking Commission, to strengthen cooperation on prevention, detection and suppression
of trafficking in human beings for the purpose of labour exploitation, and to ensure timely
protection of victims of labour exploitation and child victims of all forms of exploitation.
Concerning small arms and light weapons, national legislation is not yet harmonised with
EU directives and regulations. After the adoption of the Law on Development, Production
and Trade in Military Goods, implementing legislation was finalised in 2022. The Law on
Weapons of North Macedonia is partly aligned with Directives 2021/555(EU) and still
pending the alignment with Implementing Directive 2019/68 on marking of firearms and
Implementing Directive 2019/69 on technical specification of alarm and signal weapons. The
responsible authority is the Ministry of Interior. There is a national commission for the
control of weapons, that cooperates with the relevant national authorities (ministries of
interior, defence, justice, finance (customs administration), foreign affairs, and agency for
sized and confiscated property (for the destruction of weapons).
In the framework of the actions in Western Balkans within the EU Action Plan on firearms
trafficking, which correspond with the goals of the Regional Roadmap to better control
SALW in Western Balkans, North Macedonia improved the investigation and record keeping
of firearms capacities and made some progress with limited destructions of the confiscated
firearms and ammunition and surplus ammunition. Several activities related to the
implementation of the Roadmap continued to be limited, including awareness raising,
outreach and education on the dangers and risks related to the misuse, illicit possession, and
trafficking of firearms/SALW, as well as reduction of illicit firearms through legalization,
voluntary surrender and deactivation.
Concerning child sexual abuse, the Cybercrime and Digital Forensics Section liaises with
the Interpol I-24/7 Child Sexual Exploitation-ICSE network.
Implementation and enforcement capacity
In 2022, 21 investigations on organised crime groups were initiated involving a total of 102
persons (compared with 17 investigations in 2021); of these, 13 are still ongoing (compared
with 11 in 2021) and 8 were closed in 2022 (six in 2021), of which 1 was transferred and 1
dismissed. Seizure measures were applied in nine cases. 27 individuals were indicted, and
eight verdicts were reached, resulting in prison sentences or suspended sentences with
probation. The external oversight mechanism is being implemented. Within the Public
Prosecutor’s Office, the Special Department for investigation and prosecution of crimes
committed by persons with police powers and members of the prison police has only two
investigators. Two posts are vacant. In the reporting period, the Department registered
183 cases against 299 individuals (135 in 2021), 25 verdicts were reached / penalties handed
down, eight cases were transferred, and 74 cases were dismissed.
43
The NCCFOC is operational, and its role and activities increased in 2022. All institutions
participating in NCCFOC nominated their representatives in 2022. The Centre: facilitates the
exchange of data and information among the affiliated institutions; shares information among
institutions on a ‘need-to-know’ basis; coordinates activities among institutions in cases
where more than one received a request about a natural or legal person; and supports the
international exchange of information, especially between police forces.
The Basic Public Prosecutor’s Office for Organised Crime and Corruption has insufficient
human resources and lacks financial resources for expert services. Specialisation within the
Office is needed, as well as a pro-active approach in pursuing cases.
The investigative centres within the Basic Public Prosecution Office, located in Skopje,
Kumanovo and Tetovo, and within the Basic Public Prosecutor’s Office for Organised Crime
and Corruption, are operational, but they still lack sufficient human and financial resources
and adequate equipment to perform properly. These investigative centres have not achieved
their objectives of more efficient investigations and better coordination among prosecutors,
police and other relevant bodies.
The country participates in international police cooperation activities through the main
cooperation channels (INTERPOL, Europol and the South-Eastern Law Enforcement Centre
(SELEC)). The level of cooperation and exchange of information with Europol is good and
increased in 2022. North Macedonia is participating in Europol analysis projects in the field
of organised and serious crime and combating terrorism. The Ministry also provided input for
the development of Europol’s EU serious and organised crime threat assessment (SOCTA).
In 2022, the relevant authorities participated in activities forming part of Europol’s analysis
project ‘Hydra’, on Islamic terrorism.
The National Central Bureau (NCB) INTERPOL Skopje is working on expanding
INTERPOL I-24/7 communication system. Connectivity has been provided with some of the
databases available in I-24/7. The national authorities and NCB INTERPOL are working to
expand access to other databases in that system.
In 2022, 1 887 new cases were opened in the International Police Cooperation Sector (1 429
at NCB INTERPOL, 254 at Europol, 151 at Liaison Officers, and 53 at SELEC). Most cases
concern the illegal drug trade, illegal arms trade, financial and computer crime, violent crime,
motor vehicles, irregular migration and human trafficking, computer crime and missing
persons.
Operational international police cooperation with neighbouring countries includes Albania,
Serbia, Greece and Bulgaria, and has been conducted through established channels: NCB
INTERPOL, Europol National Units, and SELEC.
North Macedonia is participating in the European Multidisciplinary Platform against
Criminal Threats (EMPACT). In 2022, the country participated in 26 operational actions, and
was co-leader of one operational action (part of the operational action plan (OAP) on
firearms). In 2023, North Macedonia has substantially increased its participation in EMPACT
and is involved in 98 operational actions. It is co-leader of four operational actions (two as
part of the OAP on firearms trafficking, 1 as part of the OAP on migrant smuggling and 1 as
part of the OAP on cocaine, cannabis and heroin trafficking). North Macedonia continued to
participate in EMPACT joint action days.
Cooperation with CEPOL has been based on a Working Arrangement since 2017. In
accordance with the EU strategic training needs assessment, 27 specialised/resident training
courses were developed by CEPOL, the EU agency for law enforcement training, and were
44
attended by 150 representatives from the Ministry of the Interior in 2022. Law enforcement
officers also participated in the exchange programme training organised by CEPOL. It is
recommended that the authorities of North Macedonia, with the assistance of CEPOL, design,
prepare and organise targeted training to address the priority training topics at national level
as follows: Counter Terrorism: Prevent; Counter Terrorism: Protect; Counter Terrorism:
Respond; Firearms trafficking; and Environmental crime.
Since 2014, an intelligence-led policing model has been implemented in the Ministry of the
Interior’s Public Security Bureau. The Ministry is now able to detect current needs and set
strategic priorities and activities for each year, for greater efficiency in fight against organised
and serious crime.
The Financial Intelligence Unit conducted four financial investigations against 44 individuals
and four entities in 2022. A total of nine law enforcement officers were assigned to the unit.
There is still a need for additional technical equipment and other material. Access to several
databases was provided and negotiations are underway to provide access to the cadastral
(property) register database.
The Financial Police Office (FPO) currently has five positions for investigators occupied,
with four still vacant. A standard operating procedure for conducting financial investigations
was adopted in July 2022. It conducted 25 financial investigations in 2022. The FPO has
access to several databases of other institutions. An additional database is currently being
developed which connects the FPO database to those of the Customs Office, the Public
Revenue Department and the Ministry of the Interior.
The Sector for Control and Investigation within the Customs Administration initiated a total
of 14 financial investigations against 22 individuals and nine legal entities in 2022. All eight
available positions for executors in the service have been filled. The Customs Administration
adopted a procedure for financial investigations in July 2022.
In May 2023, the Council of Europe's Committee of Experts on the Evaluation of Anti-
Money Laundering Measures and the Financing of Terrorism (MONEYVAL) discussed and
approved a report regarding the country's technical compliance and effective implementation
of the international anti-money laundering and combating the financing of terrorism
(AML/CFT) standards, in accordance with the 2013 Financial Action Task Force (FATF)
methodology. According to the conclusions set out in the evaluation report published in July
2023, the legal framework has improved, but the authorities should further strengthen
measures to combat money laundering, the financing of terrorism and proliferation, in
particular through investigations and prosecutions (see chapter 4).
The Law on prevention of money laundering and financing of terrorism entered into force in
July 2022. The Law aims to align with EU Directive 2018/843, the fifth Directive on the
prevention of the use of the financial system for the purposes of money laundering and
financing of terrorism and to address the revised Financial Action Task Force
recommendations. Additional implementing laws deriving from the Law need to be drafted
and adopted. North Macedonia needs to align its legislation with Directive (EU) 2018/1673
on combating money laundering by criminal law.
In 2022, the authorities managed to freeze assets worth around EUR 40 million, including
cash, land, business premises, apartments, shares and securities. They confiscated assets
worth some EUR 28 million.
North Macedonia is currently implementing its national strategy against human trafficking
and illegal migration. This is accompanied by an action plan and a national strategy against
45
trafficking in children – both covering 2021-2025. The Group of Experts on Action against
Trafficking in Human Beings published its third-round evaluation report on North
Macedonia. Recommendations were made to the authorities to address gaps and weaknesses
in the legal framework and in other areas. To further align with the EU acquis, amendments
to the legislative framework should be adopted, including on the referral to the Centre for
Victims of Trafficking in Human Beings of foreign victims of trafficking in human beings
who cooperate with the authorities. Adequate avenues for compensation for victims should be
provided.
In 2022, 9 victims were identified as part of investigations and prosecutions of perpetrators of
trafficking in human beings. Of these, 8 were victims of internal trafficking while 1 was
exploited abroad (in a neighbouring country). As a result of the investigations, 6 criminal
charges were brought against 19 individuals for alleged trafficking in human beings offences.
In 2022, the Ministry of the Interior filed charges against 210 individuals, accused of
committing 199 crimes involving small arms and light weapons. Moreover, 139 weapons
were seized in 2022. Under the supervision of the State Commission for destroying weapons,
270 seized weapons were destroyed in February 2023.
Concerning cybercrime, in 2022, the authorities registered 287 criminal acts constituting
computer crimes under the Criminal Code, committed by 220 perpetrators. The most
common computer crimes are: ‘damage and unauthorised entry into a computer system’,
‘spreading xenophobic material via information systems’, ‘processing and use of a false
payment card’, ‘endangering safety’.
Regarding online child sexual exploitation, the number of registered crimes in 2022 was 14.
Of the reported crimes, eight were solved and eight perpetrators were identified. The
remaining cases are being investigated. There were seven reported cyber-attacks against
public institutions and public infrastructure in 2022 and 11 against private institutions. The
Ministry of the Interior’s Sector for Computer Crime and Digital Forensics participated
actively in EMPACT.
The Central Register has kept a register of beneficial owners since January 2021, but not all
entities that are required to have provided the necessary information.
In accordance with the Law on payment services and payment systems, a single register of
accounts was set up and maintained by the Central Register. Infrastructure for the register is
currently being constructed, and technical specifications have been defined for the software
and its main components. It is expected that the register will be operational by the second
quarter of 2024.
In the reporting period, witness protection measures were applied in 4 cases.
Cooperation in the field of drugs
Institutional set-up and legal alignment
The national strategy against drugs covers the period 2021-2025 and is being implemented
through a specific action plan. The National Drugs Observatory was set up in 2007, but its
operational capacity remains limited. It lacks resources to cope with its daily drug monitoring
tasks. There is still no national early warning system capable of connecting with relevant
national bodies to enable fast exchange of information about illegal manufacturing and illicit
trade on a national and international level.
46
The European Monitoring Centre for Drugs and Drug Addiction has had technical
cooperation arrangements with North Macedonia since 2007. The focal point for this
cooperation is the Ministry of Health, which also cooperates with the International Narcotics
Control Board, and United Nations Office on Drugs and Crime.
National legislation on drugs, psychotropic substances and precursors does not comply with
the EU acquis or international standards.
Implementation and enforcement capacity
There was a positive trend in the prevention of drug trafficking. A total of 749 crimes were
detected in 2022 (compared with 701 in 2021), leading to criminal prosecution against 9 legal
entities and 853 perpetrators (840 in 2021). Police action broke up 12 organised groups (10 in
2021) with 46 members (36 in 2021).
In 2022, the authorities seized 2 561 kg of marijuana and 8 723 kg of cannabis stems
(18 301 kg for both in 2021) from legal entities with licences for the cultivation of cannabis
for medicinal purposes, which raises concerns about deficiencies in the system for legal
cultivation. Law enforcement authorities need to gain tighter control over those entities and
their activities, to prevent illegal activity and take effective measures against infringements.
Regarding international police cooperation, throughout 2022 the Ministry of the Interior
received 62 pieces of information concerning the illegal trafficking of drugs through
INTERPOL from EU and non-EU countries. The relevant police structures also maintained a
good level of cooperation with Europol, with 481 messages concerning ‘illicit drug
trafficking’ exchanged through Europol’s secure information exchange network application
(SIENA) in 2022. In addition, 18 cases of illicit drug trafficking were opened as a result of
exchanges of information through SELEC.
Harm-reduction activities, one of the main pillars of the country’s drug policy, are
implemented by local CSOs through a nationwide network of national focal points.
Preparatory work was done on the register of drug users by the Institute for Public Health in
cooperation with the Ministry of the Interior. The register now needs to be finalised.
In February 2023, the Agency for the Management of Confiscated Property destroyed
1 400 kg of confiscated drugs and illegal psychotropic substances following a final court
decision.
Cooperation with Eurojust continues. Between April 2022 and February 2023, North
Macedonia was involved in 20 new cases at Eurojust – 17 as requested country and three as
requesting country. Most cases related to money laundering, swindling or fraud. North
Macedonia’s acting Eurojust Liaison Prosecutor was actively engaged in facilitating ongoing
investigations.
Fight against terrorism
Institutional set-up and legal alignment
North Macedonia has a national committee for countering violent extremism and
counterterrorism, but the draft rulebook for its work needs to be adopted.
North Macedonia’s legislative framework is broadly aligned with the EU acquis and
international counterterrorism instruments and is sufficient for the prosecution of individuals
suspected of committing or aiding terrorist activities or participating in foreign wars.
47
National strategies for countering terrorism (2023-2027) and countering violent extremism
(2023-2027) were adopted in May 2023. These are based on the four pillars of the UN and
EU’s global strategies: prevention, protection, prosecution/enforcement and response.
The country continues to implement its national plan for the re-integration, re-socialisation
and rehabilitation of returnees from foreign armies and members of their families. A variety
of activities are implemented daily in the work with foreign terrorist fighters and their
families.
In December 2022, the European Commission and North Macedonia’s Ministry of the
Interior signed a new arrangement for the implementation of a joint action plan on
counterterrorism for the Western Balkans. The arrangement upgrades cooperation on
counterterrorism and action to prevent / counter violent extremism. It requires national
authorities to submit interim reports twice a year.
Implementation and enforcement capacity
North Macedonia submitted in July 2023 a first progress report on the implementation of the
bilateral arrangement. for the implementation of the Joint Action Plan on Counterterrorism
for the Western Balkans. Implementation of the newly signed counterterrorism arrangement
began with some priority activities, undertaken in accordance with the schedule.
At local level, measures to prevent violent extremism and terrorism continue to be
implemented by local councils for prevention, action teams in community, and local
multidisciplinary teams. Two additional local action teams were set up in November 2022 in
Prilep and Struga. Local multidisciplinary teams now operate in 9 municipalities – Skopje,
Kumanovo, Gostivar, Tetovo, Kicevo, Ohrid, Struga, Stip and Prilep – to provide support for
returnees and their families. These teams work in coordination with social service centres.
Greater clarity is needed around the division of powers, tasks and responsibilities between
local and central level, for better cooperation on prevention and countering of violent
extremism. The state needs to adopt additional legal provisions to legitimise and regulate the
activities of local-level bodies.
The practice of handing down light sentences for terrorism-related offences remains a
challenge for prevention efforts, and more effective follow-up is required for convicted
foreign terrorist fighters after they are released from prison.
Radicalisation in prisons remains a concern despite the existence of a strategy on the
penitentiary system (2021-2025) which includes provides measures against radicalisation in
prisons. Online radicalisation should be addressed effectively, which requires better
equipment and training, and human capacity building.
No foreign terrorist fighters were repatriated in the reporting period. In 2022, five individuals
were indicted for allegedly perpetrating five separate crimes involving ‘terrorism’ and
‘participation in foreign paramilitary or para-police formations’. In 2022, 3 cases resulted in
convictions for the crime of ‘terrorism’, of which two were final and one under appeal
procedure. In comparison, court verdicts were passed against four repatriated foreign terrorist
fighters and one person was indicted for terrorism in 2021.
In 2022, the sector dealing with the fight against terrorism, violent extremism and radicalism
located within the Ministry of Interior participated in Europol’s analytical projects on the
fight against terrorism and financing for terrorism. A total of 387 messages were exchanged
with partner services from other countries, through SIENA, Europol’s counterterrorism
platform.
48
The Financial Intelligence Office updated indicators for the recognition of suspicious
transactions potentially linked to the financing of terrorism or proliferation financing. In
2022, a number of strategic analyses were adopted by the Head of the Financial Intelligence
Office, such as the strategic analysis for proliferation finance, a strategic analysis for
transactions through fast money transfer services, and a manual to facilitate the use of
practical indicators for identifying suspicious financial transactions.
A memorandum for cooperation, coordination and exchange of information for effective and
efficient application of the Law on restrictive measures was signed in September 2022 by the
Minister of Interior, the Minister of Foreign Affairs, the Director of the Intelligence Agency,
the Director of the Financial Intelligence Office, the Director of the Agency for National
Security and the Public Prosecutor. Financial restrictive measures were introduced for
15 individuals who participated in foreign armies, police, paramilitary or para-police
formations outside North Macedonia.
Additional multidisciplinary teams were set up within the state prison system to monitor the
behaviour of inmates convicted of terrorism.
Pre-release standard operating procedures and post-penal assistance were introduced for
radicalised convicts.
Judicial cooperation in civil and criminal matters
Progress regarding the legal framework for cooperation in civil and commercial matters was
limited. North Macedonia should ratify the 2005 Hague Choice of Court Convention,
the 1996 Hague Child Protection Convention, the 2007 Hague Child Support Convention
and its Protocol on Applicable law, which have been already signed. Furthermore, the
country should take the necessary steps to ratify the 2019 Hague Convention on the
Recognition and Enforcement of Foreign Judgments in Civil or Commercial Matters (the
‘Hague Judgments Convention’).
The Ministry of Justice’s Criminal Department is currently understaffed, with just a head of
department and four civil servants, out of a planned seven.
In 2022, there were 789 incoming and 220 outgoing requests for mutual legal assistance in
civil matters (compared with 429 incoming and 141 outgoing in 2021). The requests are
forwarded to the relevant authority within seven days.
In 2022, there were 1 147 incoming and 824 outgoing requests for mutual legal assistance in
criminal matters (compared with 856 incoming and 233 outgoing requests in 2021). These
cases have not been fully processed and the Ministry of Justice does not have accurate data
on the number of ongoing procedures.
Cooperation with Eurojust continues. The Ministry of Justice issued Rules on cooperation
between the State PPO, the Ministry of Justice and Eurojust. These Rules are based on the
2021 Law on international legal cooperation in criminal matters. North Macedonia’s acting
Eurojust Liaison Prosecutor was actively engaged in facilitating ongoing investigations. The
procedure for selecting a permanent Eurojust Liaison Prosecutor, upon a call published in
December 2022, is ongoing.
In October 2022, the European Public Prosecutor’s Office and North Macedonia’s State
Public Prosecutor’s Office concluded a working arrangement.
49
Legal and irregular migration
Institutional set-up and legal alignment
The legal framework for migration is largely in line with EU standards. The state of crisis
declared at the country’s borders was further extended until the end of December 2023,
allowing for the continued deployment of the army.
The Ministry of the Interior is the main operator in the field of migration.
North Macedonia has a series of strategic documents in place on migration: the 2021-2025
national strategy for integrated border management with an action plan for implementation
(2022-2025); the resolution on migration policy for 2021-2025; the 2021 migration profile
and the 2019-2023 national strategy for cooperation with the diaspora. The new strategy for
the integration of refugees and foreigners has been pending adoption since September 2021.
A contingency plan to manage large migratory flows still needs to be finalised and adopted.
North Macedonia participates in the regional Anti-Smuggling Operational Partnership with
the Western Balkans launched in November 2022 to support law enforcement and judicial
cooperation against criminal smuggling networks and to increase border management
capacities.
Implementation and enforcement capacity
The country continued to play an active role in the management of mixed migration flows.
Further efforts were made to ensure basic living conditions and services for all migrants in
North Macedonia. However, there is a need to enhance institutional and administrative
capacities for all aspects of migration management by increasing the number of employees
and by providing additional material and technical resources. As of April 2023, Frontex has
been deployed and has provided operational support on the country’s southern border.
The strategic framework should be further strengthened, particularly on implementation of
support measures. While registration of migrants resumed in 2021, the lack of adequate
protection-sensitive profiling needs addressing as a priority. Better, more systematic
registration and protection-sensitive profiling is required. The fragmentation of tasks between
the multiple institutions dealing with migration makes migration management less effective.
Implementation of the in-depth assessment (masterplan) for North Macedonia developed by
Frontex last year is still pending.
The readmission agreements and implementing protocols signed with eight EU Member
States continue to be implemented. Four additional agreements are under negotiation. In
addition, North Macedonia has bilateral readmission agreements with eight non-EU countries
(six further agreements are being negotiated). Cooperation with neighbouring countries
continues to be satisfactory. However, there is room for more cross-border cooperation with
neighbouring countries in implementing returns and addressing trafficking in human beings
and smuggling of migrants.
The number of irregular movements through North Macedonia increased, with
27 391 irregular arrivals in 2022 compared to 20 874 in 2021. Most of these people were
travelling from Greece towards Serbia. Nationals of Syria (11 018), Pakistan (5 594) and
Morocco (2 541) constituted the largest groups, most of whom were single males. Irregular
migrants in transit remain targets for organised criminal groups engaged in people smuggling,
who often extort money and abuse the migrants in various ways. A new phenomenon in the
Western Balkans is the misuse of North Macedonia´s visa-free regime by individuals coming
50
from Türkiye, Tunisia, India, Burundi and China, among others. North Macedonia re-
introduced visa requirements for nationals of Azerbaijan, Botswana and Cuba.
In 2022, 107 cases of smuggling were detected, involving 1 454 migrants (compared with
64 cases involving 815 migrants in 2021 – an increase of 67.2% and almost 80%
respectively). The number of migrants smuggled remained high and combating smuggling
networks remains a priority.
Regular reception capacity was unchanged and is appropriate to current needs. The arbitrary
detention of persons apprehended in irregular movements for the purpose of taking
statements as evidence before the Criminal Court remains an issue of concern. The
percentage of asylum applications registered at the reception centre for foreigners in Gazi
Baba significantly increased to 62.5% in the first quarter of 2023, from just 8% in 2022.
Since the attempt to build a new EU-funded reception centre for foreigners was blocked by a
government decision in October 2021, no improvements have been made in the existing
reception centre, where living conditions are poor and basic rights are not respected. The
National Preventive Mechanism within the Ombudsman repeatedly pointed out that this
facility does not meet the required standards for hosting persons with restricted freedom of
movement. The detainees do not receive the information about legal remedies they would
need to fully understand their legal status or the length of detention.
Two temporary transit centres providing short-term housing remain operational (Vinojug
capable of housing 1 500 persons and Tabanovce with a capacity of 500). However, both
transit centres are unsuitable for longer stays and the legal status of both centres breaches
international standards. The lack of legal oversight over migrants’ freedom of movement in
the Vinojug transit centre is also a major issue.
Since the summer of 2021, North Macedonia has temporarily hosted some
791 evacuees/refugees from Afghanistan. By September 2023, 674 had been resettled. Since
March 2022, North Macedonia has been hosting refugees from Ukraine. By September 2023,
67 151 Ukrainians have arrived in North Macedonia, 48 807 of which left the country. By
June 2023, 405 Ukrainians had received temporary residence in North Macedonia on
humanitarian grounds. Under the Law on foreigners, temporary residence means the right to
legally reside in the country for 1 year with the possibility of extension.
There are 235 Roma, Askhali and Egyptian individuals from Kosovo*
in the country,
including 11 with refugee status, 64 under subsidiary protection and approximately 160
whose protection status has ended. The individuals remain in a vulnerable situation due to the
lack of legal status and insufficient access to basic rights.
In 2022, a total of nine persons were assisted with voluntary returns to their countries of
origin within the assisted voluntary return and reintegration programme.
Asylum
Institutional set-up and legal alignment
The asylum sector in the Ministry of the Interior is the authority responsible for asylum
procedures. The Law on international and temporary protection is largely aligned with the EU
acquis. However, efforts are still needed to improve information and counselling in detention
facilities and at border crossings. Efforts are also needed to improve personal interview and
border procedures. Further efforts are needed to improve working rights of applicants for
*
This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and the ICJ Opinion on
the Kosovo declaration of independence.
51
international protection, and access to a personal identification number so they can work,
open a bank account and manage property. Furthermore, there is a need for the current
legislation to provide alternatives to detention for persons involved in irregular movements.
Further efforts are required to improve delays in family reunification for persons under
subsidiary protection, particularly for unaccompanied minors. Delays can be counter to the
principle of the best interest of the child.
Under the Law on foreigners, persons who enjoy international protection can be granted long-
term residence. However, they must still present proof of regular income and a registered
place of residence to benefit from this provision. Given the vulnerability of some applicants,
notably Roma people from Kosovo under subsidiary protection, there is a risk that the rights
under this provision remain theoretical, without practical implementation. The existing
database on foreigners still needs to be upgraded with a new asylum module to provide a case
management tool for processing asylum claims. There is no backlog of asylum cases. Most
cases are discontinued due to the high rate of claim abandonment.
Implementation and enforcement capacity
Implementation of asylum procedures is not fully aligned with the EU acquis. Developing the
asylum authorities’ administrative capacity remains a challenge, particularly as regards the
recruitment and retention of highly qualified and dedicated staff, which is a prerequisite for
high-quality administrative processing of asylum claims. The government has not invested
enough in improving the asylum system, for example by through funding, technical expertise
and staff to fill specific roles.
There is no problem with access to the asylum procedure and asylum claims are promptly
registered and processed. However, the quality and speed of asylum decisions remains of
concern. Most of those granted subsidiary protection are vulnerable persons and
unaccompanied minors. Decisions are based on humanitarian needs but without proper
consideration of the merits of the claim. The overall length of the entire asylum procedure is
unreasonable; it may last for several years from initial registration of an asylum claim.
The Administrative Court and the High Administrative Court take decisions on procedural
grounds rather than on the merits of individual asylum claims. The cases returned to the
administrative authority remain unchanged despite court rulings. This lengthens the asylum
procedure, without providing asylum-seekers with an effective remedy. The practice
continued of holding in-person hearings with attorneys and asylum officials present but
without the asylum-seekers themselves. Although guaranteed by law, no procedure has been
implemented to adequately cater for persons with specific needs. Furthermore, decisions on
expulsion are made with no quality assessment, and without the necessary steps being taken
to ensure that returning asylum-seekers will not be subjected to persecution in their country
of destination.
A lack of personal identification numbers for asylum-seekers and persons under temporary
protection remains unaddressed and is a critical gap in the legal protection of rights.
Further efforts are needed to ensure that the children of asylum-seekers are provided with
proper educational services in accordance with the Law on primary education. There is a lack
of national data on refugee and asylum-seeker children in primary and secondary education.
In 2022, 168 asylum applications were submitted (compared with 100 applications in 2021),
with most applicants coming from Syria (49%), Morocco (10%), Afghanistan (6%), Türkiye
(5%) and Iraq (5%). The registration of asylum applications is not integrated, with different
entities within the Ministry of the Interior being involved. These include police stations
52
where applications are first registered, reception centres and the Sector for Asylum. By the
end of 2022, the Sector for Asylum had conducted 14 asylum interviews (mostly online),
rejected 20 asylum applications, and granted no form of international protection (refugee
status has not been granted to anyone since 2016), while most decisions were written off due
to high rates of absconding. In the first quarter of 2023, 71 asylum applications were
registered, a 500% increase compared to the same period in 2022. Most of the applicants
came from Afghanistan, the Democratic Republic of the Congo, Pakistan and Syria.
The roadmap for cooperation agreed on between the European Union Agency for Asylum
and North Macedonia for the period October 2020–September 2022 remained an important
tool for: strengthening the asylum system, particularly for persons with special needs and
unaccompanied minors; strengthening the training system on asylum and reception;
increasing the quality of asylum decisions; and strengthening the reception system for
vulnerable migrants and unaccompanied minors.
Visa policy
The national visa regime is largely aligned with that of the EU. To date, only Türkiye is
accessible without visa for North Macedonia but not for the EU. In January 2023, North
Macedonia reintroduced a visa requirement for nationals of Botswana and Cuba. The
decision to temporarily allow nationals of Azerbaijan to enter North Macedonia without a
visa expired in March 2023 and was not extended. The Commission’s sixth report under the
Visa Suspension Mechanism of 20237
concluded that North Macedonia continued taking
action to address the Commission’s previous recommendations and recommended North
Macedonia to continue this good progress. North Macedonia has a high level of compliance
with International Civilian Aviation Organisation standards. The visa sticker meets the EU
requirements.
Schengen and external borders
Institutional set-up and legal alignment
The legislative framework for the management of North Macedonia’s external borders is
largely aligned with the EU acquis. The Department of Border Affairs and Migration is a
specialised unit within the Ministry of the Interior. The country has eight border crossing
points. The border police are structured into four regional centres, within which police
stations for border surveillance and border checks operate. North Macedonia has a National
Coordination Centre for Border Management.
A new integrated border management strategy for 2021-2025 was adopted in 2022. It aims to
achieve safe and open borders that allow fast and secure transit of passengers and goods,
while enabling effective measure to be taken against irregular cross-border activities.
