EN    EN EN 
 
EN    EN  EUROPEAN COMMISSION 
Brussels, 9.11.2010 
SEC(2010) 1332 final 
  
COMMISSION STAFF WORKING DOCUMENT 
 
THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA 
2010 PROGRESS REPORT  
 
  
accompanying the 
 
COMMUNICATION FROM THE COMMISSION 
TO THE EUROPEAN PARLIA MENT AND THE COUNCIL 
 
Enlargement Strategy and Main Challenges 2010-2011 
{COM(2010) 660 final} 
 
EN 2   EN TABLE OF CONTENTS 
1. Introduction................................................................................................................ .. 4 
1.1. Preface................................................................................................................... ....... 4 
1.2. Context ................................................................................................................... ...... 4 
1.3. Relations between the EU and the fo rmer Yugoslav Republic of Macedonia............. 5 
2. Political criteria .......................................................................................................... .. 6 
2.1. Democracy and the rule of law .................................................................................... 6 2.2. Human rights and the protection of minorities .......................................................... 15 2.3. Regional issues and international obligations............................................................ 23 3. Economic criteria ....................................................................................................... 25 3.1. The existence of a functioning market economy ....................................................... 25 3.2. The capacity to cope with competitive pre ssure and market forces within the Union
............................................................................................................................... ..... 29 
4. Ability to assume the obligations of membership...................................................... 31 4.1. Chapter 1: Free movement of goods .......................................................................... 31 4.2. Chapter 2: Freedom of movement for workers.......................................................... 33 4.3. Chapter 3: Right of establishment and freedom to provide services ......................... 34 4.4. Chapter 4: Free movement of capital......................................................................... 34 4.5. Chapter 5: Public procurement................................................................................... 35 4.6. Chapter 6: Company law............................................................................................ 36 4.7. Chapter 7: Intellect ual property law........................................................................... 37 
4.8. Chapter 8: Competition Policy................................................................................... 38 4.9. Chapter 9: Financial Services..................................................................................... 39 4.10. Chapter 10: Information society and media............................................................... 41 4.11. Chapter 11: Agriculture and rural development......................................................... 42 4.12. Chapter 12: Food safety, veteri nary and phytosanitary policy .................................. 44 
4.13. Chapter 13: Fisheries.................................................................................................. 46  
4.14. Chapter 14: Transport policy ..................................................................................... 46 4.15. Chapter 15: Energy .................................................................................................... 48 4.16. Chapter 16: Taxation.................................................................................................. 49 
 
EN 3   EN 4.17. Chapter 17: Economic and Monetary Policy ............................................................. 50 
4.18. Chapter 18: Statistics.................................................................................................. 5 1 
4.19. Chapter 19: Social Policy and employment............................................................... 51 4.20. Chapter 20: Enterprise and industrial policy.............................................................. 54 4.21. Chapter 21: Trans European Networks...................................................................... 55 4.22. Chapter 22: Regional policy and coordi nation of structural instruments .................. 55 
4.23. Chapter 23: Judiciary an d fundamental rights ........................................................... 56 
4.24. Chapter 24: Justice, freedom and security ................................................................. 64 4.25. Chapter 25: Science and research .............................................................................. 68 4.26. Chapter 26: Education and Culture............................................................................ 69 4.27. Chapter 27: Environment ........................................................................................... 70 4.28. Chapter 28: Consumer and health protection............................................................. 72 4.29. Chapter 29: Customs Union....................................................................................... 73 4.30. Chapter 30: External relations.................................................................................... 74 4.31. Chapter 31: Foreign, Secur ity and Defence Policy.................................................... 75 
4.32. Chapter 32: Financial Control.................................................................................... 76 4.33. Chapter 33: Financial an d budgetary provisions........................................................ 76 
Statistical Annex .............................................................................................................. ........ 78 
 
EN 4   EN COMMISSION STAFF WORKING DOCUMENT 
2010 Progress Report 
1. INTRODUCTION  
1.1. Preface 
Since March 2002, the Commission has reported regularly to th e Council and the Parliament 
on progress made by the countries of the We stern Balkans region. This report on progress 
made by the former Yugoslav Republic of M acedonia in preparing for EU membership 
largely follows the same structure as  in previous years. The report:  
– briefly describes the relations between the former Yugoslav Republic of Macedonia and the 
Union; 
– analyses the situation in the former Yugos lav Republic of Macedonia in terms of the 
political criteria for membership;  
– analyses the situation in the former Yugos lav Republic of Macedonia on the basis of the 
economic criteria for membership; 
– reviews the former Yugoslav Republic of Mace donia's capacity to assume the obligations of 
membership, that is, the acquis expressed in the Treat ies, the secondary le gislation, and the 
policies of the Union. 
The period covered by this report is from mid-September 2009 to 1 October 2010. Progress is 
measured on the basis of decisions taken, legisl ation adopted and measures implemented. As a 
rule, legislation or measures which are under preparation or awaiting parliamentary approval 
have not been taken into account. This approach  ensures equal treatmen t across all reports and 
permits an objective assessment.  
The report is based on information gathered and analysed by the Co mmission. In addition, 
many sources have been used, including contri butions from the government of the former 
Yugoslav Republic of Macedonia, the EU Member States, European Parliament reports1 and 
information from various internationa l and non-governmental organisations.  
The Commission draws detailed conclusions regarding the former Yugoslav Republic of 
Macedonia in its separate communication on enlargement2, based on the technical analysis 
contained in this report. 
1.2. Context 
The European Council of Decemb er 2005 granted the status of  candidate country to the 
former Yugoslav Republic of Macedonia. Th e Stabilisation and Association Agreement 
                                                 
1 The rapporteur for the former Yugoslav Re public of Macedonia is Mr Zoran Thaler. 
2 Enlargement Strategy and Main Challenges 2010-11 (COM(2010) 660 of 9.11.2010). 
 
EN 5   EN (SAA) between the former Yugoslav Republic of  Macedonia and the EU was signed in April 
2001 and entered into force in April 2004. The Council adopted the Accession Partnership for 
the country, including key prio rities for reform, in Febr uary 2008. In October 2009, the 
Commission recommended to the Council to open ne gotiations with the c ountry, as well as to 
move to the second phase of SAA Implemen tation. The Council has not yet taken a position 
on the Commission's proposals. Visa liberalisation came into force in December 2009.  
1.3. Relations between the EU and the fo rmer Yugoslav Republic of Macedonia 
The former Yugoslav Republic of M acedonia is participating in the Stabilisation and 
Association Process . 
The country  has been implementing all the co mmitments undertaken with the Stabilisation 
and Association Agreement (SAA) with the EU, which is a key  priority of the Accession 
Partnership. In particular, the c ountry continues to  fulfil all the  commitments foreseen under 
the first stage of implementation of Title V (Movement of  workers, establishment, supply of 
services, capital) of the SAA. On this basis, the  Commission in Octobe r 2009 made a proposal 
on transition to the second stage of the  Association, pursuant to article 5 of the SAA.  
The regular political and economic dialogue between the EU and the country has continued 
through the SAA structures. The Stabilisation and Association Committee met in June 2010 
and the Stabilisation and Association Council in  July 2010. Seven sub-committees have been 
held since September 2009. The multilateral econ omic dialogue between the Commission, EU 
Member States and Candidate Countries in the context of the pre-accession fiscal surveillance 
continued, including a meeting at Ministerial level in May in Brussels. The new Special 
Group on Public Administration Reform was esta blished in June 2010, and held its inaugural 
session in September 2010. 
The EU provided guidance to the author ities on reform priorities through the Accession 
Partnership of February 2008. Progress on these reform priorities is encouraged and  
monitored through the bodies se t up under the SAA. Based on the Accession Partnership and 
the 2009 Progress Report the government adopted  its annual revision of the national 
programme for the adoption of the acquis in December 2009.  
Visa liberalisation  for citizens of the former Yugoslav Republic of Macedonia was granted 
by the Council, after consultation with the Eu ropean Parliament, as  of 19 December 2009. It 
applies to holders of biometric passports trav elling to the Schengen area. This decision was 
based on the substantial progress in the areas of  justice, freedom and security and fulfilment 
of the specific conditions set out in the roadmap for visa liberalisation.  
As regards financial assistance , the new Instrument for Pre- Accession Assistance (IPA) 
started on 1 January 2007. The current Multi-A nnual Indicative Planning Document (MIPD) 
2009-2011 for the former Yugoslav Republic of Macedonia, adopted in June 2009, remains 
fully relevant. €294.7 million are allocated to suppor t the country's efforts to comply with the 
Copenhagen accession criteria and to  help prepare the country to meet the challenges of future 
EU membership. The IPA National program me 2010 amounts to €36.9 million. In addition 
the country continues to bene fit from different regional an d horizontal programmes which 
include an IPA crisis response package developed in 2008. The package is fully operational 
in 2010. Cross border cooperation is also used  to promote capacity building and dialogue 
between local and regional aut horities of neighbouring countrie s, namely Bulgaria, Greece 
and Albania. 
 