Implementation and enforcement capacity
A Status Agreement for operational cooperation in border management with Frontex was
signed in October 2022, including a Macedonian language version. Following the entry into
force of the status agreement on 1 April 2023, a North Macedonia 2023 joint operation was
launched on 19 April with the deployment of 110 officers to provide support for border
control and the management of irregular migration and cross-border crime along the entire
border section with Greece. Reinforcing controls along North Macedonia’s borders will help
increase security at the EU’s external borders.
7
COM(2023) 730 final
53
Cooperation with the border services of Albania, Bulgaria, Kosovo8
and Serbia is carried out
in accordance with the Schengen catalogue of recommendations and best practice. The
following agreements were signed and are being implemented: Agreement on freedom of
movement with identity cards (Western Balkans); Agreement on regulation of local traffic;
and Agreement on systematic prosecution of perpetrators of crimes. In 2022, a total of
786 meetings and other contacts at all levels were held with these countries’ border services
(compared with 708 in 2021); 355 mixed patrols were carried out (compared with 96 in
2021); and 1 247 information exchanges took place through the Joint Contact Centres
(compared with 1 988 in 2021). There are no mixed patrols with Greece and no Joint Contact
Centre has yet been set up.
In 2022, 85 disciplinary procedures were conducted against police officers from the
Department for Border Affairs and Migration and from the four regional centres for border
affairs. These procedures resulted in 54 fines, 11 dismissal decisions and one warning;
19 procedures were terminated. In 2022, an investigative procedure was launched in a case
established in 2021 against 11 persons for criminal offences under Articles 353 (abuse of
official position and authorisation) and 357 (receiving a bribe) of the Criminal Code, and in
March 2023, an indictment was filed against five persons for the crimes of criminal
association and of receiving bribes and against one person for the crime of receiving a bribe.
All aspects of customs cooperation are now covered in Chapter 29 – Customs Union.
54
2.3. ECONOMIC CRITERIA
In line with the conclusions of the European Council in Copenhagen in June 1993, EU
accession requires the existence of a functioning market economy and the capacity to cope
with competitive pressure and market forces within the Union.
2.3.1. The existence of a functioning market economy
North Macedonia has made some progress and is at a good level of preparation in
developing a functioning market economy. In 2022, the economy was badly hit by the fallout
from Russia’s war of aggression against Ukraine, which significantly slowed down its post-
COVID recovery. The government supported households and businesses through large-scale
energy subsidies, tax reductions and targeted direct income support. Owing to an inflation-
driven boost to tax income and under-execution of several expenditure categories, the general
government deficit remained below the revised target. Capital expenditure was raised
significantly, but still fell short of the revised plan. The public debt ratio dropped, but remains
significantly above pre-COVID-19 levels. The central bank tightened its policy stance further
in view of still elevated inflationary pressures, which began to subside gradually towards the
end of 2022 and beyond. The current account deficit rose substantially as energy import
prices surged, but external financing needs were met with the help of market-based and IMF
borrowing.
A new Organic Budget Law (OBL) provides for the introduction of fiscal rules and a fiscal
council, considerably strengthening fiscal sustainability. However, progress has been slow in
implementing wider-ranging measures to improve the management of public investment,
vital for underpinning the government’s plans for a sizeable increase in capital expenditure.
2020 2021 2022
North Macedonia - Key economic figures
GDP per capita (% of EU-27 in PPS)
1)
37 38 42 42
Real GDP growth 3.0 -4.7 3.9 2.1
Economic activity rate of the population aged 15-64 (%), total 65.3 65.5 66.8 66.4
female 52.3 54.0 55.1 54.3
male 77.8 76.7 78.4 78.4
Unemployment rate of the population aged 15-64 (%), total
2)
23.2 16.6 15.8 14.5
female 22.9 16.1 13.8 12.6
male 23.4 16.9 16.9 15.9
Employment of the population aged 15-64 (annual growth %)2)
2.7 -0.5 n.a. n.a.
Nominal wages (annual growth %) 3.2 8.3 5.7 11.1
Consumer price index (annual growth %) 0.5 1.2 3.2 14.1
Exchange rate against EUR 61.57 61.67 61.63 61.62
Current account balance (% of GDP) -1.4 -2.9 -3.1 -6.0
Net foreign direct investment, FDI (% of GDP) 3.1 1.4 3.3 5.2
General government balance (% of GDP) -2.8 -8.0 -5.4 -4.5
General government debt (% of GDP) 39.4 51.9 51.8 51.1
Notes:
1) Eurostat
2) From Q1-2022, the Labour Force Survey is based on the results of the 2021 population census,
restricting comparability with previous year's data. In a first step, the Statistical Office has recently
revised 2021 data based on census data.
Source: national sources
2014-19
average
55
The banking sector was resilient throughout the crises, and financial stability was bolstered
by progress on some key legislation. The labour market showed some improvement, but
structural problems persist, including high youth and long-term unemployment rates and a
large gender gap. The business environment continued to be impeded by the large size of the
informal economy, slow progress in streamlining parafiscal charges and an opaque and
inefficient State aid regime.
Last year’s recommendations were only partly implemented and remain partially valid. To
improve the functioning of the market economy, North Macedonia should in particular:
→ provide targeted and temporary support to vulnerable households and firms to cushion the
impact of the energy crisis, if needed, and at the same time start to phase out untargeted
subsidies to the energy sector;
→ adopt and submit to Parliament the next set of revenue-enhancing measures, in line with
the tax system reform strategy;
→ accelerate implementation of the public investment management action plan, in particular
by ensuring the new Department for Public Investment Management in the Ministry of
Finance becomes fully staffed and operational;
→ strengthen access to active labour market measures, in particular for the low-skilled
unemployed and people in vulnerable situations.
Economic governance
The government provided fiscal support to help the economy cope with rising price
pressures, but progress on important reforms was slow. While phasing out the broad-
based pandemic-related support measures adopted in 2020 and 2021, the government adopted
two sets of – partially – better targeted and temporary measures in 2022, to ease the burden of
high food and energy prices on households and small business. These include a temporary
reduction in the VAT rate on electricity for households, as well as sizeable subsidies for the
state-owned electricity producer, ESM, which supplies the electricity to the universal supplier
in the regulated market, to lower the price of electricity for its customers. It currently satisfies
100 percent of the demand of the regulated market, through government decision. Through
the Law on financial support for socially vulnerable categories of citizens to deal with the
energy crisis, adopted in November 2022, the government has provided targeted direct
income support. It also introduced temporary price caps on certain food products, which were
lifted on 1 June 2023. The new Organic Budget Law, enacted by Parliament in September
2022, introduced fiscal rules and a fiscal council as well as an improved medium-term budget
framework. However, progress has been slow in other key reform areas. Improvements to the
management of public investment are hampered by staffing and IT issues. Some of the public
revenue-enhancing tax reforms adopted by the government in December 2022, which aim to
reduce tax exemptions, were stalled in Parliament. The new legal framework for public-
private partnerships (PPPs), which would address a number of shortcomings in the
management of PPPs and of concessions, has yet to be adopted by the government. The
government has advanced in implementing the green transition, notably by adopting major
legislation to increase the use of renewable energies.
The policy guidance jointly agreed on at the May 2022 Economic and Financial
Dialogue between the EU and the Western Balkans and Türkiye has been partially
implemented. The country benefits from EU budget support worth EUR 80 million to
cushion the impact of energy price increases on households, small and medium-sized
enterprises and public service providers, of which EUR 72 million was disbursed in March
56
2023. In November 2022, the country received the first EUR 110 million tranche from an
arrangement under the IMF’s Precautionary and Liquidity Line (PLL)9
. On 12 July 2023, in
view of the country’s large financing needs in 2023 and 2024, and following a request from
the government, the Council and the European Parliament endorsed a Commission proposal
for macro-financial assistance to North Macedonia of up to EUR 100 million.
Macroeconomic stability
GDP growth slowed, as the economy was
hit by the fallout from Russia’s war of
aggression against Ukraine. Following a
partial recovery from the recession caused
by the COVID-19 pandemic, annual GDP
growth slowed down to 2.1% in 2022, from
3.9% in 2021, as external demand
weakened, disruptions in global supply
chains persisted, and global food and energy
prices rose rapidly. Trade dynamics were
buoyant, but the rate of import growth
exceeded the export growth rate, which meant that external trade made a negative
contribution to economic growth. Investment rose strongly, partly on account of the build-up
of stocks of intermediate products and raw materials, as companies anticipated further price
rises. Private consumption growth slowed sharply despite being bolstered by remittances
from abroad and government support measures. While industrial production and construction
output declined, the service sector continued its post-COVID trend of strong annual
increases. In the first half of 2023, annual GDP growth dropped to 1.6% on average.
Convergence with EU income levels has been slow, with real GDP per capita increasing from
37% of the EU-27 average in 2017 to 42% in 2022.
Reflecting the country’s large dependence on energy imports and surging import prices,
the external position deteriorated in 2022. The current account deficit rose markedly in
2022, to 6% of GDP from 3.1% in 2021,
much above its average in the pre-COVID-19
period 2017 to 2019 (1.5%). This rise is
accounted for by a widening energy trade
deficit, which reflects the country’s high
dependence on energy imports and
skyrocketing international energy prices. In
addition, in an uncertain environment,
companies built up their inventories of
imported production inputs. Deterioration in
the energy and trade balance in 2022 was
partly offset by a sizeable increase in private transfers (remittances) and in the services
surplus, helped by a rebound in tourism. In the first half of 2023, the merchandise deficit has
narrowed sharply, in annual terms, largely reflecting the drop in energy import prices and
driving a large improvement in the current account balance. Foreign direct investment (FDI)
inflows recovered after a fall triggered by the COVID-19 pandemic, increasing to 5.2% of
GDP in 2022, and almost covered the surging deficit. External debt amounted to 84.3% of
9
The IMF’s first review of the PLL program has been delayed from April 2023, mainly as the IMF is seeking more clarity on the fiscal
implications of the (single-sourced) contract with the US-Turkish consortium Bechtel-Enka to build a EUR 1.6 billion (around 10 percent of
GDP) highway section of Road Corridor 8/10d.
-12
-8
-4
0
4
8
2017 2018 2019 2020 2021 2022
Graph 3.1: North Macedonia -
Real GDP growth and contributions
Priv. cons. Gov. cons. GFCF
Stocks Net exports Real GDP growth
Source: WiiW
% y-o-y
-12
-9
-6
-3
0
3
6
-24
-21
-18
-15
-12
-9
-6
-3
0
3
6
9
2018 2019 2020 2021 2022
Graph 3.2: North Macedonia - Current account
selected components and FDI
Workers' remittances balance Goods and services trade balance
Current account balance (rhs) Net FDI (rhs)
% of GDP
Source: National Bank of North Macedonia and State Statistical Office
57
GDP at end-2022 (+2.3 percentage points (pps) year on year), with long-term debt accounting
for the bulk of the total (70%). The increase was largely due to a rise in private intercompany
lending, which is an important instrument for improving liquidity for foreign-owned
companies in the country. About 40% of total external debt is made up of intercompany loans
and trade credits, which is a less risky and more flexible category of debt.
Foreign reserves have more than recovered following pressures in the first half of 2022.
Exchange markets dropped sharply in the first half of 2022 (-14% year on year at end-June
2022), mainly on account of increased conversion of domestic denar-denominated savings
into euro-denominated deposits, surging energy imports, and high external debt payments.
Subsequently, however, the exchange markets stabilised, supported by a good tourism season
in 2022, external market borrowing, including a EUR 250 million private placement of
government securities in Germany in September 2022 and a EUR 500 million Eurobond
issuance in March 2023, as well as the disbursement of the first instalment from an
arrangement under the IMF’s Precautionary and Liquidity Line (PLL). Inflows from foreign
direct investment surged in 2022, catching up after a pandemic-related trough, but became
more muted in 2023 so far. Foreign reserves declined again with the government’s
redemption of the 2016 Eurobond in July 2023. At the end of August 2023, they stood higher
by 26% y-o-y, corresponding to around 4 months of prospective imports. The denar has
remained in a stable, de facto pegged exchange rate regime with the euro.
Monetary policy was appropriately tightened in view of persistent inflation. Annual
average inflation in 2022 was at a record high of 14.2%, driven by the global energy and food
price shock. The annual inflation rate peaked at 19.8% in October 2022, which was more than
in peer countries in the region, before abating gradually to reach 8.3% in August 2023. Core
inflation, however, has remained persistent, reflecting the high transmission from the recent
energy price hikes into core sectors of the economy such as industrial production, transport,
and hotels and restaurants. Appropriately, the central bank continued its tightening of
monetary policy throughout 2022 and beyond. It raised the policy rate by 495 basis points in
ten consecutive steps between April 2022 and August 2023, to 6.15%, thereby increasing the
spread to the European Central Bank (ECB) policy rate. Furthermore, it adjusted reserve
requirement rates, both in June and September 2022, and again in August 2023, to dis-
incentivize shifts into euro deposits, that were a significant factor behind the drop in foreign
reserves in early 2022. It also eased reserve requirements for bank lending for renewable
energy projects. A 2020 repo line from the ECB, intended to provide Euro liquidity to the
central bank, was extended in 2022. Concerns about the operational independence of the
central bank persist, as the central bank has not been exempted from the draft laws on
administrative servants and the Law on public sector employees. Overall, the monetary policy
stance has been in line with current economic fundamentals, responding to market
expectations of further rising inflation, while mitigating the negative impact on the economy
stemming from the pandemic and the energy crisis.
An inflation-driven boost to tax revenue and under-execution of expenditure
underpinned the lower-than-projected budget deficit in 2022. The fiscal deficit came in at
4.5% of GDP, down from 5.4% in 2021 and remaining below the revised target of 5.3% of
GDP adopted in the July 2022 budget revision. Central government revenue rose by 11.3%
compared with 2021, driven by a 22.4% surge in VAT receipts. Current expenditure
increased by 6.9% in 2022, which was less than the 8.3% increase in total expenditure. At
89.2% of budget, implementation of capital expenditure was higher than the average for the
previous 5 years. The government has phased out some untargeted support measures. VAT
on electricity for households was raised from the reduced 5% rate to a still reduced 10% on
58
1 January 202310
and was normalised to the standard rate of 18% from 1 July. Several
expenditure categories, most notably transfers to the state-owned electricity company, ESM,
and capital expenditure, on the other hand, were heavily under-implemented in 2022. In
January-July 2023 the budget deficit stood at 2.9% of the projected full-year GDP, with a
weak performance on the revenue side from VAT, in particular. In July, the government
raised public sector wages by 10%, effective from September 2023, and subsequently
adopted a budget reallocation in order to accommodate the additional expenditure within the
initial deficit target of 4.6% of GDP. In the 5 years preceding the pandemic, the general
government fiscal deficit declined each year, in terms of GDP, partly on the back of under-
execution of budgeted capital expenditure, before jumping to 8.2% of GDP in 2020 as the
COVID-19 crisis hit public finances. The revenue ratio has remained largely unchanged at a
relatively low level (2022: 30.6%) in the past 5 years, suggesting the need to take further
measures to increase public revenue. The expenditure structure remains dominated by
transfers to the pensions fund (2022: 28% of total expenditure), where a recent policy
reversal back to linking annual pensions increases to both prices and average wages, has
further exacerbated the financing pressures.
Inflation helped lower the public debt to GDP ratio in 2022 which however remains well
above pre-pandemic levels. After having increased by some 10 pps to more than 50% in
2020, the general government debt-to-
GDP ratio stabilised in 2021, and
subsequently posted a slight decline in
2022 (-1.1 pps year on year to 50.9% of
GDP). The public debt ratio dropped by
more (-1.2 pps), to 59.8%, reflecting a
decrease in the debt of public enterprises.
Still, in nominal terms, the debt stock
gradually increased further also in 2022
and in the first half of 2023. At the end of
June 2023, the general government debt
level was higher by 19.3% compared to end-21. The share of fixed interest rate debt in total
debt remained high throughout 2022 (74% at end-year) but stood somewhat lower than one
year earlier (-1.3 pps). External debt accounted for some 60% of total general government
debt at the end of 2022, the same as in 2021. Foreign currency debt, mostly denominated in
euro (92% of total foreign currency debt), accounted for 76% of total debt (also unchanged
year on year). The de facto exchange rate peg to the euro limits debt vulnerabilities stemming
from fluctuations in the value of the denar. In March 2023, the government successfully
issued a Eurobond, its ninth since 2005, for EUR 500 million, for refinancing the 2016
Eurobond (EUR 450 million) repayment in July 2023. The country has a proven track record
of timely debt repayments.
The fiscal framework has been strengthened through a new Organic Budget Law
(OBL), but deficiencies in public finance management remain. In September 2022,
Parliament passed the OBL, which provides for the introduction of fiscal rules and a fiscal
council and strengthens the medium-term budget procedure. Key provisions, such as the
fiscal rules, are due to enter into force in 2025. Preparations for setting up the new fiscal
council are advancing, with the members of the council nominated and appointed by
Parliament in September 2023. However, the adoption of by-laws, which is necessary for the
full implementation of the OBL, is not progressing. Furthermore, shortcomings in revenue
10
The planned increase from 5% to 10% had been postponed from July 2022 to January 2023.
0
20
40
60
80
-9
-6
-3
0
3
2017 2018 2019 2020 2021 2022
Graph 3.3: North Macedonia - Fiscal developments
Primary balance (lhs) Interest (lhs)
CG balance (lhs) Public debt (rhs)
Source: National sources
% of GDP
59
collection and a large number of tax exemptions eroding the tax base hamper a potential
increase in public revenue ratios. In December 2022, the government adopted tax policy
reform measures in the areas of personal income tax, corporate income tax, and value-added
tax, with a view to broadening the tax base. While amendments to the Law on Personal
Income Tax entered into force in January 2023, amendments to the Law on Corporate Income
Tax, to the Law on Value Added Tax, as well as a new Law on the Solidarity Tax were
adopted by Parliament only in September 202311
. Implementation of measures to improve the
planning, allocation and execution of public investment projects, as presented by the
government in its 2021 Action Plan, is progressing only slowly, hampered by staff shortages
and IT requirements. The government set up a dedicated unit for public investment
management in the Ministry of Finance in December 2022, to ensure centralised oversight of
public sector investment, but it still has to become fully operational.
Fiscal risks are sizeable and not always well monitored. Risks to the government’s fiscal
consolidation plans have increased, notably from the government’s March 2023 contract with
the Bechtel-Enka consortium for the construction of part of Road Corridor 8/10d. The project
is expected to cost EUR 1.3 billion (10% of 2022 GDP) and to be completed over a 6-year
period, with EUR 215 million (1.7% of 2022 GDP) earmarked in the 2023 budget. A special
law that replaces standard public procurement rules for this project has been adopted and
enacted by Parliament. To solidify the fiscal cost and manage fiscal risks, in particular recent
rises in construction costs and uncertain cost evolution of the project, the IMF requested the
authorities to provide an independent due diligence study as a structural benchmark under the
2022 precautionary and liquidity line for North Macedonia, which is delayed. Further fiscal
risks stem from expenditure arrears, which remain consistently above 3 percent of GDP, as
well as from public sector wage growth, and the July 2023 decision by the government to link
future rises in public sector wages to average wage growth, in addition to price developments.
The rising pensions bill poses further risks to fiscal sustainability, also exacerbated by the
recent change in the indexation formula. The steep rise in minimum wages (+12% as of April
2023), in line with the new methodology for alignment adopted in 2022, further impacts on
general wage and pension developments. Some fiscal risks, such as contingent liabilities
arising from PPPs and other off-budget entities are not systematically reported to the central
government12
.
The policy mix has been somewhat inconsistent, in addressing the challenges posed by
the cost-of-living crisis and high energy imports, but financial and macroeconomic
stability was secured. Monetary policy was appropriately tightened in view of soaring
inflation, and measures to promote savings in domestic currency (‘denarisation’) were
stepped up, which contributed to the stability of the exchange rate. Fiscal support to
households and companies, on the other hand, could have been better targeted and fiscal
consolidation plans could be more ambitious, also in order to help monetary policy to contain
inflation. Energy subsidies remained large, against the background of falling market prices.
Furthermore, the government’s decision to revise the indexation mechanism of public wages
and the minimum wage from 2024 is likely to fuel domestic price pressures and put at risk
fiscal consolidation plans. Further improvements in the fiscal framework, such as monitoring
and addressing fiscal risks and improving public investment management, would make a
11
Furthermore, in August 2023, the government passed tax base-broadening amendments to the Excises Law, with parliamentary adoption
still pending. These changes include the introduction of ad-valorem excise for cigars and cigarillos at 9 percent and the introduction of the
new excise calendar that envisages a gradual increase of specific excises over time.
12
There is a requirement in the new Organic Budget Law for the government to include a description of fiscal risks (at a
minimum those pertaining to the government’s contingent liabilities) in the annual fiscal strategy; and for the Fiscal
Council to assess fiscal risks relating to various public entities, including public enterprises and public-private
partnerships.
60
significant contribution to further safeguarding macroeconomic stability and raising the
economy’s growth potential.
Functioning of product markets
Business environment
Challenges in the business environment are undermining the competitiveness of
domestic companies, investment and global value chain integration. North Macedonia’s
economy relies heavily on its integration in global value chains, in particular in the
automotive sector, with export-destined production concentrated among a few firms. The
reliance on imported inputs makes the economy vulnerable to external shocks. These
competitive pressures are exacerbated by low productivity, partly stemming from a lack of
skills and from sluggish adoption of innovation and new technology, as well as by a complex
legal and regulatory environment and the large informal economy. The impact of the
COVID-19 pandemic and Russia’s invasion of Ukraine has intensified these structural
challenges. The government’s approach to simplifying the business environment is not
sufficiently systematic and consistent.
The government has progressed somewhat in streamlining the array of parafiscal
charges. Activities to optimise, consolidate and streamline parafiscal charges are ongoing.
The government has tasked the Ministry of the Economy with coordinating the process, but
the decision to streamline 100 selected parafiscal charges will have to be adopted by the
government as a whole. Implementation of other key measures to improve the business
environment is protracted, such as implementation of the 2019 Law on inspection supervision
and implementing transparent and consistent procedures for inspections. The new Bankruptcy
Law, intended to facilitate market exit by reducing the cost and duration of procedures, has
not yet been adopted. The use of fast-track procedures for public consultation has not abated,
while quality control and ex post follow-up to consultations remains deficient. Work is
ongoing to upgrade the e-portal in order to develop a more user-oriented service delivery.
The number of registered users and completed services on the portal is increasing, but
remains below expectations. Many of these services remain purely informational and cannot
be fully performed online (OECD, 2022).
Challenges posed by the large informal economy are not addressed in a decisive
manner. The informal economy continues to present a major obstacle to business operations.
According to IMF estimates, it likely accounts for as much as 38% of GDP13
. The number of
informal employees as a proportion of total employees is estimated to have decreased from
18.6% in 2018 to 13% in 2022. Implementation of the government’s 2018 Strategy and
Action Plan to combat the informal economy remains sluggish, particularly regarding the
formalisation of undeclared workers. In October 2022, to enable more efficient coordination
between relevant institutions and stakeholders, the Ministry of Finance took over
responsibility for preparing the new 2023-2027 Strategy for Formalisation of the Informal
Economy with an Action Plan which were adopted by the government in September 2023.
The government adopted tax legislation at the end of 2022 to strengthen the tax-paying
culture and thereby fight the informal economy. The country’s informal sector takes various
forms, of which the most prominent are unregistered labour, partially undeclared wages and
other irregularities in the enforcement of the Labour Relations Act.
State influence on the product market
The transparency and efficiency of State aid remains deficient. Instead of tackling the
13
The IMF figure is at the upper range of estimates.
61
country’s underlying structural challenges and business environment issues, the government’s
flagship policy to attract FDI and improve domestic firms’ competitiveness relies on
providing various forms of State aid to businesses. The effects of State aid on efficiency and
competition have not yet been assessed. The transparency and effectiveness of State aid is
affected by the high number of State aid providers, the lack of an updated registry, and the
still marginal powers of the Commission for the Protection of Competition in State aid
supervision. The public information provided by the government on State aid to companies
remains incomplete and the criteria for the selection of beneficiaries are often unclear. As a
precondition for the establishment of a State aid registry, the government is setting up a
management information system connecting different institutions, but overall, the process is
delayed. There is no strategy for properly determining priorities, goals and policies for
investment activities in the country’s technological industrial development zones.
Competition in the energy market is increasing. While the energy market was fully
liberalised in 2019, almost all households and small companies remain in the regulated
electricity market being provided with heavily-subsidized electricity. In the last quarter of
2022, 24 639 consumers (per metering point) purchased electricity from active suppliers in
the open electricity market, according to mutually agreed (unregulated) prices. This makes up
about 55% of the market, compared to some 53% at the end of 2019. In 2022, there were
18 electricity suppliers in the open market and one electricity supplier in the regulated
electricity market. An increasing number of consumers have been switching electricity
suppliers. In 2019, 2 350 consumers switched supplier. In 2020, that figure rose by 10.8% to
2 603 consumers, in 2021 by a further 37.1% to 3 568 consumers and in 2022 by 11.7% to
3 986 consumers.
Privatisation and restructuring
The public sector’s stake in the economy remains low. In 2022, the number of companies
in full-state ownership declined by two, to 15, compared to the preceding years. The number
of companies in partial ownership decreased by one, to 38, most of these with a state
ownership share of below 1% of issued capital14
. The total value of state ownership in
enterprises was unchanged, at about 10% of GDP. There are currently no plans for further
privatisations.
Functioning of the financial market
Financial stability
Bank capitalisation and profitability have improved since the pandemic. The banking
sector remained resilient throughout the recent crises. Banks’ capital adequacy ratio increased
further in 2022, and in December 2022, it was well above its level of 5 years earlier, far
exceeding the regulatory minimum. Liquid assets accounted for over a third of total assets at
end-2022 and covered more than half of short-term liabilities. At 12.2%, return on equity was
above its pre-pandemic level at end-2019 (11.7%). The proportion of loans to the non-
financial sector which were non-performing has been steadily decreasing since the end of
2013, to a record low of 2.8% at the end of 2022 (-0.2 pps year on year). However, financial
diversification is progressing slowly, with banks still accounting for some 79.1% of financial
sector assets at end-2021, only slightly lower than the end-2016 figure (84.7%). The share of
foreign equity in total bank equity has been consistently high in the past 5 years, at about
14 The figures are based on information from the government. A new harmonised and internationally
standardised global database of state-owned enterprises (SOEs) by the World Bank indicates that there are
88 SOEs, of which 35 are 100% owned by the government of North Macedonia.
62
75%.
The legal and institutional framework for ensuring financial stability has been
strengthened. In July 2022, the new Financial Stability Law was enacted, giving the relevant
authorities in the financial sector a legal mandate to develop and implement macroprudential
measures to maintain the stability of the financial system. The Law sets up the Financial
Stability Council, which held its first meeting in November 2022 and submitted the first
annual financial stability report to Parliament at end-March 2023. In February 2023, the
Council of the National Bank adopted a new decision on the credit risk management
methodology, so as to strengthen the management of non-performing and restructured loans,
due to enter into force on 1 January 2024. In August 2023, the National Bank’s decision to
increase the countercyclical capital buffer to 0.5%, adopted in July 2022, entered into force.
The National Bank has already scheduled increases in the countercyclical buffers to 0.75 by
2024Q2 and to 1% by 2024Q4. However, critical legislation including the Bank Resolution
Law and the Deposit Insurance Law is not yet enacted by Parliament.
Access to finance
Growth in credit to the private sector decelerated, while deposit growth remained
robust. Annual growth in loans to households and non-financial companies has also been
decelerating since autumn 2022, with corporate loans particularly affected. Lending to
nonfinancial corporations slowed down mainly on account of repayments of working capital
loans linked to the surge in energy costs. Even so, over 2022 as a whole, private-sector credit
growth accelerated by 3.8 pps to 9.6% year on year, before slowing in the first quarter of
2023 to 8.3%, and further to 6.4% in the second quarter. Foreign exchange loans are
contributing most to the annual increases. The proportion of loans that were foreign-
denominated rose by 0.8 pp year on year to 43.2% in the first quarter of 2023. The increase
was more pronounced in the corporate sector, partly because corporations needed extra
liquidity to cover their energy purchases. Overall, however, the currency denomination of
domestic credit shifted further towards denar-denominated loans in the latter part of the year.
While household demand for foreign currency deposits strengthened throughout the
pandemic and energy crises, deposits in national currency have rebounded since early 2023,
supported by the central bank’s strategy of applying different reserve requirements for bank
deposits in foreign and local currency. The share of foreign currency-denominated in total
bank deposits amounted to 46.7% at the end of the first quarter 2023 (-0.7 pp year on year).
Functioning of the labour market
The labour market’s resilience masks persistent structural problems. While fiscal
support to employers was gradually withdrawn in the second half of 2022, the labour market
continued to prove resilient. The
employment rate has steadily increased
over the last decade. The COVID-19
pandemic interrupted this trend, but in the
first quarter of 2023 the employment rate
stood above the pre-pandemic level, at
56.5%. For 2022 as a whole, the average
unemployment rate (15-64 age group) was
14.5%, compared with 15.6% in 2021. The
labour force decreased by 1.3% year on
year, with the bulk of the drop accounted
for by women (-2%, compared with 0.8% for men). The labour market participation rate
dropped to 66.4% in 2022 (-0.4 pps year on year). Young people in particular continue to
63
face obstacles to entering the labour market. In 2022, the government adopted a new
implementation plan to strengthen the Youth Guarantee which has been in place since 2018
and which has contributed to a significant reduction in youth unemployment from 45.4% in
2018 to a still high 32.5% in 2022. The rate of inactivity in the labour market is particularly
high for women and, after steadily narrowing between 2014 and 2019, the gender gap
widened for the third year in a row in 2022 (by 0.8 pps to 24.1 pps.), as the participation rate
for men remained stable (at 78.4%), while it dropped for women (to 54.3%). Long-term
unemployment stands at around 80% of total unemployed, largely reflecting an entrenched
skills mismatch. Spending on active labour market policies (0.3% of GDP in 2022) is
relatively high in regional comparison, but lower than the EU average (0.6% of GDP). Given
limited human and financial resources in employment agencies, the government faces the
challenge of better targeting the vulnerable unemployed, with a view to their participation in
the labour market. Average gross nominal wages rose by 11.1% in 2022, with the annual
increase accelerating to 14.3% on average in the first half of 2023. Real wage growth turned
positive as of April 2023 after raising the minimum wage according to the indexation
mechanism that takes into account inflation and changes in average wages. The average tax
wedge is regressive at the bottom of the income distribution: the average contribution rate
therefore takes a much higher share of low-wage earners’ total income.
2.3.2. The capacity to cope with competitive pressure and market forces within the
Union
North Macedonia has made some progress and is moderately prepared to cope with
competitive pressure and market forces within the EU. Integration with the EU in trade and
investment remained at a high level in 2022. The share of high-value products in exports
increased further and trade openness surged to a record high. There was further progress
towards improving vocational educational training (VET), but major skills shortages persist
relative to labour market needs, entailing long school-to-work transitions. These, coupled
with large gaps in transport and energy infrastructure and low investment and innovation
funding, are restricting potential growth. Digitalisation of the economy is advancing, but the
competitiveness of domestic businesses could be improved through a wider offering of public
e-services.
As the 2022 recommendations have not been fully implemented and remain mostly valid,
North Macedonia should in particular:
→ adopt the new Law on VET, the Law on secondary education and the Law on adult
education, and increase financial and human resources to speed up reforms of the VET
system;
→ finish unbundling gas transmission systems, increase investment in new energy sources
and enhance administrative capacity in the Energy Department of the Ministry of
Economy and the Energy Agency;
→ adopt secondary legislation under the Energy Efficiency Law and operationalise the
energy efficiency fund; adopt the Law on biofuels and the energy efficiency renovation
strategy for buildings; and establish a renewable energy guarantee of origin scheme.
Education and innovation
Progress in reforming education curricula and reducing skills mismatches is hampered
by lack of funding and capacity. While North Macedonia has progressed well in terms of
the number of people with higher education qualifications, curricula are not well suited to
equipping graduates with skills to match labour demand. State financial support for education
64
is insufficient and coordination between the education sector and businesses is weak. In 2022,
public spending on education and training amounted to 3.7% of GDP, about the average of
the preceding 5 years. This is below both the EU-level (5%) and peer-country averages, and
impedes implementation of the 2018-2025 education strategy. Moreover, spending is
inefficient, mainly on account of outdated formulas for the redistribution of public education
funds by the municipalities. There was substantial improvement in the 2018 PISA ranking15
,
compared to 2015, but the country still ranks in the lowest quartile. VET curricula have been
under review since 2019 to align them with labour market needs. However, the government
has not yet adopted a new VET Law with a focus on inclusion, labour market needs and a
new methodology of financing VET. The envisaged annual report on the implementation of
the education strategy, which should include recommendations for a new formula for higher
education funding, has not yet been published. The percentage of adults participating in
learning was 2.6% in 2020, which is significantly below the EU-27 average of 10.8% (2021).
Further development of qualifications is key to bringing medium-skilled and low-skilled
people into the labour market.
Innovation activity remains overall low. At 0.4% of GDP (including a small share from the
private sector), the economy’s expenditure on research and innovation remains significantly
below the EU average. Participation of the private sector in overall research spending remains
particularly weak, at 0.1% of GDP. Allocations to the Fund for Innovation and Technological
Development and its programmes have increased, but their effectiveness, design and
methodology could benefit from an independent evaluation. Links between businesses and
others involved in innovation are very weak. To overcome the lack of strategic direction
towards innovation, a smart specialisation strategy has yet to be adopted and implementation
measures to be developed.
Physical capital and quality of infrastructure
Investment spending remains moderate despite a major need to increase physical
capital. Gross capital formation (including inventories) rose to 35% of GDP in 2022
(+1.8 pps year on year), exceeding its pre-COVID level (2019: 34.5%). Investment in fixed
assets (gross fixed capital formation) increased steadily in the 5 years to 2021 (latest data),
when it reached 22.5%. This is above the average of 21.9% in the preceding 5 years, and
close to the EU-27 average of 22.8% (2022). Investment in construction as a percentage of
total investment in 2021 (55.2%) was down on its 5-year average (58.2%), while investment
in machinery and equipment rose to 35.3% of total investment, above the average (32.8%).
The share of private-sector investment in total investment remained steady in the 5 years up
to 2021, at around 75%. In the face of the current energy crisis and protracted works on a
number of major road and rail projects, the need to modernise the country’s capital stock, in
particular the transport and energy networks, appears ever more pressing.
Regional transport connectivity is progressing slowly. Road transport continues to
dominate the transport sector. There is limited investment in other means of transportation
and no consistent and intelligent system for managing and controlling traffic. Relatively low-
quality transport infrastructure, as well as weak trade and transport logistics continue to
present barriers for businesses. The joint electronic toll collection system between Serbia and
North Macedonia has become operational, facilitating trade and travel between the two
countries. There has been some progress on upgrading major road sections to highway level.
Work has started on Railway Corridor VIII, which aims to link North Macedonia with
Albania and Bulgaria and will give the country’s companies an alternative export option via
15
PISA is the OECD's Programme for International Student Assessment.
65
Albanian and Bulgarian ports.
The digitalisation of the economy continues to advance, but is still at a low level
compared with the EU. The percentage of households with internet access at home
increased by 10.1 pps. between 2017 and 2021, to 83.6%. A fixed broadband connection to
the internet is used by 88% of household users, and by 92% of businesses with 10 or more
employees, but smaller companies still face obstacles. Of the total number of enterprises,
54.5% had a website/homepage. Overall, there is a particular need to increase access to
broadband, expand e-government services and develop digital skills.
The government is taking steps to incentive investment in energy efficiency
improvements in the public sector. The economy is characterised by high-energy intensity
with low efficiency in energy production and consumption. North Macedonia is a contracting
party to the Energy Community Treaty and its government has committed to reducing the use
of energy, which requires substantial investment. Further improving energy efficiency,
including in residential and public buildings, is also important to lower the economy’s
dependence on energy imports and to enable a reduction in fiscal subsidies for energy. Yet,
implementation of the 2020 Law on Energy Efficiency and the adoption of by-laws is lagging
behind. In order to support energy efficiency investments in the public sector, which has the
greatest potential to improve energy efficiency, the government is establishing an Energy
Efficiency Fund (EEF). At the end of 2022, the government decided to establish the EEF
within the Development Bank. The legal and regulatory framework for its establishment and
operationalisation requires amendments to the Law on the Development Bank, which have
been adopted by the Parliament in October 2023. Rules of procedure of the Fund and a
project pipeline remain to be established.
The legal framework for investment in renewable energy sources was improved.
Electricity generation is highly dependent on coal, and, with domestic coal reserves
declining, on imports. The proportion of energy from renewable sources remains
comparatively low, at 17.3% in 2021. The government plans to increase renewable energy to
35-45% of energy consumption by 2040, to reduce the country’s high reliance on imported
liquid fuel and natural gas. In November 2022, Parliament enacted amendments to the 2018
Energy Law incentivising investment in renewable energy sources, notably solar power. At
the same time, the central bank began implementing a measure to encourage lending to the
corporate sector to finance domestic electricity production projects from renewable sources.
The distribution of natural gas remains limited. Meanwhile, the distribution of natural gas
is advancing, as an intermediate step in the decarbonisation process, with efforts made to
enhance the transmission and distribution network. The natural gas market was liberalised in
2015. The number of connected users remains limited; in 2022, it increased by 10% year on
year, to 550. Similarly limited are the length of the transmissions network (+5% year on year
to 210 km) and the total distributed quantities. Gas accounts for some 11% of electricity
production. There was little progress in the unbundling of the gas transmission system
operator, now planned for end-2023. The work to connect to regional gas pipelines is making
slow headway. Works on the gas interconnection with Greece have not yet started. This
project would support diversification of natural gas sources and facilitate access to transit
pipelines.
Sectoral and enterprise structure
The diversification of the economy continued after the pandemic. The economy’s output
is strongly reliant on the manufacturing sector. Services and trade have only gradually
increased their share in value added in recent years. Together, they accounted for some 66%
66
of total value added in 2022, about the same as a year earlier, and up from 60.4% in 2016.
The share of manufacturing decreased slightly for the second year in a row, to 14.6% of value
added in 2022, having progressively gained ground in the pre-pandemic years. The share of
construction increased somewhat, in annual comparison, in 2022, to 6.2%, reflecting a
recovery of investment after the pandemic, yet remaining below its average of 7% in 2017-
2021. After steadily dropping over a number of years, the share of agriculture remained at 9%
of value added, as in 2021.
Trade and services increasingly dominate the employment structure. In employment,
too, trade and services assume an increasingly important role, accounting for close to 60% of
total employment in 2022, compared with 58.4% in 2021. The manufacturing sector’s share
in total employment also rose in 2022, compared to the preceding year (+0.4 pps to 19.6 %),
possibly reflecting in part the post-pandemic end of short working hour regimes and a pick-
up in production. The construction sector accounted for 6.5 % of all employment, as in 2021,
and the share of agriculture dropped by 1.8 pps year on year, to 10%.
Economic integration with the EU and price competitiveness
Trade openness increased steeply as both exports and imports surged. The economy
posted a large increase in trade openness (exports and imports in goods and services as a
percentage of GDP) in 2022, to a record high of 171% (2021: 148.5%, 2015-19 average:
120%), which is by far the highest level in the Western Balkans. Trade values increased by
more than nominal GDP in 2022, largely reflecting the steep rise in energy imports, but also a
large increase in export values. The share of higher-value added products in the export
structure rose further in 2022, including chemicals (32% of total exports) and machinery and
transport equipment (31%), at the expense of traditional exports such as iron and textiles
(below 20%). In 2022, the EU was the country’s most significant trading partner, accounting
for 59.6% of total trade (78.3% of total exports compared with 77.3% in 2021 and 46.8% of
total imports compared with 46.2% in 2021). As the second most important trading partner
region, the Central European Free Trade Agreement accounted for 10% of total trade, with
the share of exports slightly higher and the share of imports lower than in the preceding year
(12.1% of total exports and 8.6% of total imports). EU countries also remain the biggest
investors in North Macedonia, accounting for some 50% of total FDI inflows in 2022 (2021:
56%), but the EU-27 share in the total stock of direct investment has declined to 64% at end-
2021, compared to 66% in 2015.
External competitiveness slightly deteriorated. In 2022, the real effective exchange rate
(REER) of the local currency appreciated by 2.1%, on an annual basis, due to an increase in
the nominal effective exchange rate in relation to the currencies of some of the trading
partner countries, with relative prices remaining stable. The rise in real wages coupled with
stagnant or declining productivity erodes price competitiveness. Nominal unit labour cost
rose by some 7% in 2022, reflecting the stark increase in nominal wages, while productivity
0
20
40
60
80
100
2015 2016 2017 2018 2019 2020 2021 2022
Graph 3.5a: North Macedonia - Exports of goods
EU CEFTA Other
Source: WiiW
% of GDP
0
20
40
60
80
100
2015 2016 2017 2018 2019 2020 2021 2022
Graph 3.5b: North Macedonia - Imports of goods
EU CEFTA Other
Source: WiiW
% of GDP
67
growth remained muted. Over the last 5 years, the REER of the denar deflated by inflation
has seen little change in either direction (on average a small appreciation of 1%). Concerns
over external competitiveness have increased as wage growth has accelerated, fuelled by the
12% hike in minimum wages starting from April 202316
.
2.4. PUBLIC PROCUREMENT, STATISTICS, FINANCIAL CONTROL
Chapter 5: Public procurement
EU rules ensure that the public procurement of goods, services and works in any Member
State is transparent and open to all EU companies on the basis of non-discrimination and
equal treatment.
North Macedonia is moderately prepared in the area of public procurement. Limited
progress was made in the reporting period. The capacity of key institutions, contracting
authorities and economic operators should be increased through continuous training. National
authorities should introduce more effective anti-corruption measures across the procurement
cycle. The direct award of the contract for the construction of Corridor VIII and X-d raises
concerns as it exempts the project from applying the law on public procurement.
The recommendations from last year’s report were not fully implemented and therefore
remain valid. In the coming year, the country should in particular:
→ adopt the public-private partnership law and the law on concessions, to further align the
legal framework in these areas with the EU acquis;
→ improve coordination among key stakeholders and strengthen their capacity to implement
the principles of transparency, free competition, equal treatment and non-discrimination;
→ further increase the use of 'most economically-advantageous tender' (MEAT) criteria for
the award of contracts, and improve the monitoring of public procurement procedures
through reporting and efficient follow-up of irregularities, conflict of interest cases and
fraudulent practices.
Institutional set-up and legal alignment
The legal framework on public procurement is broadly aligned with the EU acquis. The
practice of ‘blacklisting’ companies due to professional misconduct during the procurement
phase continued, although this is not in line with EU rules. In 2022, 55 negative references
were issued against 50 economic operators, of which 21 expired and nine were removed by
the Public Procurement Bureau. By the end of 2022, 25 negative references issued in 2022
were active, as well as six negative references issued in 2018 and 2019.
The finalisation and adoption of the Law on PPP and the Law on concessions are still
pending.
In March 2023, the government approved a contract for the construction of highway sections
along Corridor VIII and X-d. The contract was directly awarded to an international
consortium without a competitive procedure as the ad hoc Law on determining the public
16
Public sector wages were increased by 10 percent in September 2023, in addition to the linear increase as a
result of the minimum wage increase in March 2023, as well as several seperate decisions granting larger wage
increases implemented in 2023. Higher average nominal wages accelerate the increase in pensions under the
new indexation formula, thus creating additional demand pressures.
68
interest and the Law on nominating a strategic partner for the implementation of the project
for the construction of infrastructure Corridor VIII and X-d adopted by the Parliament in
2021 exempts the project from the application of the law on public procurement. In May
2023, the Government submitted for adoption to the Parliament legal amendments that are
necessary for the implementation of the project. These laws were labelled with the EU flag to
fast-track the procedure although this was not an appropriate use of the procedure.
The 2022-2026 public procurement strategy is under way. According to the first monitoring
report of 2022, 68% of the activities have been fully implemented, 8% are ongoing and 24%
were moved forward to 2023. The Public Procurement Bureau (PPB) continued to modernise
and improve the country’s public procurement system and to enhance the system's
performance and functionalities. However, the PPB's capacity, monitoring and control
competencies need to be strengthened.
The Public Procurement Bureau and Ministry of Economy continued activities to accede to
the WTO Agreement on Government Procurement (GPA). On 7 June 2023, the Committee
on Government Procurement decided on the accession of North Macedonia to the GPA.
In 2022, a Memorandum of Understanding to exchange information and standardise
procedures was signed between the Public Procurement Bureau, the State Appeals
Commission, the Commission for the Protection of Competition, the State Audit Office and
the State Commission for Preventing Corruption. This should result in a more effective
exchange of data and information with the objective of enhancing consistency and integrity in
implementing the legal framework.
The capacity of the Ministry of Economy, the Ministry that deals with concessions and PPPs,
remains limited. In 2022, only one new agreement establishing a PPP was concluded. The
PPP register and the register on concessions still need to be set up.
The electronic system for public procurement is working efficiently. Despite the development
of an e-marketplace platform and e-catalogues, procuring entities demonstrated little interest
in using this system. In 2022, 70 small value procurements were concluded using e-market.
Contracting authorities' annual procurement plans are regularly published on the electronic
system for public procurement. The electronic archive module ensures the integrity of
electronic procedures by keeping the documentation in original electronic form, while the e-
complaints module provides for an electronic exchange of data with the appeals procedures.
Implementation and enforcement capacity
In 2022, the public procurement market amounted to 8.6% of the country’s GDP as
compared to 11% in 2021. It represented25% of the state budget. The capacity of both central
and local contracting authorities needs to be strengthened.
On the award criteria used in public procurement procedures, the use of 'most economically-
advantageous tender' (MEAT) is still limited. In 2022, only 1 383 procurement notices out of
22 901 applied MEAT criteria (6.03%). There is a need for organisation of continuous
training of contracting authorities on how to apply this criterion.
Contract award and implementation monitoring shows that the use of negotiated
procurement procedures (number of procedures) fell to 6.6% in 2022, from 8% in 2021. An
assessment of the use of centralised procurement and framework agreements by the Public
Procurement Bureau is under way. The proportion of the overall value of public procurement
awarded to SMEs increased to 57% in 2022 compared to 53% in 2021. Tender cancellation
(number of procedures) increased to 31% compared to 28.8% in 2021. In 2022 the average
69
number of bids accounted for three bids per tender procedure and approximately one third of
contracts were awarded in tender procedures with a single bid.
Capacity to manage public procurement processes needs to be further enhanced,
especially by local authorities, to ensure a more coherent approach in managing the
procurement cycle. The quality of tender documentation remains a challenge for smaller
contracting authorities.
The regulatory and institutional mechanisms on integrity and conflict of interest are still
insufficient. There is no risk assessment system embedded in the procurement cycle to ensure
timely information on possible corrupt practices or to flag irregularities.
Efficient remedy system
The legislation on the right to legal remedy is broadly aligned with the EU acquis. The
implementation capacity of the State Appeals Commission is insufficient for handling the
number of appeals (967 in 2022, 1 109 in 2021). Additional qualified staff are needed to
ensure timely processing of the appeals. In the reporting period, 83 complaints were filed
against the decisions of the State Appeals Commission before the Administrative Court.
On the prevention of corruption, the public procurement strategy includes measures to fight
against corruption and conflict of interest. However, the follow-up of red flag reports
published on the PPB’s website is insufficient. The country should improve institutional
coordination with the State Commission for Prevention of Corruption and law enforcement
institutions to follow up on the findings of red flag reports.
Chapter 18: Statistics
EU rules require Member States produce statistics based on the principles of professional
independence, impartiality, reliability, transparency, and confidentiality. Common rules are
in place for the methodology, production and dissemination of statistical information.
The country is moderately prepared in the area of statistics. Good progress was made, in
particular with finalising the publication of the population census data in December 2022.
Improvements are noted in most statistical areas and in aligning sectoral statistics with EU
standards, including better use of administrative sources. Continued efforts are needed to
improve the scope and data quality underpinning macroeconomic and social statistics.
In the coming year, the country should, in particular:
→ carry out the agriculture census by June 2024;
→ urgently ensure adequate staffing and sufficient financial resources for the State
Statistical Office;
→ continue to improve macroeconomic statistics, notably by enhancing consistency,
timeliness and coverage of excessive deficit procedure and government finance statistics
and by further aligning financial accounts and quarterly national accounts with the
European System of Accounts 2010 (ESA 2010).
The statistical infrastructure has reached a high level of alignment with the EU acquis and
international standards. In February 2023, the government adopted a new programme for
statistical surveys for 2023-2027. Another main statistical producer - the central bank,
remains fully committed to the European Statistics Code of Practice. The Ministry of Finance
has yet to appoint a head of statistics. On quality management, in 2023 the State Statistical
Office (SSO) introduced an internal quality audit to monitor the quality of products and
processes. Human resources in the SSO have increased only slightly. However, the SSO's
70
annual budget for regular operations increased by 9.4% in nominal terms in 2023 compared
to 2022, reversing the previous negative trend.
On classifications and registers, the main classifications comply with the EU acquis and are
updated regularly. Progress was made in the use of administrative data for the development
of an employment register. In June 2022, the SSO started to test the logical design of the new
national statistical business register. Overall data submission to Eurostat has further
increased.
The country made some progress on macroeconomic statistics. The SSO made very limited
progress regarding the excessive deficit procedure (EDP) tables. The SSO transmitted EDP
notification tables for North Macedonia to Eurostat in October 2022 and in April 2023. The
latest submission included 2022 data (i.e. for the first time data for t-1). Significant further
efforts are needed to improve the quality, consistency, coverage and timeliness of EDP tables
and government finance statistics provided through ESA 2010 transmission programme.
Moreover, to comply with ESA 2010 rules on sector classification, it is needed to reclassify
without further delay inside the government sector a large public company with a substantial
impact on government deficit and debt . For the quarterly accounts, tables on GDP by income
approach were compiled and sent to ESTAT for publication in August 2023 . However,
further efforts are needed to ensure the completeness and quality of data submitted on
quarterly national accounts.
Trade by invoicing currency (TIC) statistics for 2022 were submitted to Eurostat in March
2023 in line with the latest European Business Statistics Regulation requirements. In October
2022, the SSO began compiling quality reports in Eurostat's European Statistical System
metadata handling tool. It also compiled quality reports on detailed data for 2020 and on TEC
data (trade by enterprise characteristics - TEC) for 2019. 2020 TEC data are fully harmonised
with the Methodological Manual for TEC statistics. In January 2023, these data were
transmitted to Eurostat in SDMX format.
The central bank continued to transmit annual financial accounts stock data to Eurostat (data
series 2013-2021, non-consolidated balance sheets only) and to prepare experimental
quarterly financial accounts data (stocks and flows), and annual flows data by sub-sector and
financial instrument. It produced and disseminated external sector data in line with the latest
6th
BoP Manual (BPM6).
On business statistics, good progress was made. Regarding inward foreign affiliates
statistics, data for 2020 were published in December 2022. In June 2023, the SSO carried out
a third pilot survey on international trade in services statistics by geographical breakdown.
Work on tourism satellite accounts (TSA) was completed. In September 2022, the first TSA
data for 2019 was published and submitted to Eurostat. Based on the European business
statistics requirement, the structural business statistics (SBS) compilation methodology
improved, extending the coverage of activities, and refining the calculation of the variables
and the technical format for the data transmission. An algorithm for calculating the basic
variables for firms providing financial services was created and in October 2022, preliminary
data for 2021 was sent to Eurostat. In March 2023, the final business data for 2021 were
published. Work is under way to set up a 'complex enterprises' statistical unit. Regarding
business demography, in June 2022 the SSO provided Eurostat with the complete set of data
for 2020 as required by the Regulation.
Good progress was made on social statistics. The SSO published the 2021 population census
data. Based on this census data, in June 2023 the SSO produced new time series of the
population data at national level. Submission of the results of the survey on income and living
71
conditions has been delayed due to shortage of staff. The SSO started using administrative
registers for education statistics. Crime statistics data for 2018-2021 were submitted to
Eurostat in August 2023 . In summer 2022, the SSO conducted a gender-based violence
survey. The results were submitted to Eurostat but metadata are missing and the data are not
disseminated. Labour force survey micro data and the 2020 labour cost survey data were not
submitted to Eurostat during the reporting period.
Good progress is noted for agricultural statistics. In June 2022, the SSO carried out the pilot
agricultural census. Preparations for the main agricultural census in 2024 need to be stepped
up, including the legislative and budgetary framework. Data for fishery statistics were aligned
to EU standards, published by the SSO and submitted to Eurostat in December 2022. For
forestry statistics, the SSO assessed the data sources for the compilation of forestry accounts.
On energy and environmental statistics, in May 2023 monetary environmental accounts
were compiled for the main tax categories as well as for expenditure on environmental
protection. The scope of the environmental goods and services sector accounts was
broadened. Moreover, physical energy flow accounts (PEFA) were compiled for each
reference year between 2018 and 2020 using the 'PEFA builder'. Material flow accounts data
were also regularly reported to Eurostat, although material flow balances are not yet included.
The inclusiveness of energy balances data increased thanks to the inclusion of solar heat
energy. Data collection for energy statistics improved thanks to the re-design and reduction of
number of statistical surveys for data collection.
Chapter 32: Financial control
The EU promotes the reform of national governance systems to improve managerial
accountability, sound financial management of income and expenditure, and external audit of
public funds. The financial control rules further protect the EU’s financial interests against
fraud in the management of EU funds and the euro against counterfeiting.
The country is moderately prepared in the area of financial control. Some progress
included the setting up of the Anti-Fraud Coordination Service Network, the adoption of the
Organic budget Law and the Law on inspection, and the signature of a Memorandum of
Understanding between the Parliament and the State Audit Office to strengthen follow-up on
individual audit reports. On internal control and managerial accountability, the adoption of
the public internal financial control (PIFC) Law has been delayed for more than two years.
The efficiency of financial inspection needs to be strengthened. The independence of the
State Audit Office is not yet guaranteed by the Constitution. The efficiency of parliamentary
oversight of public funds and follow-up to audit recommendations needs to improve.
As last year’s recommendations were only partially addressed, they remain valid. In the
coming year, the country should in particular:
→ adopt the new PIFC Law and related methodological tools and start to implement them to
improve transparency, managerial accountability and sound management of public funds;
→ adopt the draft state audit Law to strengthen the State Audit Office’s (SAO's)
independence, boost cooperation between the SAO and the Parliament, improve
parliamentary scrutiny of individual audit reports and the follow-up of recommendations
provided by SAO;
→ ensure the efficient functioning of the Anti-Fraud Coordination Service Network
(AFCOS) and improve the prevention, management and reporting of irregularities that
affect EU funds.
72
Public internal financial control
PIFC initiatives are included under pillar VI of the 2022-2025 public finance reform
programme. The implementation of the PIFC policy paper is included in the public financial
management reform programme's annual monitoring report for 2022. The Organic Budget
Law was adopted in September 2022 after a long delay but PIFC reforms continued to be
undermined due to delays in adoption of the PIFC law and limited capacity of key
institutions.
The legal framework for internal control is broadly harmonised with international standards.
Its implementation needs to be further strengthened. Despite ongoing work to provide further
guidance, the efficient implementation of managerial accountability remains a challenge for
budget users at central and local levels. Coherent and consistent application of the manual on
managerial accountability is yet to be ensured.
A new financial inspection Law was adopted by Parliament in January 2023 but financial
inspections are not yet working efficiently. This will require strengthening capacity, further
developing methodological tools and ensuring their implementation.
Fragmentation and inadequate staffing of the internal audit function undermine its
organisational capacity and quality assurance. A national certification system for internal
auditors still needs to be introduced.
The Central Harmonisation Unit (CHU) continued to coordinate financial management and
control and internal audit in the public sector, and to provide methodological guidance. A
new unit for quality check on the financial management and control and internal audit
operations was established. However, the capacity of CHU remains insufficient. CHU
currently has eight staff for monitoring and reporting on the functioning of the overall
internal control system, which encompasses more than 1 300 public entities.
External audit
The current state audit Law is broadly harmonised with international standards. The new
state audit Law aimed at strengthening the public sector's external audit function and
increasing the SAO’s financial and operational independence - not yet guaranteed under the
Constitution, should be adopted. The SAO carries out a compliance audit on the final
government accounts of the core budget by June each year. In 2022, the audit covered 82% of
expenditure, which is an increase of 2% from last year. This included expenditure covered by
the regularity audit for an amount of EUR 3 182 million EUR (i.e. 77%), expenditure covered
by the performance audit for an amount of EUR 188 million (i.e. 4%), and expenditure
covered by the compliance audit for an amount of EUR 39 (i.e. 1%).
The 2021 annual report on the audits carried out was adopted by the Parliament in March
2023 and published on the SAO’s website. Its quality was deemed sufficient. In 2022, the
SAO carried out the full audit work programme consisting of 188 audits, including 171
regularity (financial and compliance) audits, 10 performance audits, two IT audits and five
compliance audits. Reports were sent to Parliament for deliberation and published on the
SAO’s website. The quality of the audit reports is acknowledged by local and international
stakeholders.
Regarding its institutional capacity, a new 2023-2027 SAO development strategy and
related action plan were adopted in September 2022. The strategy closely aligns with the
priorities and measures set out in 2022-2025 public financial management reform
programme. The SAO continues to work on the 2020-2023 human resources management
strategy. The new SAO systematisation act, approved in December 2022, provides for 245
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job posts, of which 114 or 46% are filled (104 audit staff, seven administrative support staff
and three technical staff).. In 2022, SAO staff increased by one person. The SAO’s 2023
budget was approved, and it has continued to implement the annual plan for the professional
development and training of state auditors, to raise awareness of its activities among citizens
and the media, and to implement the 2020-2023 communication strategy.
On the impact of audits, in 2022 some actions were taken in response to 80% of the audit
recommendations. Cooperation between the SAO and the Parliament continued to improve
and a Memorandum of Understanding between the two was signed in October 2022.
Nevertheless, parliamentary scrutiny over budget preparation and implementation needs to be
further enhanced. Transparency and accountability in the management of public funds needs
to be strengthened. This will require efficient monitoring mechanisms by the executive and
the Parliament and the effective implementation of audit recommendations.
To combat corruption, PIFC institutions and the SAO should strengthen cooperation with
anti-corruption/law enforcement institutions. Moreover, monitoring systems should be
strengthened and mechanisms to monitor the number of cases investigated, prosecuted and
subject to court resolutions as a result of internal audits or inspections should be developed.
Protection of the EU’s financial interests
Some progress was made in 2022 on the protection of EU’s financial interests. The legal
basis to formally establish the framework for the protection of EU’s financial interests
(AFCOS) was adopted in December 2022 and AFCOS' staff has been extended to five
employees. National legislation is broadly aligned with the EU Directive on fighting fraud
affecting EU’s financial interests by means of criminal law. Amendments to the Criminal
Code to further align it with the EU acquis were adopted by the Parliament in February 2023.