EN 6   EN The EU financial assistance por tfolio managed by the EU De legation in Skopje amounts to 
€ 108 million. By July 2010, more than 60% of this total had been contracted and 40% 
disbursed. Assistance focuses on support to the implementation of the Ohrid Framework 
Agreement, strengthening of administrative capac ity with particular emphasis on the rule of 
law sector, economic development, and the ab ility to assume the obligations of EU 
membership. In the context of pre-accession, the EU is in the process of transferring the management of IPA funds to the national aut horities under the Decentralised Implementation 
System (DIS). Further attentio n is still needed to establish the necessary management and 
control systems to assume  this responsibility. 
Civil society  has received extensive financial suppor t from the EU under the Civil Society 
Facility. EU funding is given through differe nt national and regional horizontal IPA 
programmes, and includes aid to establish the national civil society forum, capacity building 
to civil society organisations, and the a ssistance to regional NGO support centres. The 
national programmes provide significant support to impr ove the development and 
sustainability of civil society organisations a nd further capacity building of the government 
unit for NGO cooperation. 
The former Yugoslav Republic of Mace donia participates in the following EU Programmes : 
'Entrepreneurship and Innovation programme' (EIP) of the 'Compe titiveness and Innovation 
Framework Programme', the 'Seventh Research Framework Programme', 'Progress', 'Culture', 
'Europe for Citizens', 'Fiscalis 2013' and 'Customs 2013'. 
2. P
OLITICAL CRITERIA  
This section examines the progress made by the former Yugoslav Republic of Macedonia 
towards meeting the Copenhagen political criteria, which require stability of institutions guaranteeing democracy, the rule of law, hu man rights and respect for and protection of 
minorities. It also monitors regional co operation, good neighbourly relations with 
enlargement countries and Member States and co mpliance with internati onal obligations, such 
as cooperation with the Interna tional Criminal Tribunal for the former Yugoslavia (ICTY). 
2.1. Democracy and the rule of law 
Parliament The work of the parliament has continued on the basis of dialogue, a key priority of the 
accession partnership. It adopted numerous pieces of legislation related to the accession to the 
European Union. Nonetheless there were some difficulties in the relatio ns between the main 
political forces. 
Several measures were taken to strengthen the in stitutional capacity of the parliament in line 
with the 2009 Law on parliament. The concept of public oversight hearings  on the work of the 
government was introduced by three parliamentary committees. The budgetary resources of parliament were increased by 24%, despite au sterity measures, in order to allow new 
recruitment and a major refurbishment of th e parliament building. Research capacity was 
increased by recruiting, for the first time, a ssistants to the political party groups. The 
Parliamentary Institute was formally established. It s objective is to enable all parties to have 
greater access to information and analysis. In li ne with the Law on languages, draft laws and 
other motions in the parliament are translated into Albanian. The use of Albanian in oral 
 
EN 7   EN procedure continues in committees and in hearings , including by the chair, as well as in the 
plenary. The parliamentary TV channel is  also interpreted into Albanian.  
The Committee on EU Affairs an d the National Council for EU In tegration, which is chaired 
by the opposition, continued to hold regular sessi ons. They discussed, in particular, the 2009 
Progress Report, the related Action Plan and the annual revision of the National Programme 
for the adoption of the acquis (NP AA), as well as its implementation. 
The e-Parliament continues to function smoothly.  The existing rules of procedure have overall 
been satisfactorily implemented. 
The number of women MPs increased to 41, representing over 30% of the total. A new 
parliamentary group was established by the oppos ition New Social Democratic Party, Liberal 
Party and New Alternative.  
After one year of discussions the amendments to the rules of procedure were adopted in 
September. These should strengthen parliament ary cooperation in the future by setting out 
clearly the right of the oppositio n to table issues on the parlia ment's agenda. However, during 
the reporting period there was little dialogue on sensitive polit ical issues. In response, the 
opposition groups decided to stop participating in formal coordination meetings from April to 
September. The opposition DPA, which has 5 MP s, continued the boycott of parliament 
which it began in August 2009. 
An incident in parliament at the beginning of July between opposition members and a plain 
clothes policeman highlighted th e tense political climat e and the need to increase confidence 
between political actors. The opposition tabl ed motions of no confidence against the 
parliamentary Speaker and the Minister of Interi or which were hotly debated but were finally 
rejected. A Parliamentary Inquiry Committee wa s established at the end of July. It is 
important that it clarifies the responsibilities for the incide nt and makes proposals to avoid 
any repetition in the future.  
The parliamentary committee on inter-ethnic relations failed to meet several times due to the 
inability to achieve a quorum. Six sessions out of a total of te n scheduled since its 
establishment in mid-2008 have been cance lled. Cooperation between the parliamentary 
committee for relations among communities and the corresponding committees in the municipalities remains insufficient. 
The National Council for EU Integration suffe red from uneven support from the government 
which on occasion failed to provide materials and reports or the presence of ministers. The 
oversight committee on the work of the intell igence agency did not meet and the committee 
on interception of communications and on local self-government remained among the least 
active. The committee for relations among communities was disrupted by the absence of the MPs from the ruling coalition, who prevented the quorum from being reached. The committee 
limited its activity to the application of doubl e majority (‘Badinter majority’) rules in 
parliament for non-majority community legislation. This also had a negative effect on the work of inter-ethnic councils at local level. The involvement of civil society representatives in 
public hearings and other consultations remain ed ad hoc and selective and the follow-up to 
recommendations of the civil society sector by parliament inconsistent.  
The government followed-up the 2008 and 2009  elections  and the ODIHR/OSCE 
recommendations. It established a high-level steering committee and four working groups on 
 
EN 8   EN electoral administration, elimination of voter intimidation, amendments to the electoral code, 
and updating the voters list. The electoral code remains to be amended. The courts sentenced 
65 perpetrators of irregularities in the 2008 early parliamentary elections. Regarding the 
irregularities in the 2009 pres idential and local elections , no charges were pressed.  
Overall, there has been further progress in the reform of the parliament.  Amendments to the 
rules of procedure were adopted to safeguard th e rights of the oppositi on. The parliament took 
measures to strengthen its institutional capac ity, in particular through launching public 
hearings and establishing a Parliamentary In stitute. However, the Parliamentary Committee 
on inter-ethnic relations failed to meet several times due to the lack of a quorum. The government's cooperation with the National Council for European Integration needs to be developed further. 
Government 
The government coalition continues to be stable and to resolve differences through 
cooperation. It has continued to take forward th e EU reform process, in particular through the 
adoption of its annual revision of  the NPAA. However, coalition relations have been strained 
by insufficient dialogue on initia tives perceived to have a di visive effect on inter-ethnic 
relations, such as the introduction of teaching of  the state language from the first year and a 
new urban plan for ‘Skopje 2014’.  
The Secretariat for European Affairs convene d monthly meetings of the EU integration 
structures within the administration. Noneth eless it needs to further strengthen the 
coordination of the EU integration agenda. 
Decentralisation, which is a basi c principle of the Ohrid Framework Agreement, continued. 
The inter-ministerial working group on decentr alisation met regularly. The programme and 
action plan for implementing decentralisati on 2008-2010 were updated. A nother 6 of the 85 
municipalities entered the second and last phase of the fiscal decentralisation process. This 
provides for a more substantial transfer of co mpetencies and financial management to the 
local level. The Law on financi ng the units of local self-government was amended to increase 
the share of VAT transferred to municipali ties from 3% to 4.5% from 2010 to 2013.  
The strategy for transferring the management of  state-owned land to the municipalities from 
2011 was finalised. Capacity-building programmes are being implemented to strengthen the 
capacity of municipalities in the areas of pr operty tax administration, human resources and 
financial control. Financial affairs units were established in seven municipalities. 48 municipalities established internal  audit units or engaged an inte rnal auditor and the majority 
have become operational. The human resources  capacity of the Ministry of Local Self-
Government (MoLSG) for the management  of EU funds has been increased.  
However, progress in meeting the objectives of  decentralisation needs to be accelerated 
through the impetus of the Ministry of Local  Self-Government. The Ministry of Finance 
needs to strengthen its capacity to develop policy on local government budget issues. The inter-ministerial committee for monitoring the financing of municipalities has only met once. The transparency and coordination of central funding for municipal projects needs to be 
significantly strengthened in line with the objec tive of balanced regional development.  
The eleven municipalities which remain in phase  1 of the decentralisat ion process all have 
sizeable debts or lack financial management capacity. Additional efforts should be made to 
 
EN 9   EN prepare them for moving into phase 2. Bl ocked accounts remain problematic for 
municipalities in both phase 1 and 2. Mechanisms to address the significant disparities in 
delivery of public services are limited and ru ral and small municipa lities are especially 
disadvantaged. Some m unicipalities remain weak in mon itoring or enforcing property tax 
collection. 
There are administrative bottlenecks impeding  the opening of new schools. Social care 
services remain to be decentr alised. Exchange of data betw een the land registry, the civil 
registry, the revenue office and the munici palities is yet to be strengthened.  
Significant additional efforts at  central and local level are needed to strengthen the 
administrative capacity of some mu nicipalities. This concerns in particular financial control, 
strategic planning, human resources manageme nt and economic development. The State 
Audit Office reported numerous shortcomings in th e application of financial control standards 
and procurement rules as well as poor follow-up of previous recommendations. There was little progress in implementi ng annual training programmes in a systematic manner. 
Monitoring and appraisal of staff performance n eed to be significantly strengthened as does 
fair representation. There are concerns about ille gal dismissals due to political interference.  
Overall, the government coalition continues to be  stable and to resolve differences through 
cooperation. It has continued to take forward th e EU reform process. However, more dialogue 
is required on issues concerning inter-ethnic re lations. Additional efforts are necessary to take 
the decentralisation process forward. The financ ial framework for local service delivery needs 
to be more transparent and equitable. 
Public administration  
As regards reform of the public administration, a key priority of the Accession Partnership, 
progress was partial and mainly confined to legi slative aspects. The political and operational 
responsibility for management of public ad ministration remains fr agmented. The High 
Committee on public administration, formally le d by the Prime Minister, meets on a monthly 
basis to address the reform needs in the fi eld. The Committee's conclusions, however, have 
not been systematically and effectively implemented.  
In an effort to streamline discussion on public ad ministration reform and to drive it forward in 
a structured manner, a specialised platform wa s created with the EU under the framework of 
the Stabilisation and Association Agreem ent (SAA). The Special Group on Public 
Administration Reform held its first session in September 2010.  
The Law on public servants was enacted in order to introduce similar provisions to those in 
the Law on civil servants. It will  enter into force in April 2011. The law regulates the scope of 
the public service as a whole;  recruitment procedures; right s and obligations of public 
servants and their protectio n; and responsibility, assessm ent, and termination of 
employment. The law entrusts new competences  to the Civil Servants Agency (CSA): 
preparation of an annual plan on fair repres entation, reports on disciplinary procedures and 
staff appraisals, training of public servants, and keeping of a public servants registry. The 
Ministry of Justice adopted the code of  ethics for public servants in August 2010. 
The amendments to the Law on civil servants adopted in 2009 entered into force in March 
2010. The CSA has adopted most of the relevant implementing legislation and is coordinating 
its application, including conduc t of the recruitment procedur e. State administrative bodies 
 
EN 10   EN (SABs) and municipalities have begun to align their organisational charts with the Law on 
civil servants. The CSA developed monitoring  plans and performed inspections. It also 
continued to strengthen its capaciti es to develop and deliver general training for civil servants. 
However the training plan for 2010 could not be implemented due to budgetary restrictions.  
The CSA reported no cases of unlawful promoti ons and demotions of civil servants, or 
violations by them of the provisions of th eir code of ethics. Re garding disciplinary 
proceedings against civil servants, activities are appropriately handled by the CSA on a regular basis. The administrative capacity of  the human resources (HR) units in some 
ministries and the CSA was incr eased slightly. The working gr oup to coordinate the network 
of HR units is now operational.  
There was progress in police reform with the entry into force of the Law on internal affairs, 
which aims to ensure the professionalism and de -politicisation of official s of the Ministry of 
Interior (MoI), including senior police officer s. The MoI adopted most relevant pieces of 
implementing legislation and establishe d working groups for monitoring their 
implementation, including the Collective Agreement with Police Trade Unions. The Systematisation Act that will introduce a merit- based career and appraisal system remains to 
be adopted. 
However, the recruitment procedure under th e Law on public servants does not guarantee a 
merit-based recruitment procedure, nor does it establish when an external rather than an 
internal recruitment procedure will apply. Also, ther e is no probationary period and promotion 
is not clearly linked to sta ff appraisals. The capacity of the CSA to take on the new 
competences conferred by the Law on public servan ts is insufficient in terms of expertise, 
budget and available infrastructure.  
The Law on civil servants allows certain rights and responsibilities of ci vil servants in some 
institutions to be regulated di fferently. This fragments the legal framework applicable to civil 
servants, allowing for too many exceptions. Two out of eleven laws governing these 
institutions have been partially harmonised with the Civil Servants Law. Salary-related 
provisions in particular remain inconsistent. The final stage of the civil servant's recruitment 
does not guarantee a transparent, merit-based selection, as it leaves too large room for discretion. Similarly to the Law on public servan ts, the application of the external versus 
internal recruitment proc edure is not specified.  
There is still no comprehensive reporting to th e CSA in line with the legal obligations on 
appointments, promotions, training of civil servants, fair represen tation, and complaints 
lodged by civil servants. A number of HR units at central and local le vel remain understaffed. 
Implementation of HR standards is slow, as  only 10 pilot institutions have started 
systematically introducing them. The capacity to perform staff a ppraisals remains insufficient. 
There is no coherent planning of HR needs acr oss the entire civil service. More than 18 
months after it was established, the main civil se rvants training facility  is not operational.  
Concerns remain regarding politi cisation of the public service. There have been reports of 
replacement of trained professionals with appointees of limited e xperience in several 
institutions. Also, senior management positions have been filled in the absence of appointment criteria, sometimes with  staff under temporary contracts. 
Although the government acknowledged that the number of tempor ary posts within the public 
administration is disproportionally high, it ha s not provided precise information on the 
 
EN 11   EN number and type of its temporary staff. The hi ring of temporary staff is not compliant with 
procedures set out in the Laws  on civil and public servants to guarantee transparency and 
merit-based selection. A large number of tempor ary posts were converted into permanent ones 
in the third quarter of 2010. This process in many cases did not provide for an open, 
transparent, competitive and merit-based recruitm ent. The recruitment of a large number of 
employees from the non-majority communities  is on a quantitative basis and without 
matching the needs of the institutions with the required training and qualifications. The recruitment procedure is vulnera ble to undue influences. There is no structured relationship 
between the CSA and the Secretariat for Impl ementation of the Ohrid Framework Agreement 
for planning of fair representation. The number of complaints submitted concerning 
replacement or dismissal from work by muni cipal civil servants to the CSA increased 
following the municipal elections. The CSA repor ted that most of the complaints were 
rejected as unfounded. 
As regards general administrative procedure, the administrative silence is equivalent to 
implicit rejection in the majority of cases. This a pproach is to the detriment of the citizens vis-
à-vis the administration. The appeals procedure through the s econd-instance commissions is 
not uniform across the p ublic administration.  
Effective social dialogue between the governme nt and the organisations representing civil 
servants remains to be established. The payr oll system in the public  administration is not 
unified, affecting unity and mobility. The prac tice of paying ad hoc allowances to public 
servants for assuming certain types of tasks pert aining to their job duties is not transparent and 
without proper justification. The career-related supplements for ci vil servants continued to be 
inconsistently applied. The quality of strate gic planning within SABs  and municipalities is 
insufficient, and is mainly confined to budgetary planning. The related budgetary support is inadequate. SABs need to pay higher attenti on to transparency and accountability. The State 
Audit Office (SAO) reported numerous shortcom ings in the SABs’ and municipalities’ 
accounts regarding the application of internal fi nancial control standard s, procurement rules, 
and human resources policy. The regulatory impact  assessment is not applied systematically. 
The use of the citizens’ charter has been expanded to other SABs , yet there is no feedback on 
its effectiveness.  
Public bodies accepted the Ombudsman’s recommendations in the majority of cases in 2009. 
However, there was a decrease in responsiven ess observed, in partic ular in the second-
instance government commissions, and in the Interior  Ministry’s units for status rights and for 
border control.  
The quality of legislative drafting by the central and local administration needs further 
improvement. The Constitutional Court annulled provisions in nearly 25% of cases where laws were challenged.  
Amendments introduced to the Law on free access to public information sought to increase its 
effectiveness in particular by introducing a pub lic interest test. The number of complaints 
received by the National Commission dropped c onsiderably. Almost half of the complaints 
received resulted in the information being made available. However, the effectiveness of the 
National Commission is hampered by its small budge t allocation and the t acit refusal of some 
of the public bodies to provide information. Information relating to  public expenditure 
continued to be subject to va rious exceptions provided by th e law and thus only partially 
available to the public. 
 
EN 12   EN Overall  there was some progress as regards reform  of public administration, notably through 
the adoption of the Law on public servants. Howeve r, significant further efforts are needed to 
ensure the transparency, professionalism and independence of public ad ministration. Respect 
of the legal framework needs to be ensured in  practice, in particular as regards staff 
recruitment. The process of c onverting a large number of te mporary posts into permanent 
ones in many cases did not provide for compet itive and merit-based recruitments. Police 
reform has made further progress. The new La w on internal affairs entered into force and 
most necessary implementing legislation has been adopted. 
Judicial system 
Limited progress was made in implementing the re form of the judiciary, a key priority of the 
Accession Partnership.  
Regarding the independence of the judiciary, no  further progress was made in ensuring that 
the existing legal provisions are implemented in pr actice. The role of the Minister of Justice 
within the Judicial Council raises serious concer ns about the interference of the executive in 
the work of the judiciary. The boundaries between  the grounds for disciplinary procedures 
and the grounds for judicial review are not cl early defined. Further efforts are needed to 
ensure that the assessment of judges' professiona l ability is not made primarily on the basis of 
quantitative criteria, such as reversal rates of  judgements, but also on qualitative criteria in 
line with Council of Europe recommendations . Appointments of some members of the 
Judicial Council were not in li ne with established criteria. 
The Prime Minister, the Minister of Justi ce, the Speaker and several VMRO-DPMNE MPs 
openly criticised the work and the decisions of  the Constitutional Court, considering them to 
be politically motivated. The President of the Constitutional Court defended the Court and called on the political pa rties to respect the Court’s aut hority. The implementation of the 2008 
Law on lustration resulted in a first case when the lustration committee found that the President of the Constitu tional Court cooperated w ith the secret services. The President of the 
Constitutional Court denied these allegations. Thes e developments have raised concerns about 
pressure on the independence of the judiciary. 
The Judicial Council made some efforts to impr ove professionalism of the judiciary. In order 
to ensure merit-based recruitment, the Judicial  Council and the Council of Public Prosecutors 
have appointed 39 out of 54 graduates from  the Academy for Training of Judges and 
Prosecutors (ATJP). A new law on the ATJP was enact ed in July to furthe r clarify the criteria 
for selection of judges. Howeve r, further efforts are needed to establish a comprehensive 
human resources strategy, including long-term  planning of recruitment needs, career 
management and mobility issues. ATJP conti nues to provide continuous training which 
remains necessary. 
Continued efforts were made to improve efficiency. The 2009 budget for the courts and for 
the Public Prosecutor’s Office were slightly in creased despite the economic crisis. Also, the 
court budgetary council facilitated a higher rate of absorption of  the funds allocated to the 
courts. The Automated Court Case Management Information System (ACCMIS) is fully implemented in all courts. The courts publis hed over 34,000 decisions, thus strengthening 
transparency.  
The Laws on salaries of judges, prosecutors an d members of the Judicial Council and of the 
Council of Public Prosecutors were amended to provide for a unified salary system. The 
 
EN 13   EN salaries among serving judges and prosecutors, including those who are serving in the two 
councils, are harmonised. 
The backlog of old court cases continues to be a major problem. While 20 out of 27 basic 
courts managed to resolve most of the newly received cases and to reduce their backlog, the 
four courts of appeal and th e administrative court did not 
Departments in the new Administrative Court, the Court of Appeal in Gostivar, the higher 
prosecutor’s office in Gostivar, and the Council of  Public Prosecutors remained understaffed. 
The Ministry of Justice lacked appropriate human  resources in key sectors such as for the EU 
and anti-corruption. The Council for Judicial Refo rm, whose role is to steer the reform and 
monitor its implementation in the presence of a ll key actors in the judiciary, is not meeting 
regularly. Delayed enactment of the amendmen ts to the Law on criminal procedure still 
prevents full implementation of the Law on th e public prosecutors as regards the pre-trial 
investigation phase. Amendments to the Law on administrative disputes to address the 
Constitutional Court ruling introducing a ri ght to appeal are still outstanding.  
No systematic efforts were undertaken to improve  the coverage and the reliability of judicial 
statistics. The Public Prosecutor’s Office remains without access to the internet. 
Overall , there was limited progress on judicial reform. The efficiency of courts was 
strengthened through improved budgetary management and a reduction of the backlog of 
cases. However, the Judicial Council and the C ouncil of Public Prosecutors need to ensure 
high standards of independence and impartiality of  the judiciary in pract ice. It is key that 
recruitment into the judiciary is principall y from amongst the qualified graduates of the 
Academy for Training of Judges and Prosecutors. 
Anti-corruption policy 
Progress was registered in the implementation of the anti-corruption framework, which is a 
key priority of the Accession Partnership. All 14 recommendatio ns of the Group of States 
Against Corruption (GRECO) second evaluation round have been followed up. The GRECO report for the third evaluati on round was published, comprisi ng 13 recommendations on the 
incrimination of corruption-related offences and on the transparency of political party funding 
to be implemented by September 2011. The count ry has initiated the procedure for acceding 
to the OECD Convention on Combating Bribery of  Foreign Public Officials. The amendments 
to the Criminal Code introducing provisions on  extended confiscation, illicit enrich ment and 
criminal liability of legal persons for influe nce peddling entered into  force. The regulatory 
framework for the status of public officials ot her than civil servants  was set up. The inter-
ministerial working group for monitoring the state anti-corruption programme met on a 
regular basis. 
Three large-scale police operations were carried out, leading to the arrest of numerous border 
police officers, doctors and officials from the Pension and Disability Insurance Fund. Prison 
sentences were imposed on some of the defendant s in first-instance court decisions. For the 
others the investigation or the court proceedings are ongoing.  
The Office for Prevention of Money Laundering and Financing of Terro rism now has direct 
access to the asset declarations database of the State Commissi on for Prevention of 
Corruption (SCPC). Following checks by the SCPC two mayors were fined up to 70% of their 
unjustified difference in wealth, in line with th e legal provisions. The number of conflicts of 
 