The national 2022-2025 anti-fraud strategy and related action plan were adopted by the
government in June 2022. The national authorities reported 85 cases of irregularities through
the irregularity management system in 2022, of which one case was reported as suspected
fraud. This is a further consolidation of the reporting trend of the last four years, which has
seen a considerable improvement in comparison with previous years. The national authorities
should continue their good cooperation with the European Commission on investigations.
Protecting the euro against counterfeiting
On alignment with the EU acquis, national legislation is to some extent aligned with EU
regulations setting out the system for fighting euro counterfeiting. Progress in the reporting
period has been limited. The National Bank continued to improve its capacity by organising
online trainings courses and by involving experts from all key institutions in capacity
building.
The capacity of the Ministry of the Interior to prevent, detect and investigate criminal
offences related to counterfeiting money, remain limited. An electronic system for exchange,
processing, analysis and reporting of cases still needs to be set up.
3. GOOD NEIGHBOURLY RELATIONS AND REGIONAL COOPERATION
Good neighbourly relations and regional cooperation form an essential part of North
Macedonia’s European integration process. They contribute to stability, reconciliation and a
climate conducive to addressing constructively open bilateral issues and the legacies of the
past.
North Macedonia maintained its engagement in a number of regional initiatives such as the
Central European Free Trade Agreement, the Energy Community, the Transport Community,
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the South-East European Cooperation Process and the Regional Cooperation Council. North
Macedonia also actively participated in initiatives such as the Central European Initiative and
the Centre for Security Cooperation.
The EU-Western Balkans Summit in December 2022 took place for the first time in the
region, in Tirana. The summit focused on the support to the region in the fields of energy and
migration, and on youth cooperation, roaming, green lanes and overall progress on
implementing the Economic and Investment Plan.
On the Common Regional Market, a political breakthrough was achieved at the Berlin
Process Summit in Berlin in November 2022, where leaders adopted three mobility
agreements respectively on higher education qualifications, on professional qualifications and
on free movement with identity cards. North Macedonia has ratified all three mobility
agreements and has deposited the related notification instruments. A number of important
decisions agreed at the technical level within CEFTA remain blocked.
Overall, the country’s cooperation and bilateral relations with other enlargement countries
and neighbouring EU Member States continued to evolve positively.
Bilateral relations with Albania remained good. In November 2022, the governments of
North Macedonia and Albania held a second joint session in Skopje, during which the two
countries signed 21 bilateral agreements and memorandums of understanding for joint
cooperation in a number of areas, including security, defence, infrastructure, energy,
education, science and culture. Both governments agreed on three initiatives on Corridor VIII
infrastructure of, the construction of a dry port in Struga, and the opening of the new Struga-
Pogradec border crossing point. Albania and North Macedonia will also set up joint
investigation teams in the fight against organised crime. The countries also agreed to pursue
cooperation on defence, security, digitalisation, border control, improving child protection
and the use of Albanian sign language in both countries.
Relations between the North Macedonia and Bosnia and Herzegovina continue to be good.
The two Foreign Ministers met in the margins of the meeting of the Berlin Process and
Foreign Ministers of the six Western Balkan countries in London. At the beginning of 2023,
the Foreign Minister of Bosnia and Herzegovina paid an official visit to North Macedonia.
Several bilateral agreements are in place, including on cooperation on EU integration.
Bilateral cooperation with Kosovo continues to be intensive and constructive, with several
meetings held at the highest level. The President of Kosovo visited North Macedonia in
April 2023. The Parliament of Kosovo set up a Group for Friendship with North Macedonia.
The Speaker of the Parliament of Kosovo paid an official visit to North Macedonia in
December 2022. In March 2023, the two Prime Ministers met in the margins of the Delphi
Economic Forum.
Bilateral relations with Montenegro continued to be good. In February 2023, there were
comprehensive political consultations between the Foreign Ministries of both countries at
State Secretary level, focusing on bilateral, EU and NATO-related issues. In February 2023,
the President of North Macedonia met with the Prime Minister of Montenegro in the margins
of the World Economic Forum in Davos. The Foreign Minister held meetings with the
President and Prime Minister of Montenegro in the margins of the Adriatic Charter meeting
in March 2023. The two Prime Ministers met in the margins of the Delphi Economic Forum
in March 2023. The two countries signed a Programme of Cooperation on culture for 2023-
2026.
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Bilateral relations with Serbia are good. The two Prime Ministers met in the margins of the
Munich Security Conference and the Foreign Ministers met twice in the margins of other
international events. In January 2023, the Serbian Defence Minister paid an official visit to
North Macedonia, and the two Ministers of the Interior signed a Protocol on border controls
at the joint Lojane-Miratovac border crossing point. In March 2023, the Prime Minister of
North Macedonia visited Belgrade. During the visit, three memorandums of understanding
were signed on measures promoting the movement of persons and goods, cooperation in the
mining and energy sector, and a project to establish an interoperable electronic road tolling
system. In April 2023, a memorandum of understanding on cooperation in EU integration
was signed.
Relations with Türkiye are good. The two countries celebrated 30 years of diplomatic
relations. The Chairperson of the Turkish Grand National Assembly paid a visit to North
Macedonia in November 2022. In the wake of the devastating earthquake in the eastern part
of Türkiye in February 2023, the government dispatched humanitarian aid, and soldiers and
members of the Directorate for Rescue and Protection to provide aid. In February 2023, the
two countries signed a memorandum of cooperation on youth and sports.
Relations with Ukraine have intensified since the beginning of Russia’s aggression. North
Macedonia declared support for Ukraine as a priority for its OSCE Chairmanship in 2023.
North Macedonia supports the territorial integrity and sovereignty of Ukraine, condemning
Russia’s aggression against Ukraine. North Macedonia has provided humanitarian and
military assistance and is fully aligned with the EU’s package of restrictive measures against
Russia. North Macedonia and Ukraine have agreements on trade, the protection of
investments, culture, education, tourism, transport and military cooperation. A visa-free
regime has been in place for short stays since 2019.
Relations with Georgia are good. In his capacity as incoming OSCE Chairperson-in-office,
North Macedonia’s Minister of Foreign Affairs met with his Georgian counterpart December
2022. An agreement on culture is in place.
Relations with Moldova are good. North Macedonia, through its chairpersonship of OSCE
follows the Transnistrian settlement process. In his capacity as OSCE Chairperson-in-office,
North Macedonia’s Minister of Foreign Affairs of travelled to Chisinau to address some of
the challenges Moldova is facing, in particular the situation in Transnistria. Both countries
have agreements in place on transport, trade, customs, finance, medicine and health, police,
foreign affairs and consular matters. There is no visa-free regime between both countries.
During the reporting period, relations with Bulgaria focused on the next steps in North
Macedonia’s EU accession negotiations process and on the bilateral commitments under the
Treaty of Friendship, Good-Neighbourliness and Cooperation and its Protocol. North
Macedonia set up an inter-ministerial working group, chaired by the Minister of Foreign
Affairs, to coordinate implementation of measures provided for in Protocol. Thematic sub-
groups were also created on: hate speech; rehabilitation of victims of repression from the
communist period; implementation of recommendations adopted by the Multidisciplinary
Expert Commission on Historical and Educational Issues; and protection against
discrimination. The Multidisciplinary Expert Commission on Historical and Educational
Issues held several meetings during the reporting period. In October 2022, the President of
North Macedonia paid an official visit to Bulgaria, and a month later the Foreign Minister
went on an official visit to Sofia. In October 2022, the two Prime Ministers launched the
construction works on the eastern railway segment of Corridor VIII in North Macedonia at a
ceremony attended by several ministers from both countries. In December 2022, the two
Foreign Ministers opened a bilateral business forum in Skopje. At the forum, four agreements
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worth over EUR 3 million were signed by companies from both countries. Bilateral relations
were negatively affected by statements made by individual politicians and by several
incidents, in particular those relating to Bulgarian cultural clubs, to celebrations of historical
events and historical figures, football events and to the denial of entry of citizens, including
Members of the European Parliament. The relevant authorities in North Macedonia took
some steps to address these situations, and, where necessary, establish accountability,
including by launching investigations and bringing those responsible for criminal acts to
justice. Further efforts are needed to promote an atmosphere of dialogue and mutual respect.
Cooperation with Greece intensified, particularly in key areas of mutual interest. Progress
was made on implementation of the Prespa Agreement and further efforts should continue in
this regard. Several meetings were held at Prime Minister and Foreign Minister level. In
October 2022, the two Prime Ministers met in the margins of the European Political
Community in Prague. In November 2022, the permanent mixed border commission held its
10th
meeting. In December 2022, the Foreign Minister of North Macedonia paid an official
visit to Greece, followed by a visit by the Deputy Prime Minister in charge of EU Affairs in
January. The Greek Foreign Minister visited Struga in June 2023 to participate in the Prespa
Forum Dialogue. The two countries intensified energy cooperation on the construction of the
natural gas interconnector between North Macedonia and Greece.
4. ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP
CLUSTER 2: INTERNAL MARKET
The internal market cluster covers: free movement of goods (Chapter 1); freedom of
movement for workers (Chapter 2); right of establishment and freedom to provide services
(Chapter 3); free movement of capital (Chapter 4); company law (Chapter 6); intellectual
property law (Chapter 7); competition policy (Chapter 8); financial services (Chapter 9); and
consumer and health protection (Chapter 28).
North Macedonia is moderately prepared in most of the areas covered by Cluster 2 on
internal market, namely the free movement of goods, services and capital, intellectual
property, competition policy, financial services and consumer and health protection. The
country has achieved a good level of preparation on company law, although it is still at an
early stage on freedom of movement for workers. In the reporting period, North Macedonia
made good progress on free movement of capital and some progress on financial services and
on consumer and health protection. Limited progress was made on the free movement of
goods, rights of establishment to provide services. No progress was made on company law,
intellectual property law and competition policy and freedom of movement for workers.
Overall, more progress is needed in the coming year in the areas covered by this cluster as it
will feed into the preparations of North Macedonia to meet the requirements of the EU’s
internal market. Work on this cluster is highly relevant for the development of the Common
Regional Market.
Chapter 1: Free movement of goods
The free movement of goods ensures that many products can be traded freely across the EU
based on common rules and procedures. Where products are governed by national rules, the
principle of the free movement of goods prevents these creating unjustified barriers to trade.
North Macedonia is moderately prepared on the free movement of goods. Although
national legislation allows products to be traded freely, alignment with the latest EU acquis
needs to be intensified. Limited progress was made on last year’s recommendations by the
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adoption of two laws to align with the EU General Products Safety Directive. Most of last
year’s recommendations therefore remain valid.
In the coming year the country should, in particular:
→ adopt the Law on market surveillance and the implementing legislation necessary to
complete the alignment with the EU General Products Safety Directive, and start to
significantly increase the human resources that ensure market surveillance;
→ prepare and adopt a new action plan to eliminate non-tariff barriers to trade and ensure
compliance with Articles 34-36 of the Treaty on Functioning of the European Union
(TFEU);
→ finalise and adopt a strategy for the free movement of goods to ensure further alignment
of national legislation with the relevant EU acquis.
General principles
The country has set up the institutional framework for the production, distribution and
marketing of industrial products. A new Law on technical requirements and a Law on
general product safety designed to align with the relevant EU acquis were adopted, but the
relevant implementing legislation has not yet been adopted. A new Law on market
surveillance also needs to be adopted.
Non-harmonised area
The follow-up and implementation of compliance with Articles 34-36 TFEU is ensured by
the Ministry of Economy. The Ministry has completed a screening of the national legal
framework to identify areas not compliant with these articles. The drafting of an action plan
for the elimination of non-tariff barriers to trade and to ensure compliance with Articles 34-
36 TFEU is under way. This should be completed, adopted, and implemented.
Harmonised area: quality infrastructure
The necessary institutional and legal structure for technical regulations, standards, conformity
assessment, accreditation, metrology and market surveillance is in place. The National
Standardisation Institute is a full member of the European Committee for Standardisation
(CEN) and the European Committee for Electro-technical Standardisation (CENELEC), and
participates in the work of relevant EU standardisation bodies. It adopted 24 953 European
standards as national standards and adopted 84 national standards.
By June 2023, North Macedonia had 19 active conformity assessment bodies for calibration,
testing, medicinal laboratories, product and process certification and inspection. The Institute
for Accreditation of the Republic of North Macedonia is a member of the International
Accreditation Forum, of the European co-operation for Accreditation (with which it has
signed a Multilateral Agreement) and also party to the Mutual Recognition Agreement of
International Laboratory Accreditation Cooperation (ILAC). It ensures the accreditation
procedures for testing, calibration and medical laboratories, product certification bodies, and
inspection bodies. There is no national accreditation scheme for the certification of personnel
and for skills testing.
The Bureau of Metrology, the national metrology body, is an official member of the
European Association of National Metrology Institutes and the General Conference on
Weights and Measures. It has well equipped calibration laboratories for mass, temperature
and relative humidity, length and angle, pressure, volume and flow, time and frequency,
electrical quantities, acoustics and vibration and one laboratory for testing the quality of
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fuels. All accredited laboratories are signatories to the European Accreditation Multilateral
agreement.
The State Market Inspectorate (SMI) is the main market surveillance body, along with the
State Technical Inspectorate and the State Sanitary Inspectorate. There is also a coordination
body for market surveillance. In 2022, the SMI carried out 539 inspections under the general
product safety law (up from 428 in 2021) and 168 under the construction products law (up
from 20 in 2020). This led to 59 harmful products being taken off the market, in particular
textiles and toys. The Inspectorate has 257 employees, but an insufficient number of licenced
inspectors (151). There is no efficient software system for market surveillance document
management in place, including for the recording of inspection results or proper risk planning
and management.
Harmonised area: sectoral legislation
On ‘new and global approach’ product legislation, the level of alignment with the EU
acquis remains low. No progress was made on aligning with the relevant EU acquis during
the reporting period. Since January 2023, 10 Eurocodes with 58 standards and 57 national
annexes have become obligatory in the construction sector.
National legislation is not yet aligned to the latest EU ‘old approach’ product acquis on
motor vehicles, two or three wheeled vehicles, tractors (agricultural, forestry), or non-road
mobile machinery emissions. New laws on these products aligned with the relevant EU
acquis need to be adopted. No progress has been made on alignment with the EU acquis on
chemicals, including the Regulations on Registration, Evaluation, Authorisation and
Restriction of Chemicals (REACH), chemicals, classification, labelling and packaging of
substances and mixtures (CLP), good laboratory practices (GLP), and fertilisers and
detergents. Administrative capacity in the area of firearms also remains insufficient.
On procedural measures, notification procedures for standards and technical regulations
are ensured by the Ministry of Economy and the Standardisation Institute. National
legislation is partly aligned with the EU acquis on returning cultural goods unlawfully
removed from a Member State. On drug precursors, import or export of these products has
to be pre-approved, and is tracked by a national IT system, and legal entities are obliged to
report to the authorities any suspicion of abuse of manufacturing, marketing, unusual orders,
theft or any other illegal activity regarding narcotic drugs and psychotropic substances. On
civil explosives, economic operators need to be licenced by the authorities to buy, sell,
import and export, and use these products, and an electronic system is in place to track the
purchase, transfer, import, transit, and export of explosive for civil use.
The national strategy for the prevention of corruption pointed out that the inspectorates
responsible for market surveillance and product safety are vulnerable to corruption, and that
they have unclear and overlapping powers, and inadequate staffing.
Chapter 2: Freedom of movement for workers
Citizens of one Member State have the right to work in another Member State and must be
given the same working and social conditions as other workers.
North Macedonia is at an early stage of preparation in the area of freedom of movement for
workers. No progress was made in addressing last year’s recommendations, but the
authorities organised capacity building activities for civil servants who will work on the
European network of employment services (EURES) and the European Labour Authority
(ELA).
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Last year’s recommendations therefore remain valid. In the coming year, North Macedonia
should in particular:
→ strengthen the capacity of the Employment Service Agency, by continuing training
activities, and further align legislation and exchange of good practices, in line with
EURES and ELA regulations;
→ continue to adapt the legal framework to the EU acquis on access to the labour market,
particularly to rules on non-discrimination on grounds of nationality against EU workers
in all sectors;
→ continue negotiating and concluding bilateral agreements on social security coordination
and healthcare insurance with EU Member States and put in place administrative
measures to prepare for accession.
No progress was made on aligning national legislation with the EU acquis on access to the
labour market. Foreign workers entering the country require a work permit. The Agency for
Employment issues several types of work permits for foreign workers in line with the annual
quotas set out in the Law on employment of foreigners. EU citizens still cannot access public
administration posts and some posts in private companies are also exclusive to citizens of
North Macedonia. In 2022, North Macedonia issued 800 work permits to foreign workers and
334 during the first five months of 2023.
Capacity building activities for public servants took place in the area of EURES and the
European Labour Authority over the reporting period.
No new agreements for bilateral coordination of social security systems or for mutual
recognition of the healthcare services were concluded in the reporting period. The country
has 23 bilateral agreements in place for the coordination of social security systems, out of
which 13 are with EU Member States. It also has 18 agreements in place for mutual health
insurance, out of which 12 are with EU Member States.
Citizens of nine EU Member States may use the European Health Insurance Card and the
Card is recognised by public and private healthcare institutions in the country that have a
contract with the Fund for Health Insurance.
The Employment Service Agency needs to adopt an integrity policy document strengthening
the efforts to fight corruption.
Chapter 3: Right of establishment and freedom to provide services
EU natural and legal persons have the right to establish themselves in any Member State and
to provide cross-border services. For certain regulated professions, there are rules on mutual
recognition of qualifications. EU rules on postal services focus on improving the quality of
universal service, gradually opening the market to competition, and the establishment of an
independent regulator.
On the right of establishment and the freedom to provide services, North Macedonia is
moderately prepared. It made limited progress notably on alignment with the Services
Directive. The legislative framework in the areas of postal services and mutual recognition of
professional qualifications remains to be aligned with the EU acquis.
Last year's recommendations remain valid. In the coming year, North Macedonia should in
particular:
→ adopt and start implementing the 2024-2025 action plan to ensure that sectoral laws
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comply with the EU Services Directive, and increase the amount of information and
ensure online access to services under a Point of Single Contact;
→ further align legislation with the EU acquis on postal services, including with the Postal
Services Directive and with the Regulation on cross-border parcel delivery;
→ align with the EU acquis on mutual recognition of professional qualifications, including
Directive on recognition of professional qualifications and Directive on a proportionality
test before adoption of new regulation of professions.
On the right of establishment and freedom to provide cross-border services, North
Macedonia continued to align its legislation with the EU Services Directive by adopting
amendments to the Law on performing accounting activities and the Law on mineral
resources. A new 2024-2025 action plan to address non-compliance of sectoral laws is being
prepared. The point of single contact (www.uslugi.gov.mk) needs to be developed and
upgraded to meet the requirements set out in the Services Directive. By September 2023, 238
services for citizens and businesses were accessible online (applications may be submitted
electronically).
In the area of postal services, national legislation is aligned with the 1997 and 2002 Postal
Services Directives and partly with the 2008 Postal Services Directive, as the designated
universal service provider (the Post of North Macedonia) still has the exclusive right to
provide reserved postal services until 31 December 2023. The Postal Agency is the
independent regulatory authority ensuring compliance with postal law and monitoring quality
of service against European standards for universal service provision in North Macedonia.
There are currently one universal service provider and 33 other postal operators. In view of
the near future postal market opening to full competition, preparations are ongoing to set up
systems for accounting separation and net cost calculation of the universal service, in line
with the Postal Services Directive. North Macedonia is preparing to align its framework with
the Regulation on cross-border parcel delivery services. The Postal Agency and the Ministry
of Transport and Communications should ensure they have sufficient administrative capacity
to monitor and enforce the new postal market rules.
No progress was made on the mutual recognition of professional qualifications. The law
designed to align with the relevant EU acquis has not yet been adopted. National legislation
still needs to align with EU Directive 2005/36/EC to comply with minimum training
requirements. A transparent list of all regulated professions and an electronic register are yet
to be put in place. The institutional capacity of the Ministry of Education and Science’s
section dealing with the mutual recognition of professional qualifications needs to be
strengthened.
Chapter 4: Free movement of capital
In the EU, capital and investments must be able to move without restriction, with common
rules for cross-border payments. Banks and other economic operators apply certain rules to
support the fight against money laundering and terrorist financing.
North Macedonia is moderately prepared in the area of free movement of capital. Good
progress was made on further aligning national law with the EU acquis, with the adoption of
a new law to fight money laundering and financing of terrorism and implementing legislation
on the law on payment systems and services. There is a need to swiftly further strengthen
administrative capacity. In the coming year, the country should, in particular:
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→ refine, adopt and implement the roadmap with actions and timelines for applying EU
rules on the free movement of capital, including the acquisition of agricultural land;
→ continue to implement the new law on payment systems and services, including through
market entry of new payment services providers, contributing to a broader high quality
set of secure payment services, and through advancing the establishment of the unified
register of bank accounts;
→ on the fight against corruption, implement the new legislation on prevention of money
laundering and financing of terrorism in line with the EU acquis, including by adopting
the implementing legislation and by upgrading the register of beneficial owners.
North Macedonia maintained some restrictions on capital movements and payments. For
example, the opening of a bank account abroad by residents is still subject to restrictions and
authorisation. The same conditions apply if residents want to receive insurance services
abroad. Non-residents can still not acquire agricultural land. In this respect, North Macedonia
is lagging on its obligations under the Stabilisation and Association Agreement. The country
should further refine and begin to implement the roadmap for applying EU rules in this area,
in line with obligations under the Stabilisation and Association Agreement. North Macedonia
maintains a register of direct investments and a register of real estate investments for both
non-residents investing in North Macedonia and residents investing abroad. The registries are
largely for statistical purposes and transactions cannot be blocked for failing to be registered
therein.
In January 2023, the law on payment systems and services entered into force. Good
progress was made in terms of alignment of national legislation with EU rules on payment
services, as the National Bank adopted a significant number of implementing acts on payment
institution licensing, e-money institutions and payment system operators, as well as on their
oversight. Moreover, steps were taken to facilitate the comparison of fees among payment
service providers. As required by the fifth Anti-Money Laundering (AML) Directive, the law
on payment systems and services also plans for a unified register of bank accounts to be set
up under the Central Registry.
The new Law on the fight against money laundering and the financing of terrorism that aims
to align with the fifth AML Directive entered into force in July 2022. After the onsite visit of
the Council of Europe’s Committee of Experts on the Evaluation of AML Measures and the
Financing of Terrorism in September 2022, the Moneyval plenary adopted the fifth Moneyval
report in May 2023. In this report, North Macedonia has been rated compliant or largely
compliant in 28 of 40 FATF recommendations. Among the shortcomings identified are a
modest number of convictions related to money laundering, concerns about the
proportionality, dissuasiveness and effectiveness of pecuniary sanctions, the data quality of
the Beneficial Ownership Register, lack of sanctions for failures related to basic or beneficial
ownership information, technical deficiencies on confiscation, lack of systematic approach to
conducting a financial investigation, and a low number of Suspicious Transaction Reports
compared to the to the risk, context, and size of the country. The Financial Intelligence
Office prepared ad hoc assessments of specific trends, such as money laundering threats,
proliferation financing and transactions conducted through fast money transfer service
providers. It also improved its IT applications. In 2022, obliged entities submitted 258
suspicious transactions reports (315 in 2021). The Office sent 44 reports (92 in 2021) of
money laundering and terrorism financing cases and 159 notifications (305 in 2021) of other
cases to law enforcement bodies. (See also Chapter 23 - Judiciary and fundamental rights and
Chapter 24 - Justice, Freedom and Security).
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Chapter 6: Company law
The EU has common rules on the formation, registration and disclosure requirements of a
company, with complementary rules for accounting and financial reporting, and statutory
audit.
The country has a good level of preparation in the area of company law. No progress was
made during the reporting period. The country needs to step up efforts to align its legislation
with the EU acquis in this area.
As last year’s recommendations were not fully implemented, they remain valid. In the
coming year, North Macedonia should in particular:
→ align national legislation with the acquis on encouraging long-term shareholder
engagement, on cross-border conversions, mergers and divisions and on the use of
digital tools and processes in company law;
→ adopt legislation on accounting and on audit aligned with the latest EU acquis in these
areas, to include strengthening the role and capacity of the Council for Advancement
and Oversight of Audit.
On company law and corporate governance, alignment with the Company Law Directive is
well advanced on the formation, registration and domestic, mergers of companies. The
Central Registry provides a modern one-stop-shop system where company registration and
the filing of documents - including financial documents - can be carried out fully online. In
the future, the national business register should be technically ready to interconnect with the
EU Business Registers Interconnection System. The 2021 Corporate Governance Code is
only mandatory for listed companies that meet certain criteria. National legislation is broadly
harmonised with the EU acquis on the legal forms Societas Europaea and European
Economic Interest Grouping, while draft legislation to partially align with the EU acquis on a
European cooperative society awaits adoption by Parliament. Further alignment is necessary
with the EU acquis on cross-border operations (mergers, divisions, conversions), as well as
with the rules on the encouragement of long-term shareholder engagement (2017 Directive),
and 2022 Directive on gender equality on boards of directors.
On company reporting, a draft Law on accounting, aimed at further alignment with the EU
acquis in this area, is going through the adoption process. North Macedonia will need to align
with the most recent acquis (2022) on corporate sustainability reporting. International
financial reporting standards apply to all companies, with no reduced obligations for small
and medium enterprises as provided for in the EU acquis. Although certain provisions of the
acquis on transparency requirements for listed companies are already well reflected in current
national legislation, further alignment is needed in this area. Adoption is also pending of a
new draft law on audit, aimed at reaching greater harmonisation with the EU acquis,
including the area of investigations and sanctions Currently, there is no body with ultimate
responsibility for statutory audit oversight, as required by the EU Audit Directive. The
visibility and overall performance of the Council for Advancement and Oversight of the
Audit remains poor. Efforts are needed to ensure its independence.
Chapter 7: Intellectual property law
The EU has harmonised rules for the legal protection of intellectual property rights (IPR),
copyright and related rights. Rules for the legal protection of IPR cover for instance, patents
and trade marks, designs, biotechnological inventions and pharmaceuticals. Rules for the
legal protection of copyright and related rights cover, for instance, books, films, software and
broadcasting.
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North Macedonia remains moderately prepared in the area of intellectual property law. No
progress was made over the reporting period. Further efforts are needed to align the
legislation with the EU acquis in this area.
As last year's recommendations were not implemented, they remain valid. In the coming year,
North Macedonia should in particular:
→ further improve the legal framework on copyright and related rights, notably by aligning
with the Directive on collective rights management and the Directive on orphan works;
→ further improve the legal framework on industrial property rights, by aligning with the
Directive on the enforcement of intellectual property rights and with the Directive on
trade secrets;
→ implement the 2021-2026 intellectual property strategy and make operational the online
information platform for law enforcement institutions to exchange data on intellectual
property rights.
In the area of copyright and related rights, the adoption of the amendments to the Law on
copyright to further align it with the EU acquis, including on the collective rights
management system, orphan works and certain permitted uses of certain works and other
subject matter protected by copyright and related rights, for the benefit of persons who are
blind, visually impaired or otherwise print-disabled remains delayed. North Macedonia is not
yet aligned with the Directives on online transmissions of broadcasting organisations and
retransmissions of television and radio programmes (SatCab II Directive), on copyright and
related rights in the Digital Single Market (DSM Directive). The relevant intellectual
property rights unit in the Ministry of Culture remains significantly understaffed.
Regarding industrial property rights, the State Office for Industrial Property (SOIP)
continued its cooperation with the EU and international bodies, in particular with the EU
Intellectual Property Office (EUIPO). The SOIP also started to fully use EUIPO’s
harmonised database of products and services for the registration of trade marks. North
Macedonia needs to further align its legislation with the EU acquis in this area, in particular
on patents, trade secrets, and the Directive on IPR enforcement.
On enforcement, the hardware infrastructure of the information platform for exchanging
IPR-related data, still needs to be made operational, in order to provide full insight into the
institutional handling of IPR infringements. The coordination body for the protection of
intellectual property needs to step up its activity to address the key challenges related to IPR.
Substantial work is needed on the overall enforcement of IPR.
From January until the end of August 2023, there were 18 cases of suspected infringement of
intellectual property rights involving 22 380 pieces of 43 trademarks of seized goods.
Violation of intellectual property rights was confirmed in 7 cases (for 9 588 pieces) involving
12 international trade marks.
Chapter 8: Competition policy
EU rules protect free competition. They include antitrust rules against restrictive agreements
between companies and the abuse of a dominant position, and also include rules on
concentrations between companies which would significantly impede effective competition.
EU rules also set out a system of State aid control. Governments are only allowed to grant
State aid if restrictive conditions are met, with a view to preventing distortion of competition.
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The country is moderately prepared in the area of competition. No progress was made in
the reporting period. The Commission for Protection of Competition (CPC) continues to face
budgetary and capacity constraints. The enforcement record remains low.
As last year's recommendations were not addressed, they remain valid. In the coming year,
the country should in particular:
→ further align the legislative framework, in particular the implementing legislation in the
area of State aid and antitrust, with the EU acquis.
→ ensure full transparency of State aid granted by the authorities;
→ strengthen the administrative and financial capacity of the national competition
authority.
Antitrust and mergers
The legislative framework is broadly aligned with the EU acquis in the area of antitrust and
mergers, although parts of implementing legislation remain to be aligned.
On the institutional framework, the CPC is responsible for implementing the Law on the
protection of competition. It can impose fines, propose remedies, or issue an opinion if
competition rules are breached. The CPC may approve mergers, with or without conditions,
or prohibit them. Its decisions are binding and can be subject to an appeal before the
Administrative Court.
The CPC remains understaffed, leading to a limited enforcement capacity. Its annual budget
remains insufficient. The poor capacity of the CPC as well as of the courts dealing with
antitrust cases undermines enforcement.
On implementation, the number of merger decisions increased from 81 in 2021 to 101 in
2022, including decisions on small cases. The CPC should increase onsite inspections and use
the leniency instrument to strengthen enforcement. Further strengthening, including training
of judicial professionals is needed on the application of antitrust and merger rules.
State aid
The legislative framework on State aid broadly reflects Articles 107 and 108 TFEU. The
Law on State aid and its implementing legislation need to be further aligned with the EU
acquis. The State aid inventory still lacks transparency.
On the institutional framework, the CPC is also responsible for implementing the Law on
State aid. The CPC issues non-binding opinions and binding decisions on State aid. The
enforcement capacity of CPC staff dealing with State aid control remains insufficient.
Concerning implementation, the CPC issued 27 decisions and 33 opinions on State aid in
2022. No negative or conditional decisions were adopted by the CPC in the reporting period.
One procedural order has been adopted on completion of procedure examining the existence
of unlawful State aid. Increased awareness among aid-granting public bodies of the existence
of State aid rules is reflected in the growing number of requests for opinions and notifications
of State aid submitted by the ministries to the CPC.
Liberalisation
Antitrust and State aid rules also apply to state-owned undertakings and undertakings
entrusted with special or exclusive rights, except when applying them would obstruct the
performance of the particular tasks assigned to them. There is no evidence of the existence of
commercial monopolies within the meaning of Article 37 TFEU.
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Chapter 9: Financial services
EU rules aim to ensure fair competition among, and the stability of, financial institutions,
namely banking, insurance, supplementary pensions, investment services and securities
markets. They include rules on authorisation, operation and supervision of these institutions.
The country remains moderately prepared in the area of financial services. Some progress
was made on further alignment with the EU acquis on banks and financial market
infrastructure, namely through adoption and entry into force of new legislation on payment
services and payment systems, on financial stability, on credit risk management, and on
disclosure of banks’ data and reports. Alignment with the EU acquis on the supervisory and
regulatory framework for credit institutions and financial market infrastructure is well
advanced. Alignment in the area of insurance and capital market is still lagging behind, partly
due to the size and the structure of the market. The central bank organisational set up was
restructured to reflect its function of a bank resolution authority. The continued failure to
effectively tackle and prevent unregistered and uninsured vehicles is a concern.
Last year’s recommendations were partially implemented. In the coming year, the country
should in particular:
→ adopt the recovery and resolution law to allow for the possibility to design a bank
resolution authority and amend the law on deposit insurance as well as the banking law to
improve deposit insurance in line with EU requirements;
→ advance with the preparation and adoption of key pieces of legislation that regulate capital
markets, namely the Law on financial instruments and the Law on prospectuses and
transparency of security issuers;
→ address gaps in alignment with the revised versions of Capital Requirements Regulation
and Directive, notably with the net stable funding ratio and align with the Solvency II
Directive, notably pillar 1 and pillar 3 of that Directive.
On banks and financial conglomerates, North Macedonia adopted in February 2023 a new
methodology on credit risk management and a decision on disclosure of banks’ data and
reports, partly aligning with both the Capital Requirements Regulation and Directive. The
central bank restructured its organisational set-up by establishing a new department for
banking regulation and bank resolution, separate from the bank supervision sector. Basic
ratios of the banking sector continue to be well above the minimum requirements. The Law
on deposit insurance and the Banking Law have not yet been amended to improve deposit
insurance, including to introduce depositor preference, in line with EU requirements and to
address the concerns raised by the Constitutional Court in June 2021 revoking priority to the
claims of the deposit insurance fund on a failed bank. Neither the legislation nor the capacity
of the Ministry of Finance to license and supervise financial companies sufficiently protect
consumers and both therefore require reinforcement. Legislation on the bank resolution
authority (including a Law on bank resolution and its implementing legislation and
amendments to the Law on the central bank and the Banking Law) is yet to be adopted. The
legal and institutional set-up for establishing the financial Ombudsperson is yet to be
finalised. Legislation aligning with the requirements of the Covered Bond legislation is yet to
be implemented.
On insurance and occupational pensions, legislation aligning with the Solvency II
Directive is yet to be adopted. A new rulebook on life insurance was issued linked to the
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investment risks an insured person undertakes when investing in shares via investment firms.
Legislation still allows the Ministry of Finance to set premiums for motor vehicle insurance,
which is contrary to the EU acquis. Data on the proportion of vehicles that are uninsured is
available, but it is unclear whether these vehicles are actually in circulation. Based on the
number of non-insured vehicles discovered through controls, the portion of uninsured
vehicles was 5.8% in 2022. No systemic measures are taken to prevent uninsured driving.
The 50% limit on investing in non-domestic securities by pension funds is still in place,
contrary to the EU acquis and the second stage of the Stabilisation and Association
Agreement (SAA).
On financial market infrastructure, provisions of the new Law on payment systems and
services aim to achieve a high level of alignment with the settlement Finality in payment
systems. Provisions of the acquis related to securities settlement systems still need to be
reflected in the domestic legislation of North Macedonia. The country’s legislation is not yet
aligned with the Financial Collateral Directive and new legislation in this area remains to be
adopted. The new Law on financial stability adopted in August 2022 regulates the status,
composition, tasks and functioning of the Financial Stability Committee, an interinstitutional
body that monitors the financial system and foresees actions to prevent financial instability.
As regards securities markets and investment services, the Securities and Exchange
Commission issued legislation on the issuance and registration of foreign securities on
domestic markets, as planned under the second stage of the SAA. Legislation still needs to be
further aligned with the EU acquis, including the Markets in Financial Instruments Directive,
the Prospectus Regulation, and the Capital Requirements Directive, as well as provisions on
liquidity and solvency ratios for brokerage houses. Moreover, North Macedonia is still to
align with the EU acquis with respect to MiFIR (Markets in Financial Instruments and
Amending Regulation) and benchmarks. As regards investment funds, North Macedonia has
adopted legislation to align with the Directive relating to undertakings for collective
investment in transferable securities but further alignment with the EU acquis is required in
this area. Moreover, North Macedonia is still to align with the EU acquis with respect to the
Directive on alternative investment fund managers and the Directive on the cross-border
distribution of undertakings for collective investment in transferable securities.
On sustainable and digital finance, North Macedonia is not yet aligned with the EU acquis
on taxonomy, nor on EU Climate Transition Benchmarks, EU Paris-aligned Benchmarks and
sustainability-related disclosures for benchmarks. The National Bank has started working on
the development of a Strategy for the management of climate-related risks, which will cover
regulatory and supervisory activities, as well as activities related to monitoring the impact of
these risks on financial stability. As part of the Strategy, North Macedonia adopted a
Decision on the methodology for credit risk management in February 2023, according to
which banks will be required to adequately incorporate the climate-related risks in their credit
risk management from January 2025. Finally, the country’s Stock Exchange has prepared a
Guide for environmental, social and governance (ESG) reporting for listed companies, in
order to raise awareness among policy makers, regulatory and institutional investors.
Chapter 28: Consumer and health protection
EU rules protect consumers' economic interests and in relation to product safety, dangerous
imitations and liability for defective products. The EU also ensures high common standards
for tobacco control, blood, tissues, cells and organs, and medicines for human and veterinary
use. The EU also has rules for upholding patients’ rights in cross-border healthcare and in
preparing for and responding to cross-border health threats.
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In the area of consumer and health protection North Macedonia remains moderately
prepared. Some progress was made on addressing last year’s recommendations, by the
adoption of the new Law on consumer protection, which is designed to align with many items
of the EU consumer acquis. The other recommendations remain valid. The country’s first-
ever liver transplantation was made. Many challenges remain to be addressed in the area of
public health, notably in regard to tobacco control, and the availability, scope of services,
geographical distribution and funding of primary healthcare and on cancer screening could be
improved. Alignment with EU health acquis remains incomplete.
In the coming year, the country should in particular:
→ adopt and start to implement the next three-year consumer protection strategy and
reinforce the capacity for market surveillance;
→ intensify efforts on tobacco control by implementing the relevant EU acquis effectively
and ratifying the Protocol to Eliminate Illicit Trade in Tobacco Products;
→ ensure adequate funding and capacity to ensure the early detection of cancer and rare
diseases based on data from the registers.
Consumer protection
The country adopted a new Law on consumer protection designed to align with several of
the EU consumer acquis, including the acquis establishing rules on unfair terms in consumer
contracts, unfair business-to-consumer commercial practices, price indication timeshare and
long-term holiday product, resale and exchange contracts, consumer rights, digital content
and services, and the sale of goods. The Law on consumer protection is also designed to be
aligned with the latest changes to EU consumer acquis introduced by Directive (EU)
2019/2161 on the better enforcement and modernisation of Union consumer protection rules
and the EU acquis on liability for defective products (relevant to product safety – see below),
though implementing legislation on this still needs to be adopted. National legislation is not
yet aligned with the current EU acquis on package travel. The law on consumer protection
clearly defines the responsibilities of the physical and legal commercial bodies towards
consumers. The next three-year consumer protection strategy is yet to be adopted. The web
platform providing information on consumer protection still needs to be developed. The
mediation scheme remains expensive and difficult for consumers to access.
Some progress was also made in aligning national product safety rules with the EU acquis
(see above). The country now needs to adopt the implementing legislation necessary to
complete the alignment with the EU General Product Safety Directive. The State Market
Inspectorate intensified inspections under the national Law on general product safety (500 in
2022, up from 428 in 2021) and carried out 130 inspections under the Law on construction
products. The Inspectorate maintained its good cooperation with the customs for control of
harmful products on the market. The number of inspections increased to 4 838 in the
reporting period. The number of licenced inspectors (170) remains insufficient as many of the
staff are close to retirement. On non-safety-related issues further efforts are needed on
developing the guidance and procedure for consumers’ appeals and means of compensation.
Public health
Primary healthcare in North Macedonia is provided free of charge. However, the
availability, scope of services, geographical distribution and funding of primary healthcare
could be improved. During the reporting period, the e-health application was updated with
new functionalities and new modules, and a mobile application called “MyHealth” was
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launched. This allows patients access to their health record, including what medical
examinations they have had, referrals to specialists, prescriptions, vaccines received, and
relevant certificates. Certain specialists continue to be lacking. The ratio of doctors and
nurses per 100 000 inhabitants continues to be below the EU average, and medical staff,
nurses and specialists continue to leave the public health sector to work either in the private
sector or abroad. Out-of-pocket healthcare costs remain high, at 38%, constituting a barrier to
equal access to healthcare.
No progress was made on tobacco control. Though the institutional and legal setup is in
place are broadly aligned with the EU acquis on smoking in public places, it is not
systematically implemented and is still broadly tolerated and unsanctioned, especially in
restaurants and other facilities, even in some closed areas. Smoking in public areas should be
penalised in line with the EU acquis, but this is not fully applied. North Macedonia has not
yet ratified the Protocol to Eliminate Illicit Trade in Tobacco Products. On communicable
diseases, the upgrade of the syndromic disease reporting system in real time was completed.
On COVID-19, few preventive measures remain in place.
Progress was made on blood, tissues, cells and organs. The number of performed
transplantations continued to increase, including the first-ever liver transplantation. However,
the country is yet to align with the acquis on patients’ rights in cross-border healthcare.
On medicines for human and veterinary use, legislation was adopted, designed to align to
the acquis on residues of pharmacologically active substances, residues of pesticides and the
maximum levels of individual contaminants in and on food from animal origin. As regards
cancer screening, the first report on the National Register of Malignant Neoplasms was
published. A comprehensive and proactive approach on cancer screening is lacking, and
funding for cancer screening is insufficient. Following public pressure, funding for rare
diseases somewhat increased but not sufficiently to cover the costs for medical treatment of
all registered patients. An online survey was done on drug abuse prevention, and there was
awareness raising in schools on drug abuse and alcohol related harm reduction. There was
no progress on healthy environments. Some efforts were made with regard to fighting
health inequalities, particularly for people living in poverty and people living in remote
areas, though these were led by international organisations and the non-governmental sector
rather than by the health authorities.
The national strategy for the prevention of corruption identified the health sector and
inspectorates as vulnerable to corruption, in particular as there are no effective criteria for
determining the prices of health services or of medicines. Procedures for treatment abroad are
non-transparent and not objective. The inspectorates responsible for market surveillance and
product safety have unclear and overlapping jurisdictions, and inadequate staffing. Most of
the anti-corruption strategy activities in the health area have not been carried out.
Strengthening integrity, asset declarations and digitalisation are considered key tools for
preventing corruption.
CLUSTER 3: COMPETITIVENESS AND INCLUSIVE GROWTH
Cluster 3 on competitiveness and inclusive growth covers the following chapters: digital
transformation and media (chapter 10); taxation (chapter 16); economic and monetary policy
(chapter 17); social policy and employment (chapter 19); enterprise and industrial policy
(chapter 20); science and research (chapter 25); education and culture (chapter 26) and
customs union (chapter 29).
Overall, North Macedonia is moderately prepared in most of the areas covered by this cluster.
The country is in between a moderate and a good level of preparation in the area of economic
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and monetary policy. It has a good level of preparation in the areas of science and research
and in the customs union. Some progress was made in the areas of taxation, economic and
monetary policy, enterprise and industrial policy, science and research policy, as well as
social policy and employment. More efforts are needed, however, particularly in areas where
limited progress was made, such as digital transformation and media, customs union, and
education and culture.
Chapter 10: Digital transformation and media
The EU supports the smooth functioning of the internal market for electronic
communications, electronic commerce and audio-visual services. The rules protect
consumers and support the universal availability of modern services.
The country is moderately prepared in the area of digital transformation and media.
Limited progress was made during the reporting period, consisting of a slight increase in the
number of electronic services offered to citizens and businesses. The Law on audio-visual
media was amended in order to align with the EU Directive on Audiovisual Media Services
of 2018 in July 2023. North Macedonia joined the Digital Europe Programme in 2023. The
services of the 112 European emergency number were further developed.
Last year’s recommendations remain valid. In the coming year the country should:
→ finalise and adopt the long-term information and communication technology (ICT)
strategy; finalise and adopt the national cybersecurity strategy for 2023-2027; align
national legislation with the European Electronic Communications Code, the EU
broadband cost reduction Directive; the EU Directive on security of network and
information systems (NIS 2 Directive) and the 5G toolbox;
→ strengthen the independence and capacity of the media regulator, the Public Service
Broadcaster and the regulator on electronic communication;
→ improve the functioning of the 112 emergency number by ensuring adequate human
resources and improve communication among emergency services.
The country continued to successfully participate in the Digital Agenda for the Western
Balkans and benefit from the regional roaming-free agreement. In line with the 2019-2023
national broadband operational plan’s targets, 5G signal was expanded to Skopje. Authorities
continued to carry out activities included in the 2018-2022 national cybersecurity strategy.
However, there is need for better coordination and interinstitutional cooperation. North
Macedonia needs to adopt the national cybersecurity strategy for 2023-2027. The 112
European emergency number services increased their capacity, but communication among
emergency services and human resources need further improvement.
On electronic communications and information technologies, in 2022, 75.57% of all
households had access to fixed broadband internet, while nationwide broadband coverage
with 30-100 Mbps stood at 82.84% and >100Mbps at 63.1%. Mobile broadband take-up
increased to 86.12%. Only 2.53% of all households had access to ultrafast broadband
internet. Segregated data on access to internet by schools, hospitals, enterprises, etc., is not
collected by the Agency for Electronic Communications. This Agency granted approvals for
the use of radiofrequencies for 5G. Telecom operators continued to invest throughout the
country. No progress was made on aligning the legal framework on electronic
communications with the EU acquis. The Broadband Competence Office publishes biannual
reports on the broadband development in the country and the implementation of the National
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Operational Broadband Plan. Authorities need to align national legislation with the EU
Broadband Cost Reduction Directive.
The alignment of national legislation with the EU Regulation on electronic identification and
trust services for electronic transactions in the internal market (eIDAS Regulation) was
further delayed. Alignment with the Digital Services Acts and Digital Markets Act needs to
be stepped up, to provide predictability for the business community. Amendments to the Law
on audio and audio-visual media services were adopted on 18 July 2023, thus aligning the
legislation with the Audiovisual Media Services Directive.
On competitive safeguards, the telecom market remains predominantly shared by the two
biggest mobile operators.
Regarding digital transformation, the long-term information and communication
technologies strategy for 2021-2026 has not been adopted. The strategy's activities on digital
skills development should be built upon and supported with specific measures. The country
signed an association agreement to the Digital Europe Programme on 30 June 2023.
The national regulator promoted cybersecurity through its national centre responding to
computer incidents. Cyber-related incidents were reported in 145 entities such as state
institutions, banking, health, energy, transport and communications organisations. Better
coordination and interinstitutional cooperation is needed on cybersecurity and on
strengthening the National Cybersecurity Council’s capacity. State institutions need to further
strengthen their cyber capacity and infrastructure.
The new law on security of networks and information systems, needs to be adopted to align
with the NIS and NIS2 Directives. The Ministry of Information Society and Administration
needs to strengthen its capacity to drive the digital transformation and media reforms. The
full independence of the regulator for electronic communications needs to be ensured.
The national e-portal for services has been upgraded. The number of institutions connected to
the interoperability platform was increased, but the platform is not being used by most of the
state institutions because of the lack of communications software. To modernise and
digitalise the public sector, more efforts and better cooperation among institutions are still
required. The quality of data in the population register needs to be improved and
continuously verified with other registers. The number of digital services offered through the
governmental e-portal remains modest, 392, mainly consisting of services that are rarely
requested and used. State institutions need to ensure better cooperation in advancing the
digitalisation of the government 96.940 users were registered on the national e-portal.
With regard to e-commerce, online shopping increased. On statistical performance and
digital competitiveness, the collection of data based on the Digital Economy and Society
Index (DESI) indicators needs to be improved.
On audio-visual policy, the Parliament failed to appoint new members of the media regulator
and the public broadcaster councils, despite this being a precondition for accelerating media
reforms. The Public Service Broadcaster received additional funding, thus slightly increasing
its percentage. (See also the section: freedom of expression). In July 2023, the Law on audio
and audio-visual media services was amended to align with the 2018 EU Directive on
Audiovisual Media Services.
During the reporting period, the Agency for Audio and Audio-visual Media Services
continued to fulfil its legal obligations on the promotion of media literacy, to analyse gender
equality in the media and to supervise the broadcasters. The media regulator publicly
condemned the pressure and threats on journalists and media outlets. The national strategy
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and action plan on building resilience and confronting hybrid threats (2021-2025) includes
measures to address disinformation and hybrid threats. However, efforts to combat
disinformation are limited. The audio-visual sector continued to benefit from the country’s
participation in the MEDIA and cross-sectoral strands of the Creative Europe programme.
Chapter 16: Taxation
EU rules on taxation cover value-added tax, excise duties and aspects of corporate taxation.
They also cover cooperation between tax administrations, including the exchange of
information to prevent tax evasion.
North Macedonia is moderately prepared in the area of taxation. Some progress was made
specifically in amending its preferential tax regime in the technological and industrial
development zones. As a result, North Macedonia was removed from the Annex II list of the
non-cooperative jurisdictions for tax purposes. The country has yet to start the automatic
exchange of financial account information as per the Organisation for Economic Co-operation
and Development (OECD) standard.
As some of last year’s recommendations were not fully implemented, they remain valid. In the
coming year, North Macedonia should in particular:
→ develop a new integrated IT tax system for the Public Revenue Office (PRO), improve its
compliance risk management and the strategic reform process of the PRO;
→ start preparations for putting in place a mechanism to implement the automatic exchange of
financial account information with EU Member States effectively, in line with the OECD
global standard.
On indirect taxation, the VAT exemptions and preferential rates for essential products were
removed at the end of 2022. A preferential VAT rate of 10 % was applied for some energy
products to alleviate the effects of high international energy prices. The preferential VAT rate
of 10% for electricity for households was applied until 30 June 2023. Delays still remain in
the VAT refund process, as only 45% of the requests submitted in 2022 were refunded within
the legal deadline of 30 days.
There were some changes to direct taxation. A personal income tax flat rate of 10% was
complemented with a rate of 15% for income stemming from games of chance. Exemption
from taxation on interest on savings and from taxation on capital gains on securities was
abolished with the amendments to the Law on personal income tax, as of 1 January 2023. The
country still needs to align its legislation with the Merger Directive.
On administrative cooperation and mutual assistance, North Macedonia has signed 49
double taxation agreements, including with all EU Member States except Cyprus, Malta,
Portugal and Greece, with whom negotiations are ongoing. The country has not yet
committed on a date to start the automatic exchange of financial account information as per
the OECD standard. The country remains dedicated to implementing the Inclusive
Framework on Base Erosion and Profit Shifting (BEPS) minimum standards. In January
2023, North Macedonia amended its preferential tax regime in the free economic zones, thus
meeting the Forum on Harmful Tax Practices and the EU’s requirements to promote good
governance in the area of taxation.
Regarding operational capacity and computerisation, the PRO still has to improve its
business processes, implement a new integrated IT tax system replacing the current
fragmented IT system, develop compliance risk management and continue to expand e-
services. Work on the 2021-2025 tax system reform strategy continues. During the reporting
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period, the Law on PRO was amended to allow for a more dynamic organisational structure
to correspond with the ongoing IT modernisation process. A stronger monetary incentive for
customers to request invoices on their purchases was introduced, with the aim of combating
the informal economy. The PRO took part in joint inspections with other national bodies to
identify unpaid tax liabilities and unregistered taxpayers in order to improve tax collection.
The PRO and the State Commission for the Prevention of Corruption signed an Agreement
on data exchange and cooperation. The PRO is obliged to provide data from the unique
register of taxpayers to the SCPC, in accordance with the Law on prevention of corruption
and conflict of interest.
Chapter 17: Economic and monetary policy
EU rules require the independence of central banks and prohibit them from directly
financing the public sector. EU Member States coordinate their economic policies and are
subject to fiscal, economic and financial surveillance.
The country is in between a moderate and a good level of preparation in the area of
economic and monetary policy and some progress was made. A new Organic Budget Law
was adopted by Parliament in September 2022 and the drafting of implementing legislation
was initiated. The three members of the new Fiscal Council were appointed by Parliament
in September 2023. On monetary policy, alignment of the country’s legal framework with
the EU acquis remains at an advanced stage. On economic policy, the information provided
in the fiscal strategy has been enhanced , but alignment with the EU fiscal framework is
only partial and shortcomings on the monitoring of the fiscal risks persist.
In the coming year, North Macedonia should in particular:
→ adopt implementing legislation to the Organic Budget Law with a view to fully applying
fiscal rules, a strengthened medium-term budgetary framework and a prudent
management of fiscal risks;
→ take the necessary legislative and organisational steps to enable the Fiscal Council to
take up operations and assess the 2024 budget and the new fiscal strategy;
→ exclude the central bank from the scope of the Law on administrative servants, the Law
on public sector employees and the Law on the payroll system.
On monetary policy, the alignment of the legal framework of North Macedonia with the EU
acquis remains at an advanced stage. In line with the objectives of the European System of
Central Banks, the central bank pursues price stability as its primary objective. The central
bank also supports economic growth through its policies. A subordinate objective is to
contribute to safeguarding a stable, competitive and market oriented financing system.
Monetary policy has been appropriately tightened in response to rising inflation. Continued
vigilance remains important, also in view of a wide, albeit narrowing inflation differential
with the euro area. The functional and financial independence of the central bank is provided
for in the Law on the National Bank. There is a need to maintain the central bank’s
independence in its key statutory tasks, including in staffing issues, in line with the Law. In
that vein, the central bank needs to be excluded from the scope of laws which may affect its
independence, including the law on administrative servants, the law on public sector
employees as well as the newly proposed public sector payroll law. The central bank should
be able to conduct internal organisations and employment plans without having to seek the
approval of the government.
Regarding economic policy, North Macedonia began drafting implementing legislation for
the 2022 Organic Budget Law (OBL) in line with the EU Budgetary Frameworks Directive.
93
The new Law provides for numerical fiscal rules for the general government deficit and debt ,
the establishment of an independent fiscal council, and improvements in the medium-term
budgetary framework. The provisions of the new OBL should be swiftly implemented in full.
The medium-term fiscal consolidation presented in the 2023-2027 Fiscal Strategy is reflected
in the 2023 budget, supported by a rules-based budget framework under the new Organic
Budget Law. Preparations have advanced on setting up an independent Fiscal Council to
monitor compliance with the rules and verify macro-fiscal projections, and the medium-term
fiscal framework was strengthened within the 2024-2028 fiscal strategy which was adopted in
June 2023. Limited progress was made on strengthening the monitoring of fiscal risks related
to state-owned enterprises, public-private partnerships and local government units. As
envisaged by the OBL, there is a need to develop a comprehensive registry of state-owned
enterprises and a methodology to assess related risks.
The 2023-2025 Economic Reform Programme (ERP) was submitted on 1 February 2023.
The country has partially implemented the country-specific policy guidance jointly adopted
by the EU and the Western Balkans and Türkiye at ministerial level in May 2022. The level
of implementation of the policy guidance has improved compared to last year, notably due to
progress in the macro-fiscal area. The ERP’s macro-economic framework is coherent and
consistent, while somewhat optimistic. For structural reforms, the focus is on addressing
properly-identified key structural challenges, including the green transition. Implementation
of the ERP’s structural reforms measures needs to improve, as it has been affected by the
limited capacity of public institutions and a focus on short-term measures to offset the energy
crisis.
Chapter 19: Social policy and employment
EU rules in the social field include minimum standards for labour law, equality, health and
safety at work and non-discrimination. They also promote social inclusion and social
protection, and social dialogue at EU level.
The country remains moderately prepared in the area of social policy and employment.
Some progress was made, notably on steadily reducing unemployment and increasing social
assistance benefits. The Youth Guarantee scheme was implemented successfully throughout
the country. The negative impact of the energy crisis was offset by the continuous application
of social protection measures, ensuring that the poverty rate did not increase.
Last year's recommendations were partially implemented. In the coming year, the country
should in particular:
→ continue to implement the Youth Guarantee as well as activation measures for vulnerable
groups, and set up systems to properly evaluate the measures;
→ enhance the capacity of the State Labour Inspectorate to better address matters related to
occupational safety and health; develop a system for tracking and monitoring injuries and
fatalities at work; and continue to reinforce bipartite social dialogue focusing on
collective bargaining and to strengthen the role and activity of social partners in the
private sector;
→ finalise the set-up of a monitoring system, ensure proper evaluation of social services and
continue the social protection reform with emphasis on employment activation.
On labour law, extensive public consultations were held across the country on the yet-to-be-
adopted new law on labour relations. As of March 2023, the minimum salary increased by
approximately 12%. The capacity to implement labour policies and legislation did not
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increase, and a reduction in the number of competent staff in public institutions was noted.
The capacity of the State Labour Inspectorate (SLI) is as insufficient as last year. The annual
plan for individual professional development and training of labour inspectors is under way
but capacity needs to be increased further, in particular in the area of occupational safety and
health. The SLI signed a memorandum for cooperation with the Public Revenue Office and
the Ministry of Interior to improve efficiency and cooperation for preventing irregularities in
labour law, the fight against human trafficking and labour exploitation.
On health and safety at work, the 2021-2025 strategy for occupational safety and health and
2021-2023 action plan remain valid. The main challenge remains the inadequate application
of the provisions of the existing Law. Employers' and employees' knowledge of their
respective rights and obligations on health and safety at work remains limited whereas the
capacities of labour inspectorates need to be further increased. However, the national award
on health and safety has raised awareness among employees. The SLI carried out 24 965
inspections (16 026 on labour relations and 8 939 on occupational safety and health).
Shortcomings and irregularities were identified in 38% of the inspections, mainly resulting in
warnings (3 202).
On social dialogue, social partners engaged in constructive tripartite social dialogue both at
national and local level. The level of their involvement in policy development and policy
change is inconsistent, representing a significant challenge . In July 2023, a new collective
agreement for public sector employees was signed between unions and authorities. The
bipartite social dialogue continues to face challenges due to poor adoption and enforcement
of collective agreements affecting workers' rights and job security. Measures to encourage
collective bargaining and strengthen the role of social partners in the private sector are
insufficient. Overall implementation of the Law on the peaceful settlement of labour disputes
remains poor, with only five recorded cases of successful amicable resolution in 2022. The
capacity of social partners remains low, affecting the efficiency of social dialogue. Overall,
more strengthening of social dialogue and promoting collective bargaining in both the public
and private sectors is required including from the authorities.
On employment policy, the labour market forecasting model was extended to 11 additional
descriptions, bringing the number of occupations covered to 85. The 2021-2027 national
employment strategy and the 2021-2023 employment action plan remain valid. Measures to
tackle undeclared work included in the 2018-2022 strategy for the formalisation of the
informal economy continued. Authorities adopted the strategy for the formalisation of the
informal economy 2023-2027 along with the Action Plan for the period 2023-2025 in
September 2023. Active labour market measures and the reinforced Youth Guarantee scheme
are currently not sufficiently monitored, evaluated and assessed. The Employment Service
Agency is under-staffed.
The employment rate (aged 20-64) in Q4-2022 was 61.8% for the whole population. The
unemployment rate decreased further to 13.7 % in Q4-2022. The female employment rate
increased by 3.2% (51.8% of 15-64 year-olds). Youth (15-24 year-olds) employment
remained at 18.3% and youth unemployment decreased to 31.8% in Q4-2022, compared to
34.9% in Q4-2021. The main measure addressing youth unemployment remains the Youth
Guarantee scheme. A new plan for implementing the 2023-2026 Youth Guarantee was
adopted by the authorities in March 2023. In 2022, more than 20 000 young people
participated in the scheme, with 43% of them successfully finding employment or training
opportunities. 969 Roma people participated in the scheme, out of which 148 found
employment.