EN 14   EN interest detected by the SCPC increased. The SCPC increased the number of completed cases 
from 567 in 2008 to 828 in 2009. Some improvements are noted in the mechanism for follow-up of the State Audit Office recommendatio ns with 55 reports issued in 2009.  
However, implementation of the anti-corruption legal framework remains deficient. The new 
legislation was not accompanied by proper impact assessments, with the result that planning 
of the necessary human and financial resour ces and preparation for implementation was 
inadequate. The entry into force of the new provis ions of the Criminal Code, in particular on 
illicit enrichment and extended confiscation, were  not sufficiently prepar ed and will require 
additional training.  
The case-law on corruption is inconsistent. Thr ee of the highest-level corruption cases with 
imprisonment decisions have been  sent back to the lower courts due to  procedural flaws found 
in the first-instance proceedings. The limited capacity of the Criminal Law Section in the Skopje Court of Appeal was further weakened by the suspension of more than half of its 
judges for disciplinary reasons. Tw o of the judges were dismi ssed and the other three were 
returned to the Court after three months. Inde pendence of the judiciary remains a matter of 
serious concern affecting the dete rmination to combat corruption. The role of the Ministry of 
the Interior in authorising the use of interceptions  is not in line with EU standards and raises 
concerns about undue political interference. Moreover, the external oversight mechanism 
needs to be strengthened. 
The number of cases in which a conflict of interest was found and action taken is still low. 
The asset declarations of civil servants and the declarations of interest are confidential and are 
not being checked on substance. No consistent tr ack record on checking asset declarations of 
appointed and elected offici als has been built up.  
Transparency of public expenditure is not  satisfactory. The law on public access to 
information does not expressly prov ide that the content of the publ ic contracts is public. This 
leads to divergent interpretations throughout  the administration. The internal control 
mechanisms in the public administration remain  weak. Legal and institutional protection of 
whistle blowers is largely insufficient. Conseq uently, reporting of su spicions of corruption 
within the public service remains scarce. 
The implementation of the legislation on financing of political parties and election campaigns 
has not yet yielded results. No sanctions for non-compliance with  the law have been applied 
by the supervisory bodies. VMRO, SDSM and DUI submitted their reports one year after the 
deadline. 
The SCPC’s strategic plan for public relatio ns has not had a visi ble impact. The SCPC 
members continue to perform their tasks part-tim e, which may affect the effectiveness of ex 
officio actions. Public trust in the independence and impartiality of the SCPC is still rather 
low. The SCPC remains reac tive rather than proactive.  Following the 2010 state budget 
rebalance the SCPC faces severe financial difficulties. 
The capacity of the Ministry of Justice to coordinate at techni cal level monitori ng of the anti-
corruption policies is insufficient. While the technical-level meetings of the inter-ministerial working group intensified, the high-level political commitment to monitoring of the implementation of anti-corruption policies ha s weakened. No comprehensive exercise has 
been carried out so far to identify the extent and nature of corruption in the public sector. The statistics system relevant for the monitoring of anti-corruption policies is still insufficiently 
 
EN 15   EN developed. There is no comprehensive appro ach to developing specific anti-corruption 
strategies for the vulnerable  areas of the public sector. 
Overall , some progress was made in  the field of anti-corrupti on policy. Further steps were 
taken to set up the National Intelligence Data base. Large scale police operations making use 
of special investigative measures were carried out. However, the track-record of enforcement 
on corruption cases is inconsistent. Existing provisions on asset decl arations, conflict of 
interest and financing of politic al parties are not implemented effectively. Corruption remains 
prevalent in many areas and contin ues to be a serious problem. 
2.2. Human rights and the protection of minorities 
Observance of international human rights law There was some progress in the ratification of human rights instruments . Protocol 14 bis to 
the Convention for the protection of human rights and basic freedoms was ratified. The 
Council of Europe Convention on the protection of children against sexual exploitation and 
sexual abuse was ratified. The European Charter for regional or minority languages is still not 
ratified. 
The European Court of Human Rights (ECtHR) found that the co untry had violated the 
European Convention on Human Rights in 21 cases , mostly related to trial in a reasonable 
period of time. A total of 400 new applications were made to the ECtHR since October 2009. 
As of September 2010, there were 1,122 cases pending before the ECtHR regarding the 
former Yugoslav Republic of Macedonia. 
There was limited progress in the promotion and enforcement of human rights . The legal 
framework is broadly in place, however the institutional framework is not completed. The Ombudsman’s Office continued to be the main fo cal point for the protection and promotion of 
human rights.  
Civil and political rights 
With regard to the prevention of torture and ill-trea tment and the fight against impunity , 
the Ombudsman was designated as a national prevention mechanism for implementing the Optional Protocol to the Convention agai nst Torture and has set up a corresponding 
specialised unit on combating ill-t reatment. The sector for internal control and professional 
standards in the Ministry of the Interior continued to perform frequent checks on the 
observance of professional standards. No case of illegal arrest was reported.  
The lack of additional resources given to the Ombudsman’s Office hampered the 
establishment of three new units including the one on combating ill-treatment. Allegations of ill-treatment of apprehended persons by the sp ecial ‘Alpha’ police units, which remain in 
place only in Skopje, persisted. In 2009, 46 investiga tions were carried out into allegations of 
abuse by the special mobile unit as compared  to 33 in 2008. The numb ers of cases of ill-
treatment which were prosecuted dropped to 36 cr iminal charges against 50 police officers in 
2009 as compared to 67 criminal charges agai nst 75 police officers in 2008. This has raised 
concerns about the effectiven ess of the complaints system  and there is still no robust 
independent mechanism for oversight of the law enforcement agencies. Decisions in this area 
by the European Court of Human Rights, in par ticular as regards police brutality towards the 
Roma, were not fully implemented. 
 
EN 16   EN Inhumane and degrading treatment in psychiatric institutions is a matter of particular concern. 
The conditions in mental hospitals, notably  Demir Hisar and Demir Kapija, remain 
considerably below minimum standards. 
A comprehensive Law on legal aid was enacted  in December and becam e operational in July. 
The scheme is managed by the Ministry of Just ice in partnership with  bar associations and 
civil society organisations. A wide range of e ligible persons may bene fit from legal aid, 
notably those on social security, pensioners, si ngle parent families and asylum seekers. The 
law provides for legal aid in all court and administrative proceedings and thus improves 
access to justice .  
The statistics compiled by the Ministry of Justi ce showed an increase in the duration of court 
cases in 2009. The basic courts resolved 56% of civil cases within six months, a smaller 
proportion than in 2008 (65%). A similar trend is observed in commercial and criminal cases. 
The second-instance government commission s, which decide on appeals filed against 
decisions by administrative bod ies, continue to be the leas t responsive to the Ombudsman’s 
instructions.  
Some progress can be reporte d with the reform of the prison system . Amendments to the 
Law on execution of sanctions were enacted on the inspection and supervision services. These 
strengthen the controls regard ing management, human rights, h ealth care and anti-corruption 
policies. The government adopted an update d action plan for 2010 for the construction, 
refurbishment and maintenance of prisons. A lo an of € 46 million from the Council of Europe 
Development Bank (CEB) was concluded for the implementation of a reconstruction project 
for the Idrizovo, Kumanovo and Skopje prisons and for the Tetovo Correctional-Educational 
Centre. The inmates of the Idrizovo semi -open ward, where degrading and inhumane 
conditions were reported, were relocated in April and the renovated ward was reopened in 
September. The Idrizovo closed ward remains to be renovated. 
In 2009, 49 complaints against prison staff were filed with the Director ate for Execution of 
Sanctions. Disciplinary procedures were app lied in 2009 to 108 prison staff. The procedures 
for dealing with complaints of  ill-treatment have been impr oved, in particular through the 
introduction of the Ombudsman’ s mailbox system and the organi sation of training activities. 
The Ministry of Labour and Social Policy te mporarily relocated the Tetovo Correctional-
Educational Centre. A strategy was adopted fo r the re-socialisation and rehabilitation of 
inmates. Reconstruction of the detention cells was completed in Kisela Voda police station 
and is in progress for seve ral other police stations. 
However, the strategic plans for the prison syst em do not ensure proper  prioritisation and a 
balance among short-, medium- and long-term  measures. The current capacity of the 
Directorate for Execution of Sanctions to mana ge the project covered by the CEB loan is 
insufficient. Moreover, due to the economic crisis meas ures, the budget of the prison 
administration, which was already insufficien t, has been cut by 10% in the 2010 budget 
revision.  
The degrading conditions and the dire state of some prisons, in particular Idrizovo and its 
closed ward, remain of serious concern. Prisons continue to face overcrowding and an inadequate healthcare system. Most of the prisons are underfunded and cannot cover their 
basic maintenance expenses. The mechanisms for preventing and combating ill-treatment and corruption in prisons remain weak. The system is not yet sufficiently proactive in detecting 
these cases and ensuring proper follow-up. 
 