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On participation in the European Social Fund, it is important to ensure that state bodies
have the necessary capacity to manage the indirect management with the beneficiary country
system. (See also Chapter 22 - Regional policy and coordination of structural instruments).
Progress was made on social inclusion and protection and on minimising the impact of the
pandemic and energy crises. Additional subsidies were introduced, ensuring more
comprehensive coverage for people in need. Guaranteed minimum assistance (GMA) was
extended to reach 35 748 households. In addition, 31.7% of GMA recipients benefited from
the child allowance and 21.2% from education allowances. Coordinators were appointed to
facilitate communication between employment services and social work centres, and
guidelines for supporting individual activation plans were developed. The 2022-2032 national
programme for the development of social protection was adopted along with a roadmap for
future improvements. The new 2023-2030 strategy for rights of persons with a disability and
the 2023-2025 action document are yet to be adopted. The software for integrating cash
benefits and social protection services needs to become operational. The decentralisation of
social assistance remains at a moderate level. The accessibility of public services such as
socio-health, employment, vocational education, and in particular specialised services for the
people with disabilities and Roma, remained limited. The employment of Roma, the long-
term and low-skilled unemployed, and people with disabilities is supported by the guaranteed
minimum assistance scheme introduced by the Law on social protection.
As part of the national strategy on de-institutionalisation a total of 57 residential units were
made functional by June 2023, providing living support to children and adults with
disabilities. The number of children under the age of 18 in institutional care remained stable.
The adoption of a methodology for licensing and calculating social service costs enabled
services such as home care, personal assistance, supported living, and respite care to be set up
and improved. A total of 85 civil society organisations and private providers of social service
assistance are now available to serve the diverse needs of individuals.
On non-discrimination in employment and social policy, a comprehensive legislative
framework is in place. However, the Law on promotion and protection against discrimination
needs to fully align with EU anti-discrimination provisions. 53.5% of the cases on which the
Commission for the Prevention and Protection against Discrimination worked referred to
employment and labour relations. (See also Chapter 23 - Judiciary and fundamental rights).
On equality between women and men in employment and social policy, the gender gap in
the labour market remains. In particular, the employment rate for men was 56.3% compared
to 38.3% for women in 2021. Furthermore, 55.5% of women are inactive compared to 33.3%
of men. Data on and a monitoring system for incidents of sexual harassment in the workplace
are still not available. Some progress was made with the adoption of the 2023 programme for
social security support for women in agriculture, entitling women with 'insured individual
farmer' status to maternity benefits for the first time. Childcare and pre-school capacity
increased during 2022 with the opening of seven new institutions and 10 facilities within
public institutions. Childcare facilities increased, reaching a total of 36 125. Childcare
capacity needs to be increased in urban areas in particular. The gender pay gap persists and
authorities need to produce reliable data monitoring the gap. The 2022 Labour Force Survey
indicated that the gap is a result of the fact that women are mostly concentrated in low-paying
sectors and positions. The average net wage for men in 2021 was 2.6% higher than the
average net wage, while the average net wage for women was 3.9% lower than the average
net wage.
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The work to prepare the Law on the prevention and protection against workplace harassment
continued while the ILO convention 190 – 2019 Violence and Harassment was adopted in
June 2023.
Chapter 20: Enterprise and industrial policy
EU industrial policy strengthens competitiveness, facilitates structural change and encourages
a business-friendly environment that stimulates small and medium-sized enterprises (SMEs).
The country is moderately prepared in the area of enterprise and industrial policy. Some
progress was made on last year's recommendations and entailed measures to increase the
competitiveness of domestic companies. Recommendations from last year therefore remain
largely valid and in the coming year, the country should, in particular:
→ consolidate the institutional structure and mandates of public bodies and increase the
effectiveness of industry and enterprise policy measures;
→ adopt and start implementing the export promotion strategy;
→ start implementing the new 2023-2027 strategy for formalising the informal economy,
with an action plan, and ensure high-level political commitment.
Enterprise and industrial policy principles are incorporated in numerous strategic
documents under the competence of different national authorities. Overall coherence and
coordination is lacking in this area. Overlapping and conflicting mandates continue to make
the institutional set-up complex and resources inefficient. To address this issue, the
government adopted a plan to consolidate part of the administrative structure, with merging
some institutions and integrating others into the Ministry of Economy. However, the plan is
yet to be implemented (see also the section on public administration reform). Progress in
implementing the 2022-2026 growth acceleration plan is slow.
The State Audit Office identified shortcomings in measures for tourism, for companies
affected by COVID-19, the operation of the Fund for Innovations and Technological
Development as well as in the Directorate for technological zones (see also the section on
Accountability of the administration and chapter 32 – Financial Control).
The dialogue with chambers of commerce through the joint platform continued throughout
the reporting period. The conduct of stakeholder consultations though is irregular (see also
sections on Economic Criteria and Public administration reform). Legislation related to
companies is frequently amended without an adjustment period for companies.
The business environment was negatively affected by several factors, such as an increase in
the minimum wage and in some para-fiscal charges. There was some progress against
informal business activities: a methodology to streamline para-fiscal charges was developed
and taxation got somewhat less distortive. The 2023-2027 strategy for formalising the
informal economy and an action plan 2023-2025 were adopted in September 2023.
Cooperation of SMEs in innovation activities and ICT training by enterprises require more
attention to reverse an unfavourable development over the past years. The export promotion
strategy, targeting the internationalisation of domestic companies is still to be adopted.
On policy instruments, in April 2023, North Macedonia signed the Association Agreement
for the participation in the EU Programme “Single Market Programme”.
Amendments to the Law on financial discipline to further align with the EU Late Payments
Directive were adopted in June 2023. Nevertheless, still some key issues need to be clarified,
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for example the criteria of calculation of the payment periods or the right to the flat fee
compensation.
The Development Fund was established in 2022 and the mechanism for the functioning of the
Hybrid Strategic Green Investment Fund has been put into operation for support to export of
innovations and to European Green Deal practices. To mitigate the effects of the energy crisis
and high inflation, the government introduced support measures that should be better
targeted. Numerous policy measures based on grants to companies are in place, but as they
have the potential to distort market competition and incentivise informal business while
lacking transparency, they need to undergo an in-depth evaluation.
In terms of sectoral policies, as a first step towards developing a circular economy roadmap,
the Ministry of Economy completed the mapping of the circular economy potential.
Chapter 25: Science and research
The EU provides significant support to research and innovation. All Member States can
participate in the EU’s research and innovation programmes and benefit from them,
especially where there is scientific excellence and a solid investment in research and
innovation.
The country has a good level of preparation in the area of science and research. Some
progress was made on strengthening the research and innovation capacity of the public and
private sector by increasing the budget for science, by developing the yet to be adopted smart
specialisation strategy and through the country’s continuous improvement in the Horizon
Europe participation. Some of last year's recommendations remain valid.
In the coming year, the country should:
→ increase investment in research in line with the new European Research Area priorities;
→ develop dedicated measures aiming to promote and increase participation in Horizon
Europe and other relevant EU financing instruments in this area;
→ adopt the smart specialisation strategy and start developing measures for its
implementation.
Some progress was made to align with European standards on research and innovation. The
budget for science in 2022 and 2023 has been increased significantly compared to 2021 (to
approximately EUR 3.5 million from EUR 1.3 million). However, investment in research and
innovation continues to remain low, at 0.38% of GDP, while the participation of the private
sector in the overall research is even lower, at 0.1% of GDP.
The country’s participation in Horizon Europe, the EU’s framework programme for research
and innovation, has continued to increase, reaching for 2022 (according to data availability at
publication date), 10 projects with EUR 4 million funding, surpassing the whole 2021
performance. Authorities need to strengthen their participation in the new European Research
Area and in the new European Innovation Agenda. No progress is noted on the European
Charter for researchers, the Code of Conduct for the recruitment of researchers and the
number of HR Excellence in Research logos issued over the reporting period. The national
technology transfer roadmap has not yet been developed.
On innovation, the European Innovation Scoreboard classifies for a second consecutive year
North Macedonia as an ‘emerging innovator’ marking however an increase in its score
performance from 45.6% in 2022 to 46.3% of the EU average in 2023. In 2022, the Fund for
Innovation and Technological Development committed nearly EUR 16.5 million to support
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innovation and research in 209 private companies. Τhe Fund’s efforts to intensify synergies
between businesses and academia need to continue to increase prioritising the facilitation the
green and digital transitions. The Fund needs to comply with the findings of the State Audit
Office’s compliance audit report, issued in December 2022. Authorities should further
support the academia-business cooperation. The European Institute of Innovation and
Technology (EIT) announced that in the 2023 EIT higher education initiative, two higher
education institutions from North Macedonia were selected for funding as full partners of
large consortia.
The smart specialisation strategy, the main policy document for innovation and research
with clear sector-specific priorities, has not been adopted yet, providing a safeguarded
framework for an efficient use of research and innovation funds.
Chapter 26: Education and culture
The EU supports cooperation in education and culture through funding programmes and the
coordination of Member State policy through the 'open method of coordination'. The EU and
the Member States must also prevent discrimination and ensure quality education for
children of migrant workers, including those from disadvantaged backgrounds.
North Macedonia is moderately prepared in the area of education and culture. Limited
progress was made in the reporting period with the adoption and introduction of guidelines
and programmes to strengthen inclusiveness and promote green skills. The implementation of
the 2018-2025 education strategy continued to be slow, as did the development of a proper
monitoring system. The adoption of key legislation was further delayed.
The recommendations of last year’s report remain valid. In the coming year, North
Macedonia should in particular:
→ finalise and adopt the Law on secondary education and the Law on vocational education
and training and set up and operationalise the regional VET centres;
→ adopt the Law for adult education;
→ improve access to quality education for all, in particular children with disabilities and
children from Roma communities; and increase pre-school enrolment and continue
improving support for teachers’ training and professional development.
The 2018-2025 strategy for education is the main document governing the education sector,
but its monitoring mechanisms are not well defined. Targets and indicators need to be
improved to allow a proper evaluation of the implementation of the reforms. Authorities need
to strengthen coordination among institutions in developing legislation, ensuring a conducive
institutional environment able to deliver its implementation.
The new law on VET which is essential for the VET reform is yet to be adopted. Its adoption
is also needed to enforce the role of the country's five regional VET (RVET) centres. A
cooperation scheme is in place between business companies, vocational high schools, the
Chambers of Commerce and the Ministry of Education to support students’ internships in
private companies. Approximately 100 dual-education classes opened under this scheme,
supported by public-private partnerships.
The Law for adult education has not yet been adopted. The Bureau for Development of
Education continued its activities for the Concept for primary education by preparing
curricula for primary grade 6, based on the national standards, including green skills
provision.
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In November 2022, the Ministry of Education and Science adopted the 'Concept for
secondary adult education' to help improve quality of life for citizens and enable social
development.
Public spending on education and training decreased slightly to 3.71% of GDP in 2022
(3.98% in 2021), which is still far below the EU average of 5%. Although some progress was
made on pre-school education, the overall level of enrolment remained lower than the
regional and EU standards, especially for Roma children. Whereas the EU education and
training target on early childhood education and care attendance is set at 96%, only 42% of 3-
6 years-olds were enrolled in licenced early childhood education institutions in 2022. In
addition to expanding capacity to extend pre-school education to more children, the quality
of pre-school education was increased.
96.63% of children were enrolled in primary education (of which 51.46% were boys, 48.54%
were girls) and 85.59% in secondary education (of which .49% were girls, 51% were boys) in
the 2021/2022 school year. In higher education, the overall enrolment remains low. The
number of university students enrolled in the first year of studies has been declining in the
last 3 years.
Although North Macedonia has taken steps toward the digital transformation of its education
and training system and digital skills are addressed throughout primary and secondary either
cross-subject or through the subject of informatics, authorities need to continue to strengthen
efforts towards effective, coherent and inclusive digital transformation of the education and
training systems in North Macedonia, including the capacity of the systems to develop digital
skills.
The country had engaged in international assessments of the education system (TALIS 2022,
PISA 2022) during the reporting period. North Macedonia is not taking part in ICILS
(International Computer and Information Literacy Study). The country continued to
participate in the European Education Area (EEA) Working Groups 2021 - 2025.
The National Agency for Erasmus organised and supported more than 100 activities and
events targeted at young people. The number of participants in funded youth exchange
projects was 465 in 2022 (compared to 294 in 2020).
North Macedonia continued to participate in Erasmus+ and the European Solidarity Corps
and participated also in the call for proposals for the European universities initiative, with
one university winning a grant as part of a successful alliance. North Macedonia is
participating in the European Education Area working groups 2021-2025.
With regard to inclusion, a modified programme for students with complex needs was
launched in October 2022. The Bureau for the Development of Education prepared guidelines
for developing and implementing a modified curriculum for primary students with complex
needs. The Bureau also developed two training modules for inclusive school teams, and
courses were conducted online. The number of Roma educational mediators increased further
to reach 40, up from 35 in 2021, making their services available to 28 municipalities, up from
26 in 2021. In higher education, authorities granted 135 scholarships to Roma students.
During the reporting period 450 scholarships were granted to children in primary education to
support inclusiveness
On culture and the protection of cultural heritage, a new national strategy for 2023-2027 on
the development of culture needs to be developed by the Ministry of Culture, ensuring also
the appropriate budget allocations. The annual budget allocations for culture have decreased
steadily in the last 3 years. Reforms following the recommendations of the functional analysis
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of the Ministry of Culture and specialised bodies were further delayed. The Ministry of
Culture and other relevant institutions need to strengthen their capacity to create and manage
cultural policies based on sound public administration principles. In September 2023 Skopje
was recommended to become the European Capital of Culture for 2028.
Further efforts are needed to reinforce institutional response and interinstitutional cooperation
to protect cultural heritage and prevent illegal constructions. This includes the protection of
cultural heritage sites of ‘particular importance’, such as lake Ohrid and the Skopje Old
Bazaar. The country’s cultural heritage is not sufficiently safeguarded.
North Macedonia continued to fully participate in the Creative Europe programme's media
and cross-sectoral strands. Authorities amended the national legislation in order to align it
with the 2018 Audio Visual Media Directive, which is a prerequisite for country’s continuous
participation in the programme. The number of beneficiaries of the Creative Europe
programme remains satisfactory.
In the reporting period authorities developed the national youth strategy for 2023-2027,
which is yet to be adopted.
In October 2022, North Macedonia signed the Council of Europe’s Convention on the
Manipulation of Sports Competitions (Macolin Convention), which calls on public
authorities to cooperate with sports organisations, betting operators and competition
organisers to prevent, detect and penalise the manipulation of sports competitions.
With regard to transparency, the State Educational Inspectorate in cooperation with the
Bureau for the Development of Education, is responsible for the implementation of the
national curricula and supervises the implementation of the relevant legislation in all
educational institutions.
Chapter 29: Customs union
All Member States are part of the EU customs union and follow the same customs rules and
procedures. This requires legislative alignment as well as adequate implementing and
enforcement capacity and access to the common computerised customs systems.
North Macedonia has a good level of preparation in this area. Limited progress was made
on consolidation, application and upgrade of IT systems while the Concept of authorised
economic operators (AEO) was further promoted, including through regional cooperation
initiatives among the customs administrations of the WB6 countries. The implementation of
the New Computerised Transit System Phase (NCTS) Phase 5 is facing delays. North
Macedonia has yet to ratify the Protocol on Elimination of Illicit Trade in Tobacco Products.
Last year’s recommendations were partially implemented. In the coming year, the country
should, in particular:
→ implement the New Computerised Transit System Phase 5;
→ continue the consolidation and full application of its IT systems, including alignment
with the Commission's Multiannual Strategic Plan (MASP) modules, ensure their
continuous upgrade, and business continuity;
→ ratify the Protocol on Elimination of Illicit Trade in Tobacco Products.
The customs legislation is highly aligned with the EU acquis. The 2023 customs tariff was
adopted to reflect the latest changes in the EU Combined Nomenclature. The CEFTA
Additional Protocol 5 on trade facilitation was implemented, and the authorised economic
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operators (AEO) concept was further promoted. So far, 27 companies have been AEO-
certified. North Macedonia is yet to ratify the Protocol on Elimination of Illicit Trade in
Tobacco Products, signed in 2014.
On administrative and operational capacity, the standards of professional integrity and
anti-corruption are consistently applied. A comprehensive intelligence system in support of
investigation and enforcement is in place. Risk management is applied systematically with the
percentage of physical controls at 5.9 % and documentary controls accounting for 15.7 % of
all shipments in 2022.
Revenues collected by the Customs Administration increased by 15% compared to 2021,
totalling close to EUR 2 billion. The one-stop control with Serbia was implemented and the
one-stop system was also established at the man border crossing with Albania in August 2023
. The digitalisation of customs procedures continued and a green customs declaration was
introduced, enabling import and export procedures to be completed in one hour, fully
paperless. The 2021-2025 strategy for ICT development, aimed at coordinating the alignment
of national systems with those of the EU, was implemented. The implementation of NCTS
Phase 5 is facing delays. The System for Electronic Exchange of Data (SEED+)_is
operational, ensuring harmonised work of the agencies present at the borders.
The number of seizures doubled compared to the previous year, with 114 seizures in 2022,
including drugs, as well as foreign currency, gold and undeclared excise goods . Cooperation
and exchange of intelligence with the customs agencies from the region and with
international and regional organisations continued.
CLUSTER 4: THE GREEN AGENDA AND SUSTAINABLE CONNECTIVITY
The cluster on Green Agenda and sustainable connectivity covers: transport policy (chapter
14); energy (chapter 15); trans-European networks (chapter 21); and environment and climate
change (chapter 27).
North Macedonia has achieved a good level of preparation in trans-European networks and
some level of preparation on environment and climate change. The country is moderately
prepared on transport and energy policy with some progress made in the area of energy,
particularly on regional gas interconnectors and on renewables. Substantial efforts are needed
in areas where limited progress was achieved, such as transport, trans-European networks and
environment. The country needs to accelerate the implementation of the Economic and
Investment Plan and of the Green Agenda for the Western Balkans in the upcoming period.
Chapter 14: Transport policy
The EU has common rules for technical and safety standards, security, social standards, State
aid and market liberalisation in road transport, railways, inland waterways, combined
transport, aviation and maritime transport.
The country is moderately prepared in the area of transport. Limited progress was made in
the reporting period in all transport modes though there was a partial alignment with the
aviation safety legislation. The sector inspection bodies still lack administrative and
operational capacity. Political commitment is still missing to deliver on necessary rail sectoral
reforms.
As the previous year’s recommendations were not implemented, they remain valid. In the
coming year, North Macedonia should, in particular:
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→ ensure qualified operational and administrative capacity of the inspection bodies and
develop their enforcement capacity to reduce deaths on the road and on rail infrastructure;
→ implement the connectivity reform measures on rail reform and open the rail transport
market, amend national law to remove breaches of provisions of the Transport
Community Treaty on opening up the rail market, and finalise pending border-crossing
agreements/protocols;
→ adopt and implement legislation on intelligent transport systems (ITS).
On the general transport acquis, the key strategic documents for transport and its sub-sectors
are in place. Limited progress has been made in developing the action plan to accompany the
2018-2030 national transport strategy. Preparation of the national ITS strategy has progressed
but it has not yet approved and national laws are still not aligned with the ITS Directive.
The operational and administrative capacity for all modes of transport is still lacking and no
effort has been made to strengthen them. The result of this situation is the ineffective
implementation of the Green Agenda for the Western Balkans. The law on air and railway
accident investigation has still not been fully implemented. The independent rail accident
investigation body has still not been created. Larger cities should develop sustainable urban
mobility plans, which respect environmental and social standards, following best EU
practices. Further efforts are needed to align with the acquis on public passenger transport
services by rail and by road.
Although North Macedonia is actively engaged in the work of the Transport Community,
there was limited progress on the implementation of the Transport Community Treaty action
plan and elements of the smart and sustainable mobility strategy for the Western Balkans.
The legal framework for road transport is broadly aligned with the EU acquis and no
progress was made during the reporting period. The Law on dangerous goods is aligned with
the EU acquis, but there is still no legal entity appointed to conduct a conformity assessment
on the existing equipment for the transport of dangerous goods. The executive body for road
traffic safety has still not been set up as the law has not been adopted. Further efforts are
needed to align with the social and safety acquis. The national accident and investigation
body still needs to be set up. Similarly, no action plans on road safety inspection and audit
have been adopted and implemented. The scope and the quality of the road safety statistics
have been improved though additional steps are required to align fully with the EU acquis.
Enforcement and the technical capacity of the State Transport Inspectorate remain weak.
Penalties for infringing the European agreement on the work of crews of vehicles engaged in
international road transport (AETR) still lack harmonisation. The five-year road maintenance
plan has not been published since 2017; road maintenance is still carried out inefficiently and
needs to be improved. More efforts are needed to align with the EU acquis on road
infrastructure safety management and minimum safety requirements for tunnels in the trans-
European road network. Legislation on clean energy and energy efficient road transport
vehicles is not aligned with the EU acquis.
On rail transport, the main requirements of the EU acquis are met in terms of the
unbundling of the infrastructure manager and the national operator. Further alignment with
large parts of the single European railway area acquis continue to be delayed. The rail market
is yet to be opened at domestic level. Amended railway safety and interoperability legislation
was adopted in 2016, but lacks proper enforcement. Preparations for strengthening the
operational capacity of the Railway Safety Directorate have started. There has been no
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progress in setting up an accident and investigation body. The agreement on cross-border
railway cooperation with Greece is yet to be finalised.
In the area of maritime transport, North Macedonia, as a landlocked country, participates in
all basic transport conventions of the International Maritime Organisation, including the
European Maritime Safety Agency (EMSA).
On inland waterway transport, North Macedonia is aligned with most of the EU acquis, but
not with the Regulation on the recognition of certification and transportation of goods and
passengers. The country does not participate in the EU strategy for the development of the
Danube Region but continues to contribute actively in the International Commission of the
Sava River Basin. More efforts are needed in aligning the legislation with common rules
applicable to the passengers by inland waterway.
In the area of aviation, the country has maintained a good level of alignment with the EU
acquis and has partially aligned with the aviation safety legislation. Further efforts are still
needed to facilitate European Aviation Safety Agency standardisation inspections.
On combined transport, progress was made and technical experts have started work on
setting up a multimodal node near Skopje. The specific legislation is partially aligned with EU
rules. Progress needs to be made on adopting relevant legislation and setting up systems for
electronic freight transport information exchange.
North Macedonia should increase efforts to align with and implement EU passenger rights
legislation.
Chapter 15: Energy
EU energy policy covers energy supply, infrastructure, the internal energy market,
consumers, renewable energy, energy efficiency, nuclear energy and nuclear safety, radiation
protection and nuclear safeguards.
North Macedonia is moderately prepared in the area of energy. Some progress was made
in regional gas interconnectors and on renewable energy, with investments in solar power
plants. As the energy crisis has demonstrated, North Macedonia needs to accelerate its
transition towards green energy and reduce its dependence on gas and coal.
As last year’s recommendations were not fully implemented, in the coming year the country
should, in particular:
→ ensure coherent energy policy, improve governance and institutional capacity in the
energy sector and improve strategic investment programming and accelerate the transition
towards green energy in accordance with the Green Agenda for the Western Balkans and
the national energy strategy, as well as update and implement the national energy and
climate plan-NECP), in line with the 2030 Energy Community climate and energy
targets;
→ adopt and implement the energy efficiency implementing legislation;
→ complete the unbundling (certification) of the gas transmission systems operators and
foster market development and regional market integration;
The government adopted a national energy action plan in December 2022, which includes
measures to mitigate the socio-economic impact of the energy crisis in North Macedonia, as
well as a review of the energy sector's strategic, institutional and legislative framework. The
action plan formed the basis for a policy dialogue on the EU Energy Support Package (of
EUR 80 million).
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The need for a coherent and coordinated energy policy became even more evident with the
energy crises. The government should increase its administrative capacity for dealing with
energy policy, strategic planning and investments in the energy sector.
Concerning security of supply, the energy crises have demonstrated the country's
dependence on coal and the need to accelerate the transition towards green energy. Both
Bitola and Oslomej thermal power plants were operating on coal from limited domestic
resources and imports. The lack of availability of coal for the Bitola thermal power plant still
needs to be urgently addressed, by investment in new renewable resources. The Compulsory
Oil Reserves Agency adopted a 2023-2025 action plan for the formation of mandatory
reserves to release stocks in the case of an emergency. The oil stocks correspond to at least 53
days of average daily consumption.
The construction of a new 400kV electricity transmission interconnector line with Albania is
under way. An electricity day ahead market has been established and the market coupling
with Bulgaria is progressing while the establishment of the intra-day market is still pending.
On gas interconnections, the government has finalised the initial design phase for the
construction of an interconnection line with Greece and has drawn up feasibility studies for a
line to Serbia and to Kosovo.
Concerning the internal energy market, the national framework legislation is in line with
the EU’s third energy package in gas and electricity, and the country's electricity and gas
markets are open for competition. However, the transposition and implementation of the
newly adopted electricity integration package is pending.
The electricity transmission and distribution network operators have been unbundled, in
accordance with the EU acquis. The gas transmission system operator has not yet been
certified as required by the third energy package. Amendments to the Energy Law were
adopted, transposing the Regulation on wholesale energy market integrity and transparency
(REMIT) and the TEN-E regulations.
Third-party access to the natural gas infrastructure is in line with the EU acquis, but
transparency needs to be improved. Works to build the gas transmission pipeline between
Skopje, Tetovo, and Gostivar are progressing. The tendering process for awarding a public-
private partnership for gas distribution system is ongoing.
Wholesale gas prices are fully deregulated; however the market remains illiquid, without a
virtual trading point. All contracts are concluded bilaterally, on a monthly and yearly basis.
The Energy Regulatory Commission is functional and has continued to demonstrate
regulatory independence. The Commission for the Protection of Competition carried out an
investigation concerning the sales of electricity to the universal supply company. The State
Audit Office has conducted several audits in relation to the energy crises and the operators.
The electricity transmission system operator must address the findings of the 2016 and 2023
audit reports and improve their operations.
In the area of hydrocarbons, the Law on mineral resources remains to be aligned with the
Hydrocarbon-Licensing Directive.
On renewable energy, the Renewable Energy Directive (REDI) remains to be transposed.
The amended Energy Law makes the adoption of the national energy climate plan (NECP) a
legal obligation for the country, replacing the renewable energy sources (RES) action plan.
The NECP sets the target for the share of renewable energy sources in gross final
consumption of energy in 2030 at 38%, and the indicative target for 2023 at 26%. The share
of RES in the gross final energy consumption for 2022 was 18.8%. Investments in
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hydropower should be compliant with the relevant environmental acquis. Optimising
balancing services and investments in energy transmission and energy storage should be
promoted to improve the integration of renewable energy sources into the grid. An upgrade of
the grid system is necessary.
The capacity cap per type of renewable energy technology has to be removed to enable the
achievement of the 2025 renewable energy targets. An electronic system for issuing,
transferring and cancelling guarantees of origin is not in place. Electricity prosumers are
supported by the rulebook on renewables, and implementation should be enhanced. The
procedures for the installation of photovoltaics on buildings is complicated and an obstacle to
new investments.
The Government adopted a Just Transition roadmap and a coordination mechanism for
governing and monitoring, in June 2023. The transition towards clean energy should include
measures mitigating the negative social and economic impacts of the planned phase-out of
coal-fired power plants in the concerned regions.
The Law on energy efficiency is aligned with the Directive on energy efficiency and the
Directive on the energy performance of buildings. Following the latest amendments to the
Energy Efficiency Directive, the update of the Law on energy efficiency is under way. The
implementation of the current legislation has not improved. Energy performance certification
requirements for buildings are not applied according to the legislation. The adoption of
implementing legislation remains a challenge due to the limited human and technical capacity
at the Energy Department of the Ministry of Economy and the Energy Efficiency Agency.
The structure of the energy efficiency fund is being set up. Municipalities are encouraged to
take steps to fully respect their obligations to develop and implement energy efficiency
programmes.
For nuclear energy, nuclear safety and radiation protection, North Macedonia has ratified
the relevant international conventions and is a full member of the European Community
Urgent Radiological Information Exchange system (ECURIE). There is still no long-term and
safe radioactive waste storage facility in place. The capacity of the Radiation Safety
Directorate needs to be strengthened.
On nuclear safeguards, upon accession, the existing systems of accountancy and control of
nuclear materials in North Macedonia would need to be adapted to accommodate for the
safeguard provisions (chapter 7) of the Euratom Treaty.
Chapter 21: Trans-European networks
The EU promotes trans-European networks (TENs) in the areas of transport,
telecommunication and energy to strengthen the internal market and contribute to growth and
employment.
North Macedonia has a good level of preparation in the area of trans-European networks.
Limited progress was achieved during the reporting period. However, the required legislative
process was not completed, in particular the action plans to implement the Transport
Community Treaty.
As last year’s recommendations were not fully implemented, they remain valid. In the coming
year, the country should in particular:
→ further strengthen the operational and technical capacity of all management and
stakeholder institutions dealing with the development of both Trans-European Transport
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(TEN-T) and Trans-European Energy (TEN-E) networks, and harmonise the legal
framework with the Trans-European Network Regulation;
→ mobilise sufficient resources to implement the Transport Community Treaty and achieve
the goals and deadlines set out in the action plans;
→ implement the final provisions of the Railway Border-Crossing Protocol with Kosovo and
urgently accelerate progress on completing rail Corridor VIII phase III (Kriva Palanka
border with Bulgaria).