EN 17   EN The capacity of the prison inspec tion service is largely insuffi cient. There are only five 
inspectors. Appointments to some prison manage ment positions are still subject to political 
interference, affecting the e ffectiveness of the prison reform and the day-to-day 
administration of prisons. Traini ng of prison staff is still not systematic. Training of prison 
governors on management matters is largely insufficient. Treat ment of vulnerable prisoners, 
including juveniles, continues to be defici ent. Conditions in detention cells remain 
substandard in a significan t number of police stations. 
The European Parliament’s recommendation on fo llow-up to the Khaled El-Masri case of 
alleged extra-judicial detention has still not been responded to.  
Freedom of expression remains generally well protected. Th ere has been some progress in 
ensuring a transparent, independent and divers e media environment. Amendments introduced 
to the Broadcasting Law repealed the possibilit y for the public service broadcaster to be 
declared bankrupt or liquidate d, and reduced the amount of the monthly broadcasting fee in an 
attempt to improve broadcasting fee collection. Mo reover the rate of colle ction of the viewing 
license fee has increased significantly. It is important to consolidate these efforts to ensure sustainable funding of the public service broa dcaster and the Broadcasting Council. The 
broadcast licensing process is strongly influenced by economic and political interests. The 
media remain divided along ethnic and political lines and self-cen sorship is widespread. Only 
one TV channel (Albanian langua ge) broadcasts recurrent bili ngual programmes and actively 
contributes to greater mutual understanding be tween the two largest communities. Ownership 
of the printed media is still not transparen t and highly concentrated. There is no self-
regulation mechanism for monitoring profession al standards which should be upheld. Libel 
charges which target individual journalists with  heavy fines remain a concern. Intimidation of 
journalists, who face political pressure  and threats, is a serious concern. 
With regard to freedom of assembly and association , the overall situation is satisfactory. 
There were no cases of misuse of the legislation or prohibited registrations . The newly 
enacted Law on citizens’ associat ions and foundations provided fo r wider practice of the right 
of association. This was extended to legal enti ties, foreigners and mi nors, and the right to 
associate without needing to regist er a formal legal entity. It al so introduced the possibility for 
civil society organisations to pe rform directly economic activitie s and to obtain the status of 
public benefit organisation.  
The government’s strategy and action plan for cooperation with civil society organisations 
continues to be implemented. Involvement of ci vil society in the policy development process 
and in legislative drafting is growing. Nonetheless, a consistent  approach to encouraging all-
inclusive public participation in decisi on making, including appropriate institutional 
mechanisms, needs to be developed.  
Implementation of the Law on lobbying resulted in selective access of interest groups to 
policy making. Lobbying can only be undertaken at  the invitation of the relevant legislative 
body and is allowed for civil a ssociations but not for foundations. Implementation of the Law 
on sponsorship and donations is not progre ssing, due to the complex administrative 
requirements and lack of public awareness.  
The system for the allocation of state financi ng of civil society orga nisations needs further 
improvement, in particular as regards public benefit organisations. Ev aluation and selection 
mechanisms need to be fully transparent. Civil society organisations remain heavily 
 
EN 18   EN dependent on foreign funding and the lack of su fficient financial resources remains a serious 
constraint.  
As regards freedom of religion , the Law on the legal status  of churches, religious 
communities and religious groups is being implemented for the most part. Registration was completed for 26 religious entities. The Bektashi  group requested their registration to be put 
on hold until they reach an agreement w ith the Islamic religious community.  
Overall, whilst civil and political rights are broadly respected, limited further progress was 
made. A comprehensive law on legal aid was adopted. The semi-open ward of Idrizovo 
prison, which had degrading and inhumane c onditions, was closed down. However, the 
oversight of law enforcement agencies needs to  be strengthened. The strategy to address the 
degrading prison conditions is  progressing slowly. There ar e growing concerns about undue 
political interference in the media. Involveme nt of civil society in policy development 
remains limited. The Ombudsman continued to be  the main focal point for protection and 
promotion of human rights. However, the aut hority and the resources of the Ombudsman need 
to be strengthened. 
Economic and social rights 
As regards women’s rights , implementation of the national strategy against domestic 
violence has continued. Progre ss was made in implementing the Law on equal opportunities 
between men and women. A civil servant from th e Ministry of Labour and Social Policy in 
charge of dealing with complaints agains t unequal treatment has been appointed. The 
capacities of most of the local commissions on  equal opportunities have been strengthened. 
Compulsory annual reporting on equal opportuniti es has improved, mainly at central level. 
The issue of discrimination in the workplace and sexual harassment has been addressed by 
amendments to the Labour Law. Limited actions targeting Roma women have been implemented. However, the fight against do mestic violence suffers from insufficient 
awareness among the population and an approach which is sensitive to victims. The coordination body for the national strategy to co mbat domestic violen ce needs to strengthen 
its efforts in this regard. 
The participation of women in political life rema ins low at local level. The sector for equal 
opportunities still does not have adequate human and financial capacity to fulfil its mandate. 
A strategic long-term approach to equal opport unities is still missing. Action in this area 
continues to rely mostly on foreign donations . In some municipalities the turnover among 
members of local commissions on equal opportu nities jeopardises their efficiency.  
Discriminatory customs, traditions and ster eotypes are widespread and undermine women’s 
basic rights. Little has been done to improve  women’s rights in rural areas. Insufficient 
attention is paid to women’s health. Roma wo men and girls still suffer from both racial and 
gender discrimination. 
As regards children’s rights , the Law on protection of children has been amended. The 
implementation of the national action plan for th e protection of children’ s rights, the national 
action plan on preventing and combating sexual abuse and p aedophilia and the fight against 
trafficking of children progressed very slowl y. An updated action plan for the implementation 
of juvenile justice law c overing the period 2010–2012 was de veloped. The National Council 
for Prevention of Juvenile Delinquency has been  established. Juvenile offenders have been 
withdrawn from prisons where they had been at  risk of association with adult inmates. 
 
EN 19   EN However, the standards and protocols for the implementation of the La w on juvenile justice 
are not yet in place. The mechanisms for monito ring its enforcement are not effective. There 
is a shortage of specialised trained police o fficers, public prosecutors  and prison staff for 
dealing with juvenile victims or juveniles in conflict with the law. Police detention cells and educational-correctional centres do not me et the basic international standards for 
administration of juvenile justice. Education programmes and vocational training for juveniles 
in educational-correc tional centres should be  strengthened. Prevention of juvenile 
delinquency remains of concern, si nce no strategic documents have yet been developed in this 
area. No budget has been allocated to the state compensation fund set up by the Law on 
juvenile justice. International instruments such  as the UN Convention on Rights of the Child 
are poorly implemented.  
The Council of Europe Convention on the protec tion of children against sexual exploitation 
and sexual abuse was ratified in October. There was an increase in the number of reported 
cases of physical and sexual abuse and abduction. Street children, the majority of which are 
Roma, remain a significant pr oblem, often combined with other issues such as drug 
consumption and petty crime. With reference to  the right to education, Roma children are 
highly disadvantaged, with a primary education completion rate of 44.6%, a transition rate to 
secondary school of 27% and an overall seco ndary school net attendance of 17.4%. Children 
with disabilities remain a highly vulnerabl e group with limited access to health care and 
integration into the educational and recreational system. Health and social services lack sufficient skilled professionals.  
Concerning socially vulnerable people and people with disabilities, a national strategy on 
equality of rights of people with disabiliti es 2010-2018 was adopted. The related action plan 
foresees the construction of acce ss ramps in buildings of public interest. The number of day-
care centres, small communal houses and support for families accepting people with disabilities as forms of social care services is steadily incr easing. The admini strative capacity 
of the municipalities remains in sufficient to fulfil the social policy responsib ilities to be 
transferred to them as part of decentralisation. In general, soci al integration of people with 
disabilities remains limited. Further efforts ar e needed to ratify the UN Convention on the 
rights of persons with disabiliti es and to adopt the proposed law for protec tion of the rights of 
persons with disabilities. 
As regards labour and trade unions rights, registration of trade unions and employers’ 
associations in accordance with the amended Law on labour relations has been accomplished. 
There are 35 trade unions listed in the register of the Ministry  of Labour and Social Policy and 
6 employers’ associations. The criteria for me mbership of the Economic and Social Council 
have been clarified, and new members have  been appointed. The Council has become 
operational and needs to contri bute to a functional and repres entative social dialogue. The 
capacity of the social partners  has not improved as trade unions  continue to lack stable 
finances, management capacity and an active me mbership. Bipartite so cial dialogue remains 
weak in particular in the private sector. In th e public sector the collective agreements are not 
respected as the legitimacy of the signing trad e union is questioned by the other trade unions. 
The tripartite dialogue has recently been reac tivated. The Economic and Social Council needs 
to strengthen its role as a forum for policy dialogue. (See also Chapter 19 — Social policy and 
employment) 
There was partial progress in the area of anti-discrimination policy
. A framework law has 
been enacted which contains a list of grounds of prohibited di scrimination and establishes a 
commission for protection against discrimination.  However the law omits ‘sexual orientation’ 
 
EN 20   EN as grounds for discrimination and the law does not comply fully with the acquis . Moreover 
the law does not endow the envisaged monitori ng and protection mechanism with sufficient 
administrative capacity. The quality of the di alogue on the law was low. The debates in 
parliament were divisive and remarks from civil society and the international community 
were not considered.  
Meanwhile there is growing c oncern about stigmatisation and incidents of discrimination 
against the Lesbian, Gay, Bisexual and Transge nder (LGBT) community. In this context the 
government needs to raise awareness about the need for respect and tolerance of diversity. 
The availability of statistics and other informat ion on direct, indirect and multiple forms of 
discrimination is still very limited. In th is area, preparatio ns are lagging behind. 
As regards property rights , the guarantee for the right to property has been further ensured 
with the establishment of a la nd register for over 97.5% of the country’s territory. The Law on 
denationalisation was amended so that the appe als procedure was transferred from second-
instance committees to the administrative court. This aims to reduce delays in reaching final 
decisions.  
However, the process of returning property c onfiscated during the period of the Socialist 
Federal Republic of Yugoslavia exceeds subs tantially the legal deadlines set. The 
enforcement of restitution claims for which a fina l decision has been ta ken is not satisfactory. 
The land registry office reduced the fees for its services and regularly organised open days for 
the public. The average duration of land registry  procedures was shortened from 45 to 10 
days. The backlog of property dispute proceedings continued to suffer delays. There has again been no progress on returning property of religious communities. 
Overall , whilst social and economic rights  are broadly in place, there was limited further 
progress. The implementation of the strategy against domestic violence has continued. The 
participation of trade unions in the Economic  and Social Committee has been clarified. A 
framework anti-discrimination law has been a dopted but it has important gaps, notably as 
regards sexual orientation. A strategic approach to equal opportunities ne eds to be developed. 
Additional efforts are needed to  implement the juvenile justic e law and the UN Convention on 
the Rights of the Child. 
Respect for and protection of minorities, cultural rights 
In the field of cultural rights , progress was made in the im plementation of the Law on the 
use of languages spoken by at least 20% of the ci tizens. In parliament, implementation of the 
Law on languages went forward with the recr uitment of more skill ed translators and 
interpreters. The Secretariat for the Implem entation of the Ohrid Framework Agreement 
(SIOFA) strategic plan provides fo r additional training for interpreters. The use of Albanian in 
oral procedure continued in plenary and co mmittee sessions and the parliamentary TV 
channel is interpreted into Albanian.  
However, many state institutions as well as local entities have not made progress, and clear 
responsibility for planning and monitoring impl ementation of the language law needs to be 
established. Smaller ethnic communities continue  to face a lack of f acilities for teaching in 
their mother tongue. 
 