On transport networks, further efforts are needed to achieve the goals and deadlines.
Investments in the sector should be based on feasibility studies conducted in line with EU best
practices, and should apply transparent procurement procedures. The staff retention policy by
bodies involved in large investment projects remains limited, which considerably hampers the
completion of strategic projects.
In May 2023, North Macedonia signed a high-level understanding with the European
Commission updating the TEN-T maps. The amended maps for the new European Western
Balkans Corridor will be part of the revised TEN-T Regulation, which is currently being
discussed by co-legislators. Road Corridor X is functional, but works along Corridor X-d
have accumulated additional delays. Contracts have been signed for the construction of four
highway sections along Corridors VIII and X-d. The construction of the rail Corridor VIII
towards Bulgaria started in November 2022 with two new contractors for phase I and II
respectively, but the preparation of the tender documentation for phase III (Kriva Palanka
border with Bulgaria) has accumulated significant delays. Additional and urgent efforts are
needed to accelerate progress on rail Corridor VIII and other priority sections of the core
network for both rail and road. Amendments to accelerate construction of four highway
sections along Corridors VIII and X-d were adopted in May 2023 by using the ‘EU flag’ fast-
track procedure, although this was not an appropriate use of the procedure. North Macedonia
is expected to respect the obligations stemming from the Stabilisation and Association
Agreement as well as to keep aligning with the EU acquis during the accession negotiation
process.
To date, no agreement has been reached on establishing the Kremenica-Neos Kafkasos
railway border-crossing with Greece. Finalising the mutual border agreement and ensuring
the railway line becomes fully operational are key. Funding to build adequate infrastructure
close to the Serbian border at the Tabanovce railway border station has still not been
completely secured. No progress was made on adopting five-year road and rail maintenance
plans.
On energy networks, the construction of a new 400kV electricity transmission
interconnector line Bitola-Elbasan (Albania), is still under way. Technical assistance to
strengthen the transmission network in the south-eastern region of North Macedonia is
ongoing. Works are also ongoing to build the gas transmission pipeline between Negotino
and Bitola, and Skopje, Tetovo and Gostivar. The development of a natural gas inter-
connector between North Macedonia and Greece, a flagship project in the Economic and
Investment Plan (EIP) for the Western Balkans, is a priority to enable security of gas supply
in North Macedonia and is progressing well.
Chapter 27: Environment and climate change
The EU promotes strong climate action, sustainable development and protection of the
environment. EU law contains provisions addressing climate change, water and air quality,
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waste management, nature protection, industrial pollution, chemicals, noise and civil
protection.
North Macedonia has some level of preparation in this area. Overall, there was limited
progress during the reporting period. In the waste management sector, the first national plan
for waste prevention was adopted. On nature protection, the management plans for Shara
Mountain and Osogovski Mountains were adopted. Implementation in all sectors needs to be
strengthened to keep up with developments in the EU acquis. North Macedonia is encouraged
to take further steps towards the green transition, notably under the Green Agenda for the
Western Balkans.
Last year’s recommendations were partially fulfilled. In the coming year, the country should
in particular:
→ implement concrete measures to reduce air pollution at local and national level and to
reduce point and diffuse pollution of freshwater resources;
→ make operational the regional waste management system in the eastern and north-eastern
regions; implement the Paris Agreement, including by adopting a Climate Law, consistent
with the EU 2030 framework, and by adopting the national adaptation plan.
→ strengthen significanly the administrative and inspection capacities, and implement
structural reforms in all the sectors covered under this Chapter.
Environment
On horizontal legislation, North Macedonia needs to intensify the work to achieve full
alignment with the cornerstone Directives on Environmental Impact Assessment and
Strategic Environmental Assessment. This negatively impacts all other environmental
sectors, infrastructure investments and overall public participation and perception. The Law
on the environment was amended in July 2022 to introduce a ban on the
construction/reconstruction of new installations for heavy and polluting industries less than
five kilometres from a settlement or a nature protected area. The country has not yet aligned
with the Directive on environmental liability and the Directive on environmental crime. The
lack of specialised staff and weak institutional and administrative capacity are undermining
quality control and the performance of environmental impact assessments.
Whilst air pollution remains a major concern in large cities, limited progress was made on air
quality monitoring and no legislative developments on air quality were made during the
reporting period. The automatic monitoring network continued to be maintained and was
upgraded with a new station operating in Ohrid. The cadastres for air emission for Kicevo,
Kocani, Stip, Kavadarci, Gevgelija and Prilep were finalised in 2022 While the ones for
Veles, Tetovo, Gostivar and Struga are still under development. Air quality plans have been
approved for Gostivar Municipality in February 2023 and by the Municipality of Kumanovo
in December 2022.
In the area of waste management, the first (2022-2028) national plan for waste prevention
was adopted in September 2022, setting out regulatory, policy and practical measures to be
taken by various stakeholders across the public and private sectors.
The process for closing non-standard landfills in the eastern regions is ongoing. The use of
plastic bags has decreased by 80% since their ban by end-2021 was introduced. A system set
up by collective operators for the extended producer responsibility (EPR) scheme comprising
public utilities and licenced private operators for the separate collection of plastic, paper and
glass from households and businesses is operational, but capacity is limited. Activities aimed
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at further improving the EPR system have begun. Nevertheless, implementation remains a
significant challenge in the waste management sector.
North Macedonia needs to continue efforts to align national legislation with the EU acquis on
water quality management. In February 2023, the 2023 water management programme was
adopted for the design and construction of new - and maintenance and improvement of
existing - public facilities for water supply and regulation of watercourses. The legal and
policy framework for integrated water management aligning with the water acquis is largely
in place. However, the slow pace of implementation and enforcement is an overwhelming,
systemic weakness. Some progress was made on increasing the very low level of funding.
The contract for the major construction project of the Skopje wastewater treatment plant
(WWTP) was signed in April 2023 and that of the major construction project of the Kichevo
sewerage network was signed in January 2023. To tackle water pollution the Urban
Wastewater Treatment Directive (UWWTD)-related legislation needs to be implemented. No
progress was made on completing the implementing rules and regulations, including on the
designation of areas sensitive to eutrophication.
On nature protection, the process of designating Studenchishko Blato, Matka Canyon, Lake
Ohrid and Belchisko Blato as protected areas has yet to be concluded. The management plans
for Shara Mountain (and the Osogovski Mountains have been adopted and aim to strengthen
the protection of these areas. The Law on nature, designed to align with the requirements of
the EU Habitat and Wild Bird Directives, needs to be adopted. The national funds available
for nature protection have been increased but are still far from sufficient. The lack of
sustainable financing and of administrative capacity to manage protected areas remain a
major challenge.
Activities to identify potential Natura 2000 sites continued throughout the country. Initial
steps were taken to digitalise the system for issuing permits, promoting information exchange
and cooperation to facilitate the implementation of CITES. Progress was made on cross-
border cooperation for the protection of Prespa Lake during meetings of the Prespa Park
Management Committee and the Water Management Working Group.
The implementation of UNESCO recommendations on the natural and cultural heritage of the
Ohrid region remains insufficient. The Secretariat of the Bern Convention carried out a
mission in connection with the open file “Alleged negative impacts on Ohrid Lake and
Galichica National Park - candidates for Emerald areas”, due to infrastructure development.
In July 2023the EU and North Macedonia signed the agreement on the country's participation
in the LIFE programme. Joining the LIFE programme will allow North Macedonia to
participate in the various environmental protection activities, including support for nature and
biodiversity and climate action.
On industrial pollution and risk management, the law on industrial emissions is yet to be
adopted and there have been no developments on integrated permitting. North Macedonia
should align with the Seveso III Directive, the EU Ecolabel Regulation and the EU Eco-
Management and Audit System.
No significant developments have been made in the area of chemicals and of noise pollution
in the reporting period.
On civil protection, the European emergency call number E 112 has been available to
people across the country since February 2022. Furthermore, the fleet of firefighting planes
was serviced and new firefighting equipment was acquired. North Macedonia signed the
revision of the administrative arrangement with the Union Civil Protection Mechanism.
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Despite its longstanding participation in the system, no progress has been made in linking the
national emergency communication system to the European Commission's Common,
Emergency, Communication and Information System (CECIS) or in better defining the role
of the national coordinator for the National Platform on Disaster Risk Reduction. The new
national protection and rescue strategy for 2022-2025 is yet to be adopted. The country needs
to take concrete steps to introduce a mandatory training programme for all territorial, fire and
rescue/civil protection staff.
Climate change
The national energy and climate plan (2021-2030) was adopted in June 2022 but the Law on
climate action is yet to be adopted. The fourth National Communication to the UN
Framework Convention on Climate Change was adopted in February 2023.
CLUSTER 5: RESOURCES, AGRICULTURE AND COHESION
Cluster 5 on resources, agriculture and cohesion covers: agriculture and rural development
(chapter 11); food safety, veterinary and phytosanitary policy (chapter 12); fisheries and
aquaculture (chapter 13); regional policy and coordination of structural instruments (chapter
22); financial and budgetary provisions (chapter 33).
North Macedonia is moderately prepared in most areas of Cluster 5. It has a good level of
preparation in the area of food safety, veterinary and phytosanitary policy and is at an early
stage of preparation in financial and budgetary provisions. Over the reporting period, some
progress was made in agriculture and rural development, fisheries and aquaculture and in
food safety, veterinary and phytosanitary policy. However, further efforts are needed, in
particular in areas where limited or no progress was made, such as regional policy and the
coordination of structural instruments and financial and budgetary provisions.
Chapter 11: Agriculture and rural development
The EU’s common agricultural policy supports farmers and ensures Europe’s food security.
It helps tackle climate change and the sustainable management of national resources;
maintains rural areas and landscapes across the EU; and keeps the rural economy alive by
promoting jobs in farming, agri-food industries and associated sectors. This requires strong
management and control systems. There are also common EU rules for marketing standards,
quality policy and organic farming.
North Macedonia remains moderately prepared in the area of agriculture and rural
development. Some progress was made during the reporting period, notably with the
preparation of the 2021-2027 action plan for the national strategy for agriculture and rural
development, including budgeting for support measures under the 2023-2027 national
programme for the development of agriculture.
Some recommendations from last year’s report were not fully implemented and remain valid.
In the coming year, North Macedonia should in particular:
→ ensure transfer of the farm register and the land parcel identification system (LPIS) to the
paying agency;
→ adopt a legislative framework to further align with the EU acquis on areas such as support
payments, common market organisation and farm advisory services;
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→ improve the administrative capacity in the instrument for pre-accession assistance for
rural development (IPARD) operating structures to ensure robust implementation of the
IPARD III programme.
On horizontal issues, an action plan for the 2021-2027 national strategy for agriculture and
rural development (NSARD) was prepared. Its alignment with the action plan on the Green
Agenda for the Western Balkans needs to be ensured. The financing of the NSARD has been
budgeted under the 2023-2027 national programme for the development agriculture and rural
development and nearly 80% of the funds are allocated to direct support measures. North
Macedonia continued a policy of complex coupled schemes of direct support to farmers. A
new e-application system for direct support has simplified the application process and control
system. The new Law for agriculture and rural development has been prepared. North
Macedonia needs to align its national support measures to the EU acquis. Solutions for long-
term staffing and for the premises of the paying agency, remain to be found.
All elements of the integrated administration and control system (IACS) are in place and
comply with the EU acquis. However, data transfers and the inter-operability of the various
elements need to be improved. The area-based payments continue to be determined based on
the land parcel identification system (LPIS). New orthophoto maps are to be acquired and
updates to the LPIS completed in 2023. The legislative framework for transferring the
farmers’ register and LPIS to the Paying Agency is still pending. On the farm accountancy
data network (FADN), a new plan for selecting representative agricultural holdings has been
prepared ensuring the expansion of the sample for data collection. Additional human and
financial resources are essential to ensure the sustainability of the FADN system. Efforts are
underway to develop the farm advisory services in line with the EU acquis.
Little progress was made on further aligning with the common market organisation
(CMO). Legislation in this area remains to be adopted. Development of a school schemes for
fruit and vegetables continued in 2023.
On rural development, good progress was made in absorbing EU funds under IPARD II. By
the end of 2022, payments to recipients reached around EUR 42 million. It is critical that the
IPARD authorities improve the disbursement of funds in 2023 to avoid the decommitment of
the remaining IPARD II funds and to support the thorough implementation of the IPARD III
funds for which entrustment was granted by the European Commission Overall, the capacity
and staff retention of the IPARD authorities needs to be strengthened. No significant progress
has been made in aligning national rural development policy with the EU acquis.
On quality policy, progress in implementing quality schemes has been limited but 2023 saw
some developments in the registration process for a number of products. The legislative
framework, including on spirit drinks remains to be fully aligned with the EU acquis.
Administrative capacity remains insufficient, despite the sector's potential.
As regards organic farming, the legislation, competent authority, control bodies, and
accreditation and certification system are in place. A new law on organics further aligning
with EU acquis remains to be adopted and actions to enhance the monitoring and control of
organic certification and traceability of organic products can be intensified. Efforts should be
made to further develop the sector, making use of the support available under the IPARD III
programme.
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Chapter 12: Food safety, veterinary and phytosanitary policy
EU hygiene rules for foodstuff production ensure a high level of food safety. Animal health
and welfare and the safety of food of animal origin are safeguarded together with quality of
seeds, plant protection material, protection against harmful organisms and animal nutrition.
North Macedonia has a good level of preparation in the areas of food safety, and veterinary
and phytosanitary policy. Some progress was made over the reporting period, particularly in
fighting animal diseases, plant health control and implementing pest eradication measures
based on phytosanitary monitoring programmes results.
The Commission’s recommendations from last year were not met and therefore remain valid.
In the coming year, North Macedonia should in particular:
→ adopt the draft laws on food safety, official controls and the new Law on animal health;
→ strengthen capacity for data analysis in the Food Veterinary Agency;
→ implement measures on the sustainable use of pesticides.
On general food safety, amendments to the Law on food safety and a new Law on official
controls have been prepared but are yet to be adopted. The national rapid alert system for
food and feed and the Food and Veterinary Agency’s internal audit and training systems
continued to operate efficiently. The Agency continued to perform its work in line with
quality management standards and 566 consumer complaints were received and resolved in
2022.
On veterinary policy, a new Law on animal health, aimed at aligning with the new EU
animal health legislation, is yet to be adopted. The Food and Veterinary Agency provides
regular updates on safeguard measures for imports and import requirements for live animals
and animal products.
Progress was made on control measures for animal diseases. The Agency has an active and
passive surveillance programme in place for various diseases, but the collection, verification
and analysis of data remains insufficient. The Agency continued implementing the
monitoring programme on antimicrobial resistance. The 2023 national monitoring
programme on control of residues of veterinary medicinal products and contaminants in live
animals and foodstuffs of animal origin is in line with the EU acquis on bovine,
ovine/caprine, porcine, poultry, aquaculture, milk, eggs, wild game and honey. The new
Law on zoo-technics was adopted in April 2023. The capacity to align with and implement
the EU acquis on zoo-technical issues remains to be improved.
Some progress was made in the placing of food, feed and animal by-products on the
market with the adoption of implementing legislation, aiming at aligning with the EU
acquis. The revised law on animal by-products has been adopted.
Some progress was also made on food safety rules. The legislation was amended in
December 2022 to align with the EU acquis on specific requirements for microbiological
criteria for food. The Agency continued implementing a programme to monitor food safety,
but the data is to be further analysed.
Regarding specific rules for feed, the legislation was aligned with EU requirements for
processed proteins, and with procedures for sampling and laboratory testing. The Agency
continued to implement a programme to monitor feed safety and the Agency collected 90%
of the 500 planned feed samples.
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Some progress was made on phytosanitary policy. The Phytosanitary Directorate regularly
updated the list of harmful organisms in line with the new EU acquis and the country’s pest
status. The phytosanitary monitoring programme for plant health was implemented, and the
phytosanitary information system further developed. The Law on phyto-pharmacy is aligned
with the EU acquis. However, measures on the sustainable use of pesticides have not been
implemented. Substantial work is still necessary to collect reliable data on national pesticides
use and its impact on human health. The phytosanitary inspection body continued to
implement measures to eradicate pests identified through monitoring and control
programmes.
The Law on genetically modified organisms was aligned with the EU acquis.
Chapter 13: Fisheries and aquaculture
The common fisheries policy lays down rules on fisheries management, protects living
resources of the sea and limits the environmental impact of fisheries. This includes setting
catch quotas, managing fleet capacity, rules on control and inspection, rules on markets and
aquaculture and support for fisheries and coastal communities. Further, it promotes a
sustainable aquaculture.
North Macedonia is moderately prepared in the area of fisheries and aquaculture. In the
reporting period, some progress was made in aligning marketing standards, structural
measures and State aid with the EU acquis.
Some recommendations from last year’s report were not fully implemented. In the coming
year, North Macedonia should in particular:
→ adopt the Law on fisheries and aquaculture and the implementing legislation on
marketing standards, consumer information, traceability and producer’s organisations as
well as a national strategy on aquaculture;
→ improve the data collection system and reporting, such as establishing a data framework
for collection of fisheries and aquaculture data, integration of all data sources and
analysis;
→ establish a multi-annual programming of structural measures.
As North Macedonia only has inland fishing in lakes and aquaculture, a large part of the EU
acquis on fisheries is not applicable. Progress was made in aligning the national legal
framework with the preparation of a new Law on fisheries and aquaculture. A new law on
fisheries and aquaculture including relevant EU provisions on marketing standards, structural
support and state aid, is yet to be adopted. The adoption of a multi-annual national strategy
dedicated to aquaculture is pending.
The institutional framework for fisheries policy, inspections and control has been set up, but
administrative capacity for resource and fleet management, and inspections and control
remains insufficient although the acquis on catch quotas, inspection and control is only
partially applicable due to lack of a coastline in the country. The Fisheries and Aquaculture
Unit in the Ministry for Agriculture is understaffed. Some progress was made on capacity
building, with intensive training courses organised. However, human resources for fisheries
management and the control of IUU fishing need to be further improved in line with EU
requirements.
North Macedonia should carry out activities to raise the public's awareness about illegal,
unreported and unregulated fishing and its legal consequences. Specific attention should be
given to preventing the illegal fishing of protected species and European eel.
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The annual budget for structural measures is insufficient for developing aquaculture and
restoring fish stocks. The government should increase structural support and prepare a
multiannual financial and policy programme to address the sector's needs. The data collection
system for fisheries and aquaculture needs to be further developed in line with the EU acquis.
Interinstitutional coordination with the environment authorities needs to improve.
Alignment of the Market policy, structural support and State aid as well as alignment
with the EU Eel Regulation is still outstanding due to the pending adoption of the new Law
on fisheries and aquaculture.
No cooperation meetings on the international agreements for fisheries management of the
transboundary lakes took place in 2022. Greece and North Macedonia applied a regular
synchronised fishing ban at the Dojran lake each year. Cooperation meetings with Albania for
the management of Ohrid lake fish stocks were held in June 2023.
Chapter 22: Regional policy and coordination of structural instruments
Regional policy is the EU’s main tool for reducing regional disparities and investing in
sustainable and inclusive socio-economic growth. It is operating through “shared
management” between the Commission and EU Member States. The implementation of
cohesion policy programmes requires appropriate administrative capacity on programme
and project level, the establisment of systems of sound financial management and control and
also the fulfilment of other EU acquis elements such as environmental or public procurement
legislation.
North Macedonia is moderately prepared in the area of regional policy and coordination of
structural instruments. No progress was made over the reporting period.
Therefore, last year’s recommendations remain valid. In the coming year, the country should:
→ upgrade its institutional, administrative and technical capacity to manage EU funds by
adopting an overall staff retention policy, strengthening capacities, improving the
implementation of EU and audit recommendations, aligning management and control
systems with the Instrument for Pre-Accession Assistance (IPA) III requirements;
→ strengthen investment policy as a matter of urgency by streamlining investment pipelines
underpinned by sound, transparent and inclusive methodology, clear responsibilities of
the stakeholders and a viable public-private partnership framework;
→ enhance the decentralisation process through a credible financing framework for
municipalities and strengthen policy dialogue on regional development.
No progress was made on the legislative framework, but basic principles remain broadly in
line with EU acquis on public procurement, public finance management, regional and
municipal development, equal opportunities and non-discrimination, environmental
protection, transport connectivity and energy transition. The strategic framework was
strengthened with the adoption of new strategies on public procurement and gender equality,
and the national energy action plan. No significant progress was made on the decentralisation
of services and reorganisation of competencies between the central and the subnational level.
The institutional framework for the management of EU funds under IPA III is being further
aligned with IPA III requirements in view of its future role in EU cohesion policy. However,
the performance of the existing and new institutional set-up for multiannual operational
programmes is jeopardised by weak administrative capacity.
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Weaknesses persist in the administrative capacity of key institutions managing EU funds.
The lack of a national staff retention policy, shortcomings in human resources management
and exceptionally high staff turnover across the IPA structures remain key concerns. Overall,
the structures managing EU funds operated last year with 79% of the optimal staff levels and
with key managerial positions vacant. Progress with the IPA training centre was modest,
taking the form of new furniture, IT and media equipment. Training plans were developed
and effective training of new IPA practitioners began. However, the training centre is
understaffed and a roster of trainers has not been established. North Macedonia needs to
implement the government's August 2022 decision on setting up a roster of trainers and
developing a training methodology effectively.
The financial management and control systems are functioning, but are under pressure due
to staffing challenges. This continued to negatively affect actions under indirect management
by the beneficiary country. At the end of 2022, EU funds for a total of EUR 24.8 million
were decommitted under the IPA II multiannual programme for environment and transport
(2014-2020), while the risk of further substantial decommitment remains high. To address the
critical shortcomings and to be able to operate in an ex-post control environment, North
Macedonia has stepped up the reorganisation of the financial and control systems for the new
operational programmes under IPA III. Further efforts are needed to address the EU and audit
recommendations on staff management and retention policy, procurement and contract
planning, internal audit function and quality assurance.
The Financial Framework Partnership Agreement on the implementation of IPA III entered
into force. The programming of IPA 2022 and IPA 2023 was completed and advances were
made in the programming of IPA 2024 and operational programmes for 2024-2027. The
sector policy dialogue, which supports strategic planning and programming, weakened in the
last year as reflected by the infrequent meetings of the sector working groups.
North Macedonia continues to gain experience in regional policy and territorial cooperation
programming and implementation through its participation in cross-border, transnational, and
interregional cooperation programmes, including the EU Strategy for the Adriatic Ionian
region.
On monitoring and evaluation, North Macedonia actively participates in the IPA and sector
monitoring committees, however only 30% of the jointly-agreed conclusions have been
implemented. The lack of political steer, the weak interinstitutional coordination and the
weak central reporting and monitoring function of the office of the national IPA coordinator
negatively affects the timeliness and quality of IPA reports.
Internal and external audit functions are in place. However, internal audit needs to be
strengthened to better support the functioning of the management and control systems. The
delay in adopting the new Law on public internal financial control is concerning. The Audit
Authority continues to perform well and follows sound audit methodology with good audit
coverage. The new 2023-2025 audit strategy was adopted in November 2022. However, the
operational and technical capacity of the Audit Authority is undermined by staffing
challenges. The implementation of the audit findings by the auditees remains very low. Out
of 96 findings from previous audits, 23 were closed in 2022, representing an implementation
rate of 24%, which is a serious concern.
As regards anti-corruption, in line with the new Organic Budget Law, in December 2022, the
government adopted the decree on setting up the anti-fraud coordination service (AFCOS)
network, which is the backbone of the system for protecting EU’s financial interests in North
Macedonia. The AFCOS network is now fully operational. In addition, the institutions
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managing EU funds implement a financial management and control system accredited by the
Commission, which is under the scrutiny of an external audit body and Commission services.
Chapter 33: Financial and budgetary provisions
This chapter covers the rules governing the funding of the EU budget (‘own resources’).
These resources mainly consist of: (i) contributions based on the gross national income of
each Member State; (ii) customs duties; (iii) the non-recycled plastic resource and (iv) a
resource based on value-added tax. Member States must have the appropriate administrative
capacity to adequately coordinate and ensure the correct calculation, collection, payment
and control of own resources.
The country is at an early stage of preparation in this chapter. Limited progress was made
during the reporting period. North Macedonia reports national accounts data according to the
ESA 2010 (European System of Accounts) methodology, however further improvements
regarding the complete and timely transmission of annual national accounts are needed. The
institutional set-up for the efficient functioning of the own resources system is yet to be
established.
Since the recommendations from last year’s report were not fully implemented, in the coming
year, the country should:
→ further improve the legal basis for the own resources system in the areas of taxation
(VAT), customs union, financial control and statistics;
→ strengthen administrative capacity and coordination mechanisms among key stakeholders
in the own resources system.
North Macedonia made limited progress on the administrative conditions for own resources
laid down in the relevant Regulations, on reducing the administrative burden for taxpayers
and on the VAT refund process. Measures to fight and reduce tax evasion, fraud and the
informal economy, as well as to improve internal control in public sector are yet to be
efficiently applied. North Macedonia continued its efforts to align its legislation with ESA
2010 standards but further efforts are needed to improve compliance with the ESA 2010
methodology. All customs declarations and excise documents are processed electronically
and progress continued in the reporting period on consolidation, application and upgrade of
IT systems (for further information, see chapter 16 - taxation, chapter 18 - statistics, chapter
29 - customs union and chapter 32 - financial control).
On traditional own resources, progress was made on consolidation, application and
upgrading IT systems. The Customs Administration is fully paperless, processing customs
declarations and excise documents electronically. The digitalisation of customs procedures
continued with the introduction of a 'green' customs declaration, with import and export
procedures being completed in 1 hour.
Concerning VAT, the 2021-2025 tax system reform strategy is still ongoing. In April 2023,
the Public Revenue Office published the strategic plan for 2023-2025. On indirect taxation,
the VAT exemptions and preferential rates for essential products were removed at the end of
2022. A preferential VAT rate was introduced for some energy products to alleviate the
effects of the significant global increase in energy prices. The preferential VAT rate for
electricity for households ceased to be applied on 30 June 2023. Delays remain in the VAT
refund process. (See chapter 16 - taxation).
With regard to the administrative infrastructure, further efforts are needed to ensure the
timely and efficient calculation, collection, payment and control of own resources as well as
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to improve reporting and coordination mechanisms among all bodies involved. This is needed
upon accession to the EU.
CLUSTER 6: EXTERNAL RELATIONS
Cluster 6 covers external relations (chapter 30) and foreign, security and defence policy
(chapter 31).
North Macedonia is moderately prepared in the area of external relations and has reached a
good level of preparation on the common foreign and security policy. The country made
some progress during the reporting period on common commercial policy. It has made good
progress by maintaining full alignment with EU common foreign and security policy. By
doing so, North Macedonia has shown itself to be a reliable partner, including at international
level.
Chapter 30: External relations
The EU has a common commercial policy towards third countries, based on multilateral and
bilateral agreements, and autonomous measures. There are also EU rules in the field of
humanitarian aid and development policy.
North Macedonia is moderately prepared in the area of external relations and made some
progress in the reporting period. The country continued to cooperate closely with the EU,
including within the World Trade Organization (WTO), and to implement CEFTA protocols.
Trade restrictions on certain products were removed or expired by the end of 2022. Its
institutional capacity to fully participate in EU commercial, development and humanitarian
policies is still insufficient. Last year’s recommendations were partially implemented. In the
coming year, the country should in particular:
→ further implement CEFTA Additional Protocol 6 on trade in services, and conclude and
adopt Additional Protocol 7 on dispute settlement;
→ set up a legal framework covering international cooperation and development policy and
humanitarian aid towards non-EU countries in line with EU policies and principles.
On common commercial policy, North Macedonia continued to coordinate its positions and
align its policies with those of the EU, including within the WTO, and is supporting the WTO
reform. The country completed the certification process for the Services Domestic Regulation
in the WTO framework. The provisions of the Trade Facilitation Agreement are fully applied
and the National Committee on Trade Facilitation met twice in 2022. On 7 June 2023 the
WTO Government Procurement Agreement (GPA) members decided to accept North
Macedonia to the GPA.
The administrative capacity of the Ministry of Economy, the Ministry in charge of trade
policy, should be further strengthened. Quantitative restrictions on the export of certain
products, introduced in March 2022, were either removed or expired by the end of 2022.
North Macedonia continued to participate actively in CEFTA and has committed to
implement the 2021-2024 Common Regional Market (CRM). Three agreements related to
CRM implementation - freedom of movement with identity cards, recognition of professional
qualifications and recognition of academic qualifications - were ratified by the Parliament in
April 2023. The implementation of Additional Protocol 6 on services is under way.
The system for export control of dual-use goods and technologies is operational. In June
2023, the government adopted an updated list of dual-use products in order to align with the
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EU Regulation on control of exports, transfer, brokering and transit of dual-use goods and
technologies.
North Macedonia has 38 bilateral investment treaties with third countries (BITs) in force,
of which 18 are with EU Member States. The country is updating the existing model
agreement for BITs. The amended free trade agreement between North Macedonia and
Ukraine was ratified in April 2023, further liberalising trade in food and agricultural
products.
No progress was made on development policy and humanitarian aid. The country is
encouraged to set up a policy framework on development, international cooperation and
humanitarian aid, in line with EU policies and standards.
Chapter 31: Foreign, security and defence policy
Member States must be able to conduct political dialogues in the framework of foreign,
security and defence policy, align with EU statements, take part in EU action, and apply
agreed sanctions and restrictive measures.