EN 21   EN As regards minorities , the Ohrid Framework Agreement (O FA) remains crucial for ensuring 
continued inter-ethnic coopera tion and political stability. Th e legislative framework for 
protecting non-majority communities3 is largely in place. The government has engaged 
constructively in dialogue with the OSCE High Commissioner for National Minorities on 
support for the integration of ethnic communitie s through education. Subsequently, in early 
October the government adopted a strategy on In tegrated Education. This aims to follow a 
balanced and phased approach aimed at raising the overall quality of education, promoting the 
learning of each others languages and increasi ng inter-ethnic interaction between pupils. 
Nonetheless, so far, despite the efforts of th e government the separation of pupils along ethnic 
lines in several schools or  language shifts persists. 
The administrative capacity of SIOFA was slightly increased. Additional staff was recruited, 
including one person transferred from the SEA.  Training was provided to  the newly recruited 
staff. The government’s strategic plan for implementing the OFA over the period 2010-2012 was prepared by SIOFA in close cooperation with the OSCE. It assigns a much greater role to 
the Secretariat in coordinating, promoting a nd monitoring implementation of the Ohrid 
Framework Agreement. This concerns in particul ar integrated education, use of languages and 
decentralisation. The Law on public servants estab lished an obligation to prepare annual plans 
for non-majority communities, which are to be submitted to the Civil Servants Agency. The 
overall number of civil servants from the non-majority ethnic communities was 29% by December 2009. Nonetheless greater efforts are need ed to ensure that re cruitments match the 
needs of the administration.  
However, the political dialogue on inter-ethnic relations was so metimes tense. The content of 
the first national encyclopaedia and the urban plan ‘Skopje 2014’ triggered protests and inter-
ethnic resentment. There were insufficient prep aratory consultations among key stakeholders 
regarding the decision to introduce state language teaching as of th e first year for pupils from 
non-majority communities. This sparked protests  in primary schools by teachers, parents and 
children. The Constituti onal Court annulled the decision to introduce state la nguage teaching 
as of the first year. According to the Constituti onal Court, the Minister’s decision was not in 
line with the Law on primary education of 2008. Th is stipulates that schoolchildren of non-
majority communities are to start learning the state official language as of fourth year. 
Committees for relations among communities were not  set up in all municipalities where they 
are required by law. Their effectiveness contin ues to be limited by po or operational capacity, 
unclear competences and weak status. Their role is still largely unknown by the public and 
their recommendations are often disregarded. In  many municipalities, the committees are not 
functional and their composition does not reflec t the ethnic structure of the local population. 
SIOFA still lacks administrative and strategic pla nning capacities, while the application of the 
human resources and internal cont rol standards are insufficient. Nine years after the signature 
of the Ohrid Framework Agreement the SIOF A has so far not produced a report on its 
activities and the progress achieved in implem enting the OFA. Monitoring and coordination 
of the implementation of the Ohrid Framewor k Agreement among all administrative bodies 
concerned is still weak. Greater efforts are needed to ensure its effective implementation and 
full respect for the spirit of the OFA. Efforts ar e also needed to foster enhanced trust between 
the ethnic communities, especially in  the areas of culture and language. 
                                                
 
3 Albanian, Bosniak, Roma, Serbian, Turkish, Vlach and others. 
 
EN 22   EN The agency for protecting the rights of minorities which represent less than 20% of the 
population is not yet fully operational. In th e absence of clear competences, budget and 
mandate, the agency did not undertake any substa ntial activity or init iative to defend the 
interests of the smaller minorities. 
The representation of the smaller communities, pa rticularly the Turkish and Roma, in the civil 
service still remains low. Planning to ensure gr adual fulfilment of the recruitment targets for 
non-majority communities and a single data collec tion system on fair representation for the 
entire public sector are still to be establishe d. The practice of recruiting high numbers of civil 
servants from non-majority communities irrespec tive of the needs of the public administration 
continued. Reportedly some of thes e civil servants failed to meet the selection criteria, while 
others were not provided with  offices or equipment.  
There was no progress in clarifying the impli cations of the Constitutional Court decision to 
annul some provisions of the Law on use of flags of the communities.   
In September 2010, there were 1,567 refugees/asylum-seekers in the country, of whom the 
vast majority continue to be Roma from Kosovo4. 24 were recognised refugees, 1,015 have 
the right to stay temporarily in the country  under subsidiary protection, 88 were asylum-
seekers and 403 were persons of concern from Kosovo with granted leave to stay. There are 
shortcomings in both asylum adjudication and the judicial review of asylum cases. The latter 
continue to be conducted mainly on procedural aspects rather  than on merits. There have been 
cases of non-compliance with the ‘non-refoulemen t’ principle leading to the deportation of 
rejected asylum-seekers. Roma from Kosovo in  refugee-like situatio ns face particularly 
difficult conditions and continue to have limited access to social services, employment, health 
care, education and adequate housing.  
The number of registered internally displaced persons (IDPs) decreased from 736 in 2008 to 
621 in 2009. The majority of the complaints lodged by IDPs against the state for damages 
caused by the 2001 conflict are still pending in court. 
As regards the Roma, between February 2008 and Apri l 2010, some 3,100 Roma obtained 
personal documents. A limited number of proj ects targeting Roma were implemented. 19 
municipalities signed a memorandum of coopera tion with the Government for implementing 
the activities of the Decade of Roma Inclusion 2005-2015 and the Roma Strategy. Several municipalities adopted local action plans on employment. 
A national strategy on poverty al leviation and social exclusio n has been adopted. Enrolment 
rates of Roma children in secondary and unive rsity education have slightly increased. The 
Cyril and Methodius State University opened  a new section for the Roma language. The 
active labour market measures programme targeting Roma was partially implemented. 
Despite budgetary restrictions the financial support for Roma programmes was maintained at 
the 2009 levels. 
However, implementation of the Roma Strategy and the action plans in the framework of the 
2005-2015 Decade of Roma Inclusion slowed down further The inter-ministerial coordination 
working group on implementation of the Roma strategy met only twice. The new advisory 
body consisting of deputy minister s of four relevant ministries  and a representative of the 
                                                
 
4 Under UNSCR 1244/1999. 
 
EN 23   EN Secretariat for European Affairs was not opera tional. The commitment and cooperation of the 
line ministries remained low. State funds remain insufficient in the light of the challenges. No 
additional staff was allocated to the office of th e Roma minister without portfolio or to the 
unit for implementation of the Roma Strategy.  
Unemployment among Roma increased to 78.5 % compared to around 32% among the general 
population. The low income and high mortality  rates among Roma remained unchanged. 
Housing and living conditions are substandar d. The number of Roma  children attending 
school is low and drop-out  rates continue to be high, particularly those of  Roma girls. Several 
cases of ethnically segregated schools have be en reported. Roma chil dren continue to be 
disproportionately over-re presented in special schools for ch ildren with learni ng disabilities. 
The number of Roma street children con tinues to grow. The Ombudsman for 2009 has 
reported 9 complaints from Roma regarding po lice ill-treatment. However many Roma are 
reluctant to lodge complaints. The intervention of  special police in April at a market in the 
Roma-populated area of Suto Orizari in Skopje,  which led to numerous people being injured, 
has not been investigated. There is no reliable set of statistics on the number of Roma who 
still lack valid personal docum ents. Media often represent Roma in a manner that reinforces 
negative stereotyping.  
Progress was achieved in the area of cultural rights and minorities.  There has been some 
progress on equitable representati on and the governmen t undertook initial step s to foster inter-
ethnic integration in the education system. No netheless, integration of ethnic communities 
remains limited and greater dialogue is needed to foster trust especially in the areas of culture 
and language. Some progress can be reported re garding the rights of Roma. The number of 
persons lacking personal documents was reduce d. However, Roma continue to face very 
difficult living conditions and discrimination. 
2.3. Regional issues and international obligations 
The former Yugoslav Republic of Macedonia continued to cooperate fully with the 
International Criminal Tribunal for the former Yugoslavia (ICTY) . In May 2010, the 
ICTY Appeals Chamber affirmed the acquittal of Ljube Boskoski , a former Minister of the 
Interior, in the Ljuboten case. The Appeals Ch amber upheld the twelve-year sentence of the 
Trial Chamber against Johan Tarculovski, a fo rmer police officer, concerning the same police 
raid in Ljuboten. Of the four cases that the ICTY transferred back to the national authorities, three have reached the domestic court syst em. Two of these cases are still with the 
investigative judge. The third case went to tria l, but has encountered numerous procedural 
obstacles. The fourth case, which relates to the leadership of the National Liberation Army (NLA), who are now senior members of the Demo cratic Union for Integration party (DUI), is 
still with the Office of the Pub lic Prosecutor. Ethnic Albanian pol itical parties assert that all 
the cases are covered by the 2002 Amnesty Law. 
The former Yugoslav Republic of Macedonia st ill maintains the 2003 bilateral immunity 
agreement with the United States granting exemptions from the jurisdiction of the 
International Criminal Court. This does not comply with the EU Common Positions on the 
integrity of the Rome Statute or the relate d EU guiding principles on bilateral immunity 
agreements. The country needs to align with the EU position. 
Regional cooperation and good neighbourly relations  f o r m  a n  e s s e n t i a l  p a r t  o f  t h e  
country's process of moving towards the Eur opean Union. The country has continued to 
actively participat e in regional initiatives, including the South-East European Cooperation 
 