North Macedonia has a good level of preparation in the area of common foreign, security
and defence policy. Good progress was made during the reporting period, as the country
maintained full alignment with EU common foreign and security policy, including with the
EU restrictive measures following Russia’s war of aggression against Ukraine. North
Macedonia continued to participate in EU crisis management missions and operations under
the common security and defence policy.
In the coming year, the country should in particular:
→ maintain full alignment with EU common foreign and security policy.
→ make further efforts to close space for foreign interference and information manipulation,
including disinformation, and take actions towards building societal resilience against it
and other forms of hybrid threats.
Political dialogue on foreign and security policy continued between North Macedonia and
the EU, including through regular dialogues on foreign and security policy at all levels. In
April 2023, North Macedonia participated in the ninth EU-Western Balkans meeting of
Political Directors. In March 2023, North Macedonia participated at ministerial level at the
first Schuman Security and Defence Forum and in May 2023 in the working lunch with
members of the Foreign Affairs Council. The institutional framework enabling the country’s
participation in the common foreign and security policy and the common security and
defence policy is in place. The country subscribes to the global strategy for EU’s foreign and
security policy and the Strategic Compass for Security and Defence.
On common foreign and security policy (CFSP), the country’s alignment rate with relevant
High Representative statements on behalf of the EU and relevant Council Decisions has
remained at 100%. This included all EU restrictive measures targeting following Russia’s
war of aggression against Ukraine. This is a strong signal of the country’s strategic
commitment to its EU path. North Macedonia also aligned with all EU statements submitted
at international organisations, including co-sponsoring the resolution adopted at the UN
General Assembly Emergency Special Session on Ukraine on 23 February 2023. The country
continues to implement the EU restrictive measures, with the Law on restrictive measures
providing the legal framework for introducing and monitoring the restrictive measures,
including economic ones. The authorities should continue to strengthen their capacity to
implement and enforce the sanctions in place. As there is no direct legal effect of aligning
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with EU restrictive measures, a new legal act must be adopted by government decision for
every new measure or amendment, creating a time gap between alignment and
implementation.
Reflecting the strained relations with Russia, the visa agreement between the two countries
was terminated taking effect in January 2023 and the license to work of the Honorary Consul
of Russia in Bitola was withdrawn.
North Macedonia maintains a bilateral immunity agreement with the United States, granting
US citizens exemptions from the jurisdiction of the International Criminal Court. In doing
so, the country does not comply with the EU common positions on the integrity of the Rome
Statute or with the related EU guiding principles on bilateral immunity agreements.
Alignment with the EU position is needed.
On conflict prevention, North Macedonia took over as OSCE Chair in January 2023 for the
duration of one year. In his capacity as OSCE Chairperson-in-Office, the Minister of Foreign
Affairs of North Macedonia visited Georgia, Azerbaijan and Armenia in April 2023 and
Serbia and Kosovo in May 2023. In March 2023, North Macedonia provided a venue for a
High-level Dialogue meeting in Ohrid between the President of Serbia and the Prime
Minister of Kosovo, convened by HRVP Borrell. North Macedonia continued supporting EU
measures and documents on conflict prevention.
On non-proliferation, North Macedonia continued to implement the 2018 regional roadmap
for a sustainable solution to the illegal possession, misuse and trafficking of small arms and
light weapons and their ammunition in the Western Balkans, and adopted a 2022-2024
national strategy and action plan for the control of small arms and light weapons in October
2022.
North Macedonia participates in some, but not all, international export control arrangements
and instruments. It participates in the Proliferation Security Initiative and the Hague Code of
Conduct. The country is committed to meeting the requirements to join the Wassenaar
Arrangement. The Law on the prohibition of the development, production, storage and use of
chemical weapons implements the obligations of the Chemicals Weapons Convention and
provides for the establishment of the cross-sector Committee charged with its administrative
implementation.
North Macedonia continued its active cooperation with international organisations. Its
priorities in the UN are in line with important EU priorities, including on security, protection
of human rights and the climate, countering violent extremism, implementing the resolution
on women, peace and security, promoting the role and participation of women and
strengthening the role of youth. The second national action plan on the implementation of
UNSC 1325 is monitored by a working group which published its second report in April
2023. In January 2023, the country assumed the position of Chair of the Organisation for
Security and Co-operation in Europe (OSCE) with a focus on human security. Since then, it
has been actively promoting European standards and values and seeking to meet the threats
arising from Russia’s war of aggression against Ukraine. In 2023, North Macedonia assumed
the chairmanship of the US-Adriatic Charter. In March 2023, Albania, North Macedonia,
Kosovo and Montenegro launched the informal ‘Western Balkan QUAD – 100% alignment
with EU CFSP’ a platform aimed at facilitating their full alignment with the EU’s CFSP.
On security measures, the Law on classified information, based on the 2013 Council
Decision, is in force. Implementing legislation is in place on the inspection and supervision of
work involving classified information and on personnel security. North Macedonia continued
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to implement its security of information agreement with the EU on procedures regarding
exchange of classified information.
Regarding the common security and defence policy (CSDP), the country continued to
actively participate and contribute substantially to EU crisis management operations, notably
EUFOR ALTHEA in Bosnia and Herzegovina. North Macedonia participates in the military
training mission in the Central African Republic (EUTM RCA) and in the EU Battle Group
HELBROC BG with one platoon. North Macedonia takes part in the EPF Balkan Medical
Task Force assistance measure. North Macedonia participated in the Dynamic Employment
of Forces to Europe for NATO Deterrence and Enhanced Readiness 2023 Exercise and
maintained a presence in NATO-led missions ‘KFOR’ in Kosovo, NATO Mission Iraq
(NMI) and in the Enhanced Forward Presence in the Baltic (eFP). The country continues to
participate in the UN Interim Force in Lebanon operation with three army personnel. During
the reporting period, North Macedonia provided significant military equipment to Ukraine.
North Macedonia takes part in the European Peace Facility Balkan Medical Task Force
assistance measure and is a beneficiary of an assistance measure for the army of North
Macedonia.
The country has begun the procedure to join the European Centre of Excellence for
Countering Hybrid Threats, located in Helsinki. The country was the target of a sustained
campaign of hoax bomb threats to schools and critical infrastructure for 5 months starting in
October 2022. The authorities classified these events as a hybrid threats. As a result of the
attacks, the Council for the Coordination of the Security-Intelligence Community set up an
operational team for cybersecurity and hybrid threats, which is managed by the Public
Security Bureau of the Ministry of Interior. North Macedonia completed the EU’s hybrid risk
survey with the objective of identifying systemic vulnerabilities and streamlining the
assistance provided by the EU in this field.
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ANNEX I – RELATIONS BETWEEN THE EU AND NORTH MACEDONIA
North Macedonia is a candidate country since 2005. On 26 March 2020, the European
Council endorsed the Council’s decision to open accession negotiations with North
Macedonia. The first Intergovernmental Conference took place on 19 July 2022, following
the approval by the Council of the negotiating framework. The Commission launched the
screening process on the same day.
North Macedonia has been participating in the Stabilisation and Association process since
1999. The Stabilisation and Association Agreement (SAA) with the EU, signed in 2001 and
in force since 2004, sets the framework for relations with the EU, including political,
economic and technical dialogues. Experts met in seven sub-committees and one special
group, according to schedule. The Stabilisation and Association Council took place in March
2023 in Skopje.
Visa liberalisation for citizens of North Macedonia travelling to the Schengen area has been
in force since December 2009. A readmission agreement has been in force since 2008. The
Commission’s fifth report under the visa suspension mechanism concluded that North
Macedonia continues to meet the visa liberalisation benchmarks.
North Macedonia has maintained its full alignment with EU common foreign and security
policy over the reporting period. Substantial participation in EU crisis management missions
and operations continued.
Under the Instrument for Pre-accession Assistance 2021 – 2027 (IPA III)17, the first
financing decision of EUR 90.45 million, adopted at the end of 2021, provides support for
EU acession and post-COVID-19 recovery and enhancing the country’s reforms in the areas
of rule of law, fight against corruption and organised crime, protection of environment,
sustainable economic development and facilitating trade with the EU. The second financing
decision of EUR 72.5 million was adopted at the end of 2022, providing support for the
country’s reforms in the areas of border and migration management, public administration,
environment, health, social protection and gender equality and to back-up the EU accession
process. At the EU-WB Summit in Tirana in December 2022, the Commission put forward an
Energy Support Package of EUR 1 billion for the Western Balkans to address immediate,
short-term, and medium-term needs in the region in the context of the energy crisis and of the
Russian war of aggression against Ukraine. Following this announcement, a EUR 80 million
budget support programme for North Macedonia was adopted at the end of 2022 to cushion
the energy price increase to SMEs and vulnerable households and to accelerate the energy
diversification.
These programmes, complemented by a significant package of multi-country programmes
and the EUR 97 million rural development programme (IPARD III), provide a significant
contribution to the implementation of the Economic and Investment Plan for the Western
Balkans and the Green Agenda. North Macedonia benefits from complementary support for
civil society and migration management. North Macedonia participates also in cross-border
cooperation programmes, transnational cooperation programmes and Union Programmes.
The new activities complement the on-going programmes under IPA II (2014-2020).
Progress was achieved on the implementation of IPA II, which is still providing significant
support for the social and economic development of the country and contribute to key
17
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structural reforms. On the fundamentals, the ongoing EU assistance continued to back up the
reforms in the areas of rule of law, public administration and public finance and advanced the
fight against corruption. With EU assistance, the reorganisation of state institutions at central
level was launched and the digital transformation of the country advanced, with 230 fully
automated public e-services for citizens and businesses put in place. The EU-supported
Youth Guarantee benefitted over 9 400 young people in the regions facing the highest youth
unemployment and schooling was improved for Roma children and children with disabilities.
Significant EU financial assistance has been allocated to North Macedonia for protecting the
environment and boosting the connectivity with the EU transport systems, including State
Road A2 Kumanovo-Stracin (Corridor VIII) and the new expressway section Gradsko-
Drenovo (Corridor X). Media, civil society and private sector continue to benefit of important
EU assistance providing opportunities to grow and develop in a favourable environment. The
EU support for the private sector benefitted over 5 000 companies, created over 1 300 new
jobs and secured over 15 000 jobs in risk, 70% of which in eco-friendly business.
The Western Balkans Investment Framework (WBIF) has supported North Macedonia in
the amount of EUR 296.7 million provided as IPA III grants for flagship projects in the area
of clean energy, environment and climate, and sustainable transport.
On 12 July 2023, in view of the country’s large financing needs in 2023 and 2024, and
following a request from the government, the Council and the European Parliament endorsed
a Commission proposal for macro-financial assistance to North Macedonia of up to
EUR 100 million. Payments can follow, provided conditions attached to this assistance have
been adequately respected.
The Council of the European Union adopted an assistance measure under the European
Peace Facility worth EUR 9 million to the benefit of the army of North Macedonia, which
will help its capacity to maintain and enhance operating standards to participate in EU
military CSDP missions. The proposed support will include logistics, medical equipment,
communication and information systems, intelligence capacities, chemical, biological,
radiological and nuclear (CBRN), engineering and training equipment.
The EU provides support via IPA and the Foreign Policy Instrument to strengthen Western
Balkans partners’ resilience to face hybrid threats including cyber and foreign information
manipulation and interference.
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STATISTICAL DATA (as of 31/08/2023)
North Macedonia
Basic data Note 2010 2017 2018 2019 2020 2021
Population (thousand) 2 053 s 2 074 s 2 075 s 2 077 s 2 076 s 2 069 s
Total area of the country (km²) 1) 25 436 w 25 436 w 25 436 w 25 436 w 25 436 w 25 436 w
National accounts Note 2010 2017 2018 2019 2020 2021
Gross domestic product (GDP) (million national currency) 437 296 618 106 660 878 692 683 669 280 720 414 p
Gross domestic product (GDP) (million euro) 7 108 10 038 10 744 11 262 10 852 11 688 p
GDP (euro per capita) 3 460 e 4 840 e 5 170 e 5 420 e 5 240 e 5 672 sw
GDP per capita (in purchasing power standards (PPS)) 8 597 e 10 787 e 11 389 e 11 881 e 11 349 e :
GDP per capita (in PPS), relative to the EU average (EU-27 = 100) 34.5 36.8 37.6 38.0 37.8 :
Real GDP growth rate: change on previous year of GDP volume (%) 3.4 1.1 2.9 3.9 - 4.7 3.9 p
Employment growth (national accounts data), relative to the previous year (%) - 4 3 0 2 - 7 :
Labour productivity growth: growth in GDP (in volume) per person employed, relative to the
previous year (%)
7 - 2 3 2 2 :
Unit labour cost growth, relative to the previous year (%) : : : : : :
**3 year change (T/T-3) in the nominal unit labour cost growth index (2015 = 100) : : : : : :
Labour productivity per person employed: GDP (in PPS) per person employed relative to EU
average (EU-27 = 100)
46 43 45 44 47 :
Gross value added by main sectors
Agriculture, forestry and fisheries (%) 11.7 9.1 9.8 9.4 9.8 8.4 p
Industry (%) 17.9 20.5 21.5 20.8 19.8 19.6 p
Construction (%) 6.5 7.5 6.2 6.5 6.0 6.3 p
Services (%) 63.9 s 62.9 s 62.6 s 63.4 s 64.3 s 65.8 ps
Final consumption expenditure, as a share of GDP (%) 93.8 81.6 80.1 79.5 82.8 83.7 p
Gross fixed capital formation, as a share of GDP (%) 23.1 22.5 20.0 21.0 21.6 22.5 p
Changes in inventories, as a share of GDP (%) 1.3 9.7 12.2 13.2 8.3 9.7 p
Exports of goods and services, relative to GDP (%) 39.8 55.1 60.4 62.4 57.8 66.2 p
Imports of goods and services, relative to GDP (%) 58.1 69.0 72.8 76.2 70.5 82.3 p
Gross fixed capital formation by the general government sector, as a percentage of GDP (%) : : : : : :
Business Note 2010 2017 2018 2019 2020 2021
Industrial production volume index (2015 = 100) 84.7 103.6 109.2 113.2 102.4 103.9
Number of active enterprises (number) 56 740 w 55 359 w 58 231 w 58 765 w 58 570 w 59 122 pw
Birth rate: number of enterprise births in the reference period (t) divided by the number of
enterprises active in t (%)
16.1 w 9.2 8.4 b 8.5 8.0 :
Death rate: number of enterprise deaths in the reference period (t) divided by the number of
enterprises active in t (%)
12.9 7.7 7.6 b 8.4 p 7.3 p :
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People employed in SMEs as a share of all persons employed (within the non-financial
business economy) (%)
77.8 sw 74.3 sw 74.1 sw 73.7 sw 73.9 sw 75.0 psw
Value added by SMEs (in the non-financial business economy) (EUR million) 2 399 sw 2 698 sw 2 895 sw 3 215 s 3 154 sw 3 528 psw
Total value added (in the non-financial business economy) (EUR million) 3 641 w 4 252 4 579 4 878 4 643 w 5 089 pw
Inflation rate and house prices Note 2010 2017 2018 2019 2020 2021
Consumer price index (CPI), change relative to the previous year (%) 1.1 d 2.1 d 2.3 d 0.7 d 1.2 d 3.4 d
**Annual change in the deflated house price index (2015 = 100) : : : : : :
Balance of payments Note 2010 2017 2018 2019 2020 2021
Balance of payments: current account total (million euro) : - 78.3 22.4 - 334.7 - 318.0 - 366.4
Balance of payments current account: trade balance (million euro) : - 1 787.3 - 1 736.2 - 1 948.8 - 1 803.6 - 2 370.3
Balance of payments current account: net services (million euro) : 374.7 370.9 335.7 423.7 495.9
Balance of payments current account: net balance for primary income (million euro) : - 397.5 - 450.7 - 519.6 - 411.5 - 521.3
Balance of payments current account: net balance for secondary income (million euro) : 1 731.8 1 838.4 1 798.0 1 473.4 2 029.4
Net balance for primary and secondary income: of which government transfers (million euro) : 112.8 109.1 43.2 110.0 138.5
**3 year backward moving average of the current account balance relative to GDP (%) : - 1.7 - 1.1 - 1.2 - 1.9 - 3.0
**Five year change in share of world exports of goods and services (%) : 41.9 51.6 38.5 38.0 25.4
Net balance (inward - outward) of foreign direct investment (FDI) (million euro) 156.9 w 180.0 w 603.7 w 363.3 w 154.7 w 387.5 w
Foreign direct investment (FDI) abroad (million euro) 3.6 w 1.8 w 10.4 w 35.5 w 46.7 w 83.0 w
of which FDI of the reporting economy in the EU-27 countries (million euro) : 7.2 w 0.4 27.2 31.3 w 59.7
Foreign direct investment (FDI) in the reporting economy (million euro) 160.5 w 181.7 w 614.1 w 398.8 w 201.4 w 470.5 w
of which FDI of the EU-27 countries in the reporting economy (million euro) 103.9 w 87.3 w 291.2 w 220.2 42.3 w 449.7
**Net international investment position, relative to GDP (%) - 51.1 w - 58.0 w - 56.2 w - 57.3 w - 63.6 w - 62.0 pw
Year on year rate of change in gross inflow of remittances (in national currency) from migrant
workers (%)
2.8 sw 1.9 sw 1.9 sw : : :
Public finance Note 2010 2017 2018 2019 2020 2021
General government deficit / surplus, relative to GDP (%) - 2.4 w - 2.7 w - 1.8 w - 2.0 w - 8.1 w :
General government gross debt relative to GDP (%) 24.1 w 39.4 w 40.4 w 40.7 w 51.2 w :
Total government revenues, as a percentage of GDP (%) 30.2 w 29.1 w 28.6 w 29.2 w 28.5 w :
Total government expenditure, as a percentage of GDP (%) 32.6 w 31.8 w 30.4 w 31.2 w 36.7 w :
Financial indicators Note 2010 2017 2018 2019 2020 2021
Gross external debt of the whole economy, relative to GDP (%) 57.8 sw 73.4 s 73.0 s 72.4 s 78.7 s 81.9 ps
Gross external debt of the whole economy, relative to total exports (%) 150.5 w 133.8 w 121.4 w 117.0 w 136.3 w 123.7 pw
Money supply: M1 (banknotes, coins, overnight deposits, million euro) 973.4 w 2 053.3 w 2 436.7 w 2 857.4 w 3 314.2 w 3 605.5 w
Money supply: M2 (M1 plus deposits with maturity up to two years, million euro) 3 318.2 w 4 564.2 w 5 103.4 w 5 609.3 w 6 215.5 w 6 864.0 w
Money supply: M3 (M2 plus marketable instruments, million euro) 3 659.6 w 5 480.3 w 6 072.6 w 6 571.1 w 7 070.9 w 7 703.7 w
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Total credit by monetary financial institutions to residents (consolidated) (million euro) 3 148.7 w 4 883.0 w 5 237.6 w 5 552.3 w 5 791.4 w 6 277.8 w
**Annual change in financial sector liabilities (%) : 1.9 w 7.6 w 12.2 w 6.1 w 12.9 w
**Private credit flow, consolidated, relative to GDP (%) : : : : : :
**Private debt, consolidated, relative to GDP (%) : : : : : :
Interest rates: day-to-day money rate, per annum (%) 2) 3.78 w 1.01 w 0.99 w 1.00 w 1.00 w 0.88 w
Lending interest rate (one year), per annum (%) 3) 5.50 w 3.75 w 3.00 w 2.75 w 2.00 w 1.75 w
Deposit interest rate (one year), per annum (%) 3) : 0.25 w 0.15 w 0.15 w 0.15 w 0.15 w
Euro exchange rates: average of period (1 euro = … national currency) 61.519 61.575 61.512 61.506 61.675 61.636
Trade-weighted effective exchange rate index, 42 countries (2015 = 100) : : : : : :
**3 year change (T/T-3) in the trade-weighted effective exchange rate index, 42 countries
(2015 = 100)
: : : : : :
Value of reserve assets (including gold) (million euro) 3) 1 714.5 w 2 336.3 w 2 867.1 w 3 262.6 w 3 359.9 w 3 643.3 w
External trade in goods Note 2010 2017 2018 2019 2020 2021
Value of imports: all goods, all partners (million euro) 4 137 6 825 7 676 8 463 7 599 9 647
Value of exports: all goods, all partners (million euro) 2 535 5 007 5 873 6 424 5 781 6 969
Trade balance: all goods, all partners (million euro) - 1 602 - 1 818 - 1 804 - 2 040 - 1 818 - 2 678
Terms of trade (export price index / import price index * 100) (number) 4) 98.6 sw 95.3 sw 94.9 sw 95.3 sw 102.4 sw :
Share of exports to EU-27 countries in value of total exports (%) 63.7 s 79.7 s 80.3 s 78.5 s 77.5 s 77.1 s
Share of imports from EU-27 countries in value of total imports (%) 50.0 s 52.8 s 52.9 s 50.8 s 46.3 s 46.2 s
Demography Note 2010 2017 2018 2019 2020 2021
Crude rate of natural change of population (natural growth rate): number of births minus
deaths (per thousand inhabitants)
2.5 0.7 0.8 - 0.3 - 3.2 - 5.1
Infant mortality rate deaths of children under one year of age (per thousand live births) 7.6 9.2 5.7 5.6 5.7 4.6
Life expectancy at birth: male (years) 72.9 74.1 74.6 74.7 72.2 71.1 b
Life expectancy at birth: female (years) 77.2 77.9 78.8 78.6 76.7 75.5 b
Labour market Note 2010 2017 2018 2019 2020 2021
Economic activity rate for persons aged 20–64: proportion of the population aged 20–64 that
is economically active (%)
5) 70.3 70.3 70.4 71.5 70.5 70.5 w
*Employment rate for persons aged 20–64: proportion of the population aged 20–64 that are
in employment (%)
5) 48.1 54.8 56.1 59.2 59.1 59.5 w
Male employment rate for persons aged 20–64 (%) 5) 58.4 65.6 66.6 69.7 68.9 69.5 w
Female employment rate for persons aged 20–64 (%) 5) 37.5 43.7 45.2 48.4 49.0 49.2 w
Employment rate for persons aged 55–64: proportion of the population aged 55–64 that are
in employment (%)
5) 34.2 41.4 42.7 45.1 45.7 44.9 w
Employment by main sectors
Agriculture, forestry and fisheries (%) 5) : 16.2 s 15.7 s 13.9 s 12.0 s 11.5 w
Industry (%) 5) : 23.3 s 23.9 s 24.1 s 23.9 s 23.9 w
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Construction (%) 5) : 7.2 s 7.4 s 7.0 s 6.9 s 6.8 w
Services (%) 5) : 53.2 s 52.9 s 55.0 s 57.1 s 57.7 w
People employed in the public sector as a share of total employment, persons aged 20–64
(%)
6) 5) 27.0 w 23.2 w 23.1 w 23.2 w 24.4 w 25.6 w
People employed in the private sector as a share of total employment, persons aged 20–64
(%)
5) 73.0 w 76.8 w 76.9 w 76.8 w 75.6 w 74.4 w
Unemployment rate: proportion of the labour force that is unemployed (%) 5) 32.0 22.4 20.8 17.3 16.4 15.7 w
Male unemployment rate (%) 5) 31.9 22.8 21.3 16.5 16.7 16.4 w
Female unemployment rate (%) 5) 32.3 21.8 19.9 18.4 15.9 14.6 w
Youth unemployment rate: proportion of the labour force aged 15–24 that is unemployed (%) 5) 53.7 46.7 45.4 35.6 35.7 36.4 w
Long-term unemployment rate: proportion of the labour force that has been unemployed for
12 months or more (%)
5) 26.6 17.4 15.5 12.4 12.4 12.5 w
Unemployment rate for persons (aged 25–64) having completed at most lower secondary
education (ISCED levels 0-2) (%)
5) 37.9 25.6 23.1 23.7 21.4 22.8 w
Unemployment rate for persons (aged 25–64) having completed tertiary education (ISCED
levels 5-8) (%)
5) 19.3 17.1 16.6 13.3 12.9 11.3 w
Social cohesion Note 2010 2017 2018 2019 2020 2021
Average nominal monthly wages and salaries (national currency) 20 553 w 22 928 w 24 276 w 25 213 w 27 182 w 28 718 w
Index of real wages and salaries (index of nominal wages and salaries divided by the
inflation index) (2016 = 100)
101 w 101 w 106 w 109 w 116 w 119 w
GINI coefficient : 32 32 31 31 :
Poverty gap : 37.3 37.7 32.0 34.9 :
*Early leavers from education and training: proportion of the population aged 18–24 with at
most lower secondary education who are not in further education or training (%)
5) 15.5 8.5 7.1 7.1 5.7 4.6 w
Standard of living Note 2010 2017 2018 2019 2020 2021
Number of passenger cars relative to population size (number per thousand population) 151.0 194.0 200.0 205.0 207.0 260.0
Number of mobile phone subscriptions relative to population size (number per thousand
population)
7) 1 098.2 w 968.3 w 935.9 w 924.8 w 896.8 w 902.7 w
Mobile broadband penetration (per 100 inhabitants) 7) : 61.1 w 60.9 w 65.1 w 66.1 w 67.6 w
Fixed broadband penetration (per 100 inhabitants) 7) : 19 w 19 w 22 w 23 w 23 w
Infrastructure Note 2010 2017 2018 2019 2020 2021
Density of railway network (lines in operation per thousand km²) 1) 27.5 sw 26.9 s 26.9 s 26.9 s 26.9 s 26.9 s
Length of motorways (kilometres) 251 259 287 335 335 335
Innovation and research Note 2010 2017 2018 2019 2020 2021
Public expenditure on education relative to GDP (%) : : : : : :
*Gross domestic expenditure on R&D relative to GDP (%) 8) 0.22 sw 0.35 0.36 0.37 0.37 :
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Government budget appropriations or outlays on R&D (GBAORD), as a percentage of GDP
(%)
: : : : : :
Percentage of households who have internet access at home (%) 46.1 73.6 79.3 81.6 79.4 83.7
Environment Note 2010 2017 2018 2019 2020 2021
*Index of greenhouse gas emissions, CO2 equivalent (1990 = 100) 9) 99.8 w 113.0 w 79.5 w 118.7 w : :
Energy intensity of the economy (kg of oil equivalent per 1 000 euro GDP at 2015 constant
prices)
358.4 293.0 267.1 283.8 270.1 268.2
Electricity generated from renewable sources relative to gross electricity consumption (%) 15.8 24.8 24.8 23.8 23.5 21.5
Road share of inland freight transport (based on tonne-km) (%) 89.0 w 96.4 w 97.2 w 96.7 w 96.9 w 96.8 w
Energy Note 2010 2017 2018 2019 2020 2021
Primary production of all energy products (thousand TOE) 1 607 1 166 1 148 1 160 992 877
Primary production of crude oil (thousand TOE) 0 0 0 0 0 0
Primary production of solid fuels (thousand TOE) 1 194 849 800 860 685 552
Primary production of gas (thousand TOE) 0 0 0 0 0 0
Net imports of all energy products (thousand TOE) 1 268 s 1 553 s 1 513 s 1 664 s 1 648 s 1 822 s
Gross inland energy consumption (thousand TOE) 2 881 2 763 2 592 2 862 2 596 2 678
Gross electricity generation (GWh) 7 260 5 600 5 607 5 870 5 347 5 506
Agriculture Note 2010 2017 2018 2019 2020 2021
Agricultural production volume index of goods and services (at producer prices) (2010 = 100) 100.0 w 99.9 w 111.8 w 105.4 w 108.8 w :
Utilised agricultural area (thousand hectares) 1 120.6 1 266.0 1 264.1 1 264.6 1 270.5 1 268.8
Livestock numbers: live bovine animals (thousand heads, end of period) : 255.0 256.0 219.0 222.0 178.0
Livestock numbers: live swine (thousand heads, end of period) : 202.0 196.0 136.0 164.0 186.0
Livestock numbers: live sheep and live goats (thousand heads, end of period) : 832.0 s 844.0 s 771.0 s 726.0 s 709.0 s
Raw milk available on farms (thousand tonnes) : 462.2 478.5 456.1 461.1 389.2
Harvested crop production: cereals (including rice) (thousand tonnes) 547.8 452.9 605.3 569.6 585.5 568.9
Harvested crop production: sugar beet (thousand tonnes) 0.0 0.0 0.0 0.0 0.0 0.0
Harvested crop production: vegetables (thousand tonnes) 741.7 769.6 792.9 772.7 794.2 798.0 p
Source: Eurostat and/or the statistical authorities in North Macedonia
: = not available
b = break in series
d = definition differs
e = estimated value
p = provisional
s = Eurostat estimate
w= data supplied by and under the responsibility of the national statistical authority and published on an "as is" basis and without any assurance as regards their quality
and adherence to EU statistical methodology
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* = Europe 2020 indicator
** = Macroeconomic Imbalance Procedure (MIP) indicator
Footnotes:
1) Data is harmonised with the surface area in the Register of territorial units that is maintained by Agency for Real Estate Cadastre, as the official source of the surface areas of the
territorial units in the country.
2) Data cover bilateral over-night transactions. The interest rates are calculated as weighted averages.
3) End of year (31 December).
4) Laspeyres unit value index. 2015 = 100.
5) The new IESS regulation has not been implemented
6) In the public sector are included data: Other (mixed, collective, state, undefined)
7) Source: Agency for electronic communications (AEC).
8) Total expenditures for R&D as published in statistical reviews for R&D activity.
9) Part of the greenhouse gas inventory prepared in the context of the Fourth National Communication (UNFCCC).