EN 24   EN Process (SEECP), the Regional Cooperation C ouncil (RCC), the Central European Free Trade 
Agreement (CEFTA), the Energy Community Treaty, and the European Common Aviation 
Area Agreement (ECAAA). The country held th e 2010 Presidency of the Energy Community. 
The country continued to contribute to the EU  ALTHEA mission in Bosnia and Herzegovina. 
A trilateral agreement for the protection and sust ainable development of the Prespa Lake area 
was concluded by the ministers of e nvironment of the littoral states. 
The former Yugoslav Republic of Macedonia plays a constructive role as regards bilateral 
relations with neighbouring Member States and other enlargement countries. Its 
relations remained good with Albania , Bosnia and Herzegovina , Croatia , Montenegro  and 
Turkey . Several reciprocal high-le vel visits involving these c ountries took place. With 
Albania , an agreement was reached to establish two joint police operative teams to fight 
organised crime. Furthermore, a protocol of cooperation between the Ministries of Foreign 
Affairs and a protocol of c ooperation between the diplomatic academies were signed. As 
regards Bosnia and Herzegovina , agreements on the avoidance of double taxation and on 
cooperation in the area of education and scienc e are being developed. The Parliament of the 
former Yugoslav Republic of Macedonia issued  a declaration on Sreb renica. The bilateral 
relations with Croatia  are close as evidenced by regular bi lateral visits at the highest level. 
The country has a trade surplus w ith Croatia, which continues to be one of its most important 
trading partners. With Montenegro , a memorandum of cooperation in the area of defence was 
signed. Relations with Turkey  have been further strengthened in the economic, cultural and 
diplomatic fields.  
Relations with Serbia  remained overall good in spite of  deepening relations with Kosovo5. 
Several high-level visits invol ving the authorities of  both countries took place. The President 
of Serbia visited Skopje in June 2010. Serbia maintains its policy of non-recognition of the 
border demarcation agreement between the former Yugoslav Republic Macedonia and Kosovo. In September the countries signed a bila teral agreement to facilitate traffic over the 
local border crossing points.
 Unresolved issues concerning relations between the Orthodox 
churches in the two countries remain. 
The demarcation of the former Yugosla v Republic of Macedonia's border with Kosovo  was 
completed. Full diplomatic relations with Ko sovo were established. Agreements on economic, 
defence and police cooperation were signed, the latter envisaging joint police patrols at the 
shared border.  
Relations with Greece  continued to be close, notably in the economic sphere. Relations 
between the two countries conti nue to be adversely affected by the unresolved name issue. 
The country remains engaged in talks under the auspices of th e UN in order to resolve it. 
Actions and statements which could negativ ely impact on good neighbourly relations should 
be avoided. The direct meetings at the highest political levels are positive steps, although this 
momentum has not yet led to concrete re sults. Maintaining good neighbourly relations, 
including a negotiated and mutua lly acceptable solution to the name issue, under the auspices 
of the UN, remains essential. 
Relations with Bulgaria  have remained good. Several high -level meetings took place. An 
agreement on friendship and good-neighbourly rela tions between the two countries is being 
                                                 
5 Under UNSCR 1244/1999. 
 
EN 25   EN discussed, and there is agr eement to renew the triennial memorandum on cooperation on EU 
integration. Ethnicity-based issues  are a continued area of concern. 
Overall , the former Yugoslav Republic of Macedonia is an active partner in the region. 
Bilateral relations with neighbour s further improved, but relations with Greece continue to be 
affected by the unresolved name issue. 
3. ECONOMIC CRITERIA  
In examining economic developments in the former Yugoslav Republic of Macedonia, the 
Commission’s approach was guided by the conclusions of  the European Council in 
Copenhagen in June 1993, which stated that me mbership of the Union requires the existence 
of a functioning market economy and the capacity  to cope with competitive pressure and 
market forces within the Union. 
3.1. The existence of a functioning market economy 
Economic policy essentials A broad consensus on the fundamental features  of the country’s economic policy has been 
maintained. As in previous years, the country is  participating in the EU pre-accession fiscal 
surveillance procedure. It presented its f ourth Pre-accession Econ omic Programme in 
February 2010 and submitted its fifth Fis cal Notification in May 2010. However, the 
preparation, submission and qual ity of the information provide d were impeded by constraints 
on administrative capacity. Cooperation with the World Bank and the IMF has continued. 
Furthermore, a number of medium-term strategi es define the policy framework, such as the 
public investment programme for 2010-12, the fiscal strategy 2010-2012 and the public debt 
strategy for 2010-12. Structural reforms continued in a numbe r of areas, although progress 
was slower than in the past. Overall, a broad political consensu s on the fundamentals of 
economic policy has been maintained.  
Macroeconomic stability 
In 2009 the economic output in the country dec lined by 0.8% The impact of the financial 
crisis on the economy has remained relatively limited so far, partly due to the financial 
sector's limited exposure to toxic assets, but al so to the stable priv ate capital inflows and 
resilient domestic demand. During the firs t three quarters of 2009, GDP declined by 1.7% 
compared to the same period a year before , while the fourth quarter of 2009 saw positive 
year-on-year growth of 1.6%. In the first qu arter of 2010, the output level was about 1% lower 
than a year before, while in the second quarter output rose by 0.4% year-on-year. Compared 
to the first half year in 2009, the output level was still 0.3% lower than a year before. The 
decline in private and public demand remained moderate, wh ile investment dropped by nearly 
20%. The reduction in domestic demand was acco mpanied by a similar decline in imports, 
while exports rose by 15%. Several indicator s, such as industrial production, point to 
continued weak demand for manufactured product s. Average per capita GDP remained stable 
in absolute terms during, howev er, in relation to the EU-27 av erage it improved from 34% of 
the EU-27 average in 2008 to 35% in 2009. Overall , after a moderate decline in economic 
activity during the first three quarters of 2009, indications of a recovery in 2010 are still 
unclear.   
 
EN 26   EN External balances improved during the reportin g period, as a result of declining imports, 
improving exports and a recovery  of private capital inflows.  The current account deficit 
declined, from nearly 13% of GDP in 2008 to  about 7% in 2009 and 3.8% of GDP on an 
annualised basis in mid 2010. In the first half  of 2010, commodity imports increased year-on-
year by 6.5%, while export revenue s rose by 23%. As a result, th e trade deficit narrowed from 
24.5% of GDP in the first half of 2009 on an an nualised basis to22% of GDP in the first half 
of 2010. The inflow of private tr ansfers increased from  11.4% of GDP in the first half of 2009 
to 18.8%. FDI inflows remained low, at aroun d € 115 million or annu alised 3.7% of GDP. 
Foreign reserves recovered from marked losses in early 2009, reaching coverage of expected 
imports of close to 5 months. Foreign debt  increased, mainly due to private sector 
intercompany lending but also high er public sector borrowing abroad. Overall , external 
imbalances improved due to both, shrinking im ports reflecting weakening domestic demand and 
improving external demand. Private capital inflows remained strong.  
Unemployment in 2009 remained very high at 32.2% and continued to  increase in 2010. The 
overall labour market situation was stable  in 2009, while the first half of 2010 saw a 
deterioration, with a year- on-year employment decline by  1%. The employment decline 
reflects a significant drop in officially register ed employment in agriculture (by nearly 5% 
compared to a year before), partially compensated by a similar increase in public sector 
employment (mainly in education and commun ity services). About 20% of the unemployed 
are between 15 and 24 years old. Unemployment in this age group has remained very high at 
around 55% (June 2010). Even though the existence of a substantia l informal sector leads to 
overestimation of actual unemployment, very hi gh unemployment remains an important issue, 
in particular among young pe ople and the less educated. Overall , the situation in the labour 
market started to deteriorate in early 2010. Ho wever, increases in public sector employment 
partially offset the negative impact of the gl obal financial crisis on the labour market. The 
level of unemployment remains very high, in particular among the young and less educated.  
Monetary and exchange rate policy have re mained stability-oriented. The Central Bank 
managed to maintain the de facto peg. Sin ce October 2009, the Central Bank has lowered 
interest rates for short-term Central Bank b ills from 9% to 4.5%, ta king advantage of the 
recovery of confidence in the stability of the exchange rate and tryi ng to support the economy 
through lower interest rates. Private-sector weight ed interest rates declin ed after their peak in 
the last quarter of 2009. Rates for denar loans declined  from 10.3% in September 2009 to 
9.6% in May, while the rates for denar deposits declined from 7.5% in December to 7.1% in 
May. Spreads continued to narrow slightly, from 2.8% in autumn 2009 to 2.5% in May. The speed of credit growth dece lerated towards end-2009, but has started to accelerate again. 
Overall , the exchange rate policy and monetary policy have remained sound and stability-
oriented.   
Inflation in 2009 was negative at -0.8 %. After a strong rise in the ov erall price level in 2008, 
consumer prices turned negative in 2009 main ly due to lower food prices. . In 2010, CPI 
inflation remained moderate, with a year-on- year increase by 1.1% during the first nine 
months. As in 2009, the main contribution to lo w inflation came from declining food prices, 
which were 0.9% lower on average during the firs t nine months of 2010, while prices for fuel 
and lighting rose by 8.8%, partly  due to higher costs of imported energy. Prices for housing 
increased by 6.8%. Core inflati on, which excludes the impact of  energy and food prices on the 
overall price level, was 2.6% in 2008, but de clined to 0.3% in 2009. In 2010, core inflation 
has remained close to zero. 
 
EN 27   EN The overall fiscal policy stance  in late 2009 and the first half  of 2010 has been oriented 
towards cushioning the impact of the global financ ial crisis, while trying to meet previously 
announced fiscal deficit targets, i.e. 2.8%  of GDP in 2009 and 2.5% in 2010. In 2009, the 
authorities were confronted with a 6% declin e in revenues, instead of an expected 6% 
increase. Thus, the government had to abandon overly optimistic spending plans and to cut 
total spending by 0.5%, instead of boosting it by 10% as envisaged in  the original 2009 
budget. As a percentage of GDP, total sp ending remained unchanged (at around 35% of 
GDP), while revenues as a share of GDP declin ed by almost 2 percenta ge points, leading to 
an increase in the deficit from 1% of GDP in 2008 to 2.7% in 2009. Despite declining 
revenues, the government kept to its original plan of lowering direct taxes and also granted 
tax reliefs to some public and a number of private enterprises.  Furthermore, the authorities 
increased social transfers and subsidies. These additional measures amounted to slightly more 
than 1% of GDP and supported both, the disposable  income of househol ds but also some 
chronically troubled companies. However, in or der to meet the original deficit target, the 
authorities reduced capital sp ending by the same amount. Thus, while overall spending has 
remained largely unchanged, the quality of spendi ng has deteriorated. This is due to increased 
transfers at the cost of more medium-term orie nted spending, such as capital investment in 
infrastructure or education. In the first half of 2010, fiscal balances have remained on track 
with the end-year deficit target of 2.5% of GD P. However, in recent months, the government 
seems to have accumulated substantial payment arrears, which strain the private sector's 
liquidity and could translate into a significantly  higher accrual based de ficit. In order to 
finance the deficit, the government resorted to reserves and intern ational lending, which 
resulted in an increase of public debt by 3 percentage points in 2009, from 21.4% of GDP at 
end-2008 to 24.6% by end-2009. Fiscal  decentralisation continued, with further measures to 
strengthen the fiscal viability  of indebted municipalities. Overall , fiscal policy tried to support 
disposable income but maintained internal and ex ternal balances. This helped to stabilise the 
economy. In the medium term, the government’s recent approach of lowering revenues while 
maintaining or increasing sp ending is not sustainable.   
The overall macroeconomic policy mix remained st ability-oriented. In re sponse to the crisis, 
monetary conditions were gradually relaxed, ta king into account the country’s policy of a de 
facto peg to the euro. Public spending was larg ely maintained despite a significant drop in 
revenues. This helped to stabilise dispos able income and domestic demand. However, 
increases in transfers and subsidies were mainly  financed by cutting capital spending, which 
had a negative impact on the quality of public sp ending. Furthermore, lack of discussion with 
the country's stakeholders had a negative be aring on the quality of the measures taken. 
Overall , the general policy mix improved, trying to respond to the negative impact of the 
crisis, while keeping in mind the need to ma intain macroeconomic balances. However, the 
quality of public finances deteriorated and th e issue of high unemployment, in particular 
among the young, remains a major policy challenge.  
Interplay of market forces 
Privatisation is largely completed and the econo my is mainly driven by market forces. The 
private sector accounts for 81% of total output  and 78% of total empl oyment. After a marked, 
mainly crisis-related increase in the number of companies with state shares in 2008 and 2009, 
the number of companies with state shares remain ed stable at close to 70. The value of state 
capital in local companies amounts to 13% of  GDP. The majority of state capital, - 78.5% - is 
concentrated in five companies,  mainly public utili ties, such as electr icity production and 
transmission, where the state is majority owne r, and telecommunications, where the state is a 
minority owner.. The practice of setting electricit y prices below full cost recovery continues 
 
EN 28   EN and leads to distortions in the domestic price structure. Overall , the role of state ownership is 
low and mainly limited to telecommunication, energy and public services.  
Market entry and exit 
The government has continued improving legi slation on market entry and exit. The 
implementation of the second phase of establis hing a ‘one-stop-shop’ for business start-ups 
has continued. The costs of regist ration have been reduced furthe r. The process of simplifying 
regulation, the so-called business guillotine, has entered its third phase, with a particular 
emphasis on improving the regulation-related dialogue with the business community. The 
process of closing down companies, overdue to  be wound up, has continued. The number of 
newly created enterprises was 11% lower in the first eight months than  a year before, while 
the number of new bankruptcies was 18% higher th an a year before. However, the number of 
enterprises deleted from the tr ade registry declined by only 5.8%. The backlog in bankruptcy 
cases has been further reduced. Overall , barriers to market entry are rather low and some 
further progress has been achieved in reduci ng entry barriers and improving market exit. 
Legal system 
The legal system for a functioning market economy is largely in place. The registration of real 
estate ownership rights is practically comp leted, compared to 90% in September 2009. The 
National Electronic Registry (ENER), which pr ovides information on draft legislation and a 
platform for stakeholder consultation, and th e Insurance Supervisory Agency (ISA) have 
started operating. Furthermore, a private credit bureau has been established and the Company 
Law and the Litigation Law have been ame nded. However, no progress has taken place on 
speeding up legal procedures, as the entry into force of the amendments to the Law on contract enforcement has been post poned for another year, to July 2011 . Despite improved 
legal and financial independence of regulator y and supervisory bodies, the administrative 
capacities and the enforcement record of some of those institutions, such as the State Anti-
Corruption Commission (SACC), or  the energy regulator, continue to be limited. As a result, 
some regulatory and supervisory ag encies are not yet fulfilling their role as guardians of the 
rule of law and providers of a level playing field for all economic operators. Overall , some 
progress in improving the legal syst em has been achieved, such as further clarification of real 
estate ownership rights. However,  weaknesses in the rule of la w, notably in the judiciary, 
which is characterised by slow  procedures insufficient res ources and unreliable contract 
enforcement, and prevalent corruption continue  to have a negative effect on the business 
environment. 
 
Financial sector development 
The financial sector has remained stable and has so far weathered well the financial market 
turbulences. The value of financial assets recove red to pre-crisis levels, increasing from 66% 
of GDP end 2009 to 68.3% in mid 2010. The level of  financial intermediation is relatively 
low, but recovered marginally, with the shar e of loans increasing from 42.7% of GDP end 
2009 to 43.7% in mid 2010 and deposits risi ng from 46.2% end 2009 to 48.6% in mid 2010. 
Deposits continue to be the s ector’s main source of liquidit y. The coverage of loans through 
deposits is still above 100. The volume of loans has started to recover since spring and was in 
mid-2010 some 3-4% higher than a year before. Howe ver, the rate of incr ease is significantly 
lower than before the crisis. The low level of financial intermediation in combination with a cautious lending policy of the banking sector helped to contain th e impact of the global 
financial crisis. However, the high thresholds for companies, in particular SMEs, to get access 
 
EN 29   EN to credits also constrain the private sector's  growth potential. The capitalisation of bond and 
stock markets recovered in the second half of 2009, but ha s been declining since the 
beginning of the year. Currently, the value of the capital market accounts for about 30% of 
GDP (stocks 23% and bonds 7%), whic h is the level recorded in 2005.  
The structure of the sector has remained larg ely unchanged. The share of  state ownership in 
the sector remains low, at 7% of the sector’s a ssets. The main state asset is the majority share 
in the country’s only development bank and a lim ited number of remaining minority shares in 
private banks. There are 18 banks  and 9 savings houses operating in the mark et, with the five 
largest banks accounting for three quarters of the sector’s assets and deposits. The efficiency of financial intermediation has continued to in crease slightly, as indicated by the continued 
slight decline in the spreads between lending and borrowing ra tes, from some 3 percentage 
points in September 2009 to 2.5 percentage point s in mid-2010. Profitability in the sector has 
remained low in the aftermath of the crisis: for example, the return on assets was 0.4% in mid-2010, compared to 0.5% the year before. The si ze of the non-banking financial sector has 
remained small, at 5% of the total sector’s f unds. However, regulation and supervision of this 
sector has improved, with closer supervision of the stock excha nge through the Securities and 
Exchange Commission and the establishmen t of an Insurance Supervisory Agency. 
Despite continued uncertainty, the stability of th e sector has been maintained, benefiting from 
the stricter regulatory standards and stronger supe rvisory capacity introduced in the last few 
years. However, the exposure of the banking se ctor to non-performing lo ans deteriorated in 
the first half of 2010, increasing to 10.1% of loan s, compared to 8.8% in the last quarter of 
2009 and 7.5% a year before. Loans with a forei gn currency component remained stable at 
54% of total loans. The capital isation of the banking sector re mained high, with an average 
capital adequacy ratio  of 16.5% in mid 2010. Large bank s reported an average capital 
adequacy ratio of 14.3% and sm all banks as high as 43.4%. Overall , the financial sector 
weathered the international financial crisis relatively well, benefiti ng from low exposure to 
toxic assets and a cautious lending policy. Howe ver, financial intermediation has remained 
low, impeding more dynamic growth of the private sector, in pa rticular of SMEs.  
3.2. The capacity to cope with competitiv e pressure and market forces within the 
Union 
Existence of a functioning market economy Overall, macroeconomic stability has been ma intained despite the ne gative impact of the 
global financial turbulence. Despite some improve ments in the area of market entry and exit, 
and with respect to the legal system, the business environment continues to be impaired by the weak rule of law, notably by a slow judiciary and weaknesses in contract enforcement, market 
regulation and supervision. Structural unemplo yment remains very hi gh. Predictability of 
market conditions has suffered from an increa sed number of ad hoc changes to the legal 
environment.  
Human and physical capital 
The authorities kept up efforts to improve the physical infrastructure for education and have 
taken measures to provide higher education to a greater number of persons, for example by 
establishing decentralised tert iary education facilities. Budge tary allocations for education 
were at around 5% of GDP in  2009, but were slightly redu ced in the 2010 supplementary 
budget. Like last year, a signi ficant share of spending has be en on renovation and construction 
of school buildings and the purchase of IT equi pment. The number of teachers in primary and 
 
EN 30   EN secondary schools has been further increased, in particular in the area of secondary education 
and foreign languages. However, further effort s are required to improve the quality of the 
provided education. Despite continued efforts, th e overall level of education and training of 
the labour force is still relatively low. In particular, the skill mismatch still is substantial. There remains significant room for improving the efficiency of public spending on education 
and for raising the quality of education. Overall , measures to improve the level of 
qualification have continued. However, the st ill low level of education requires further 
sustained  efforts in order to improve the country’s human capital endowment. 
The country’s capital endowment has remained rela tively low and its qual ity is still suffering 
from previous periods of underinvestment. Some further progress has been made on 
improving the transport infrastructure. However, as a result of crisis-related uncertainty and 
fiscal constraints, private dom estic investment has declined sharply during the last year. 
Furthermore, continued low level of legal certa inty had a negative impact on inflows of FDI, 
which in 2009 and the first half of 2010 have remained low, at 3.7% of GDP. In some cases, 
persistently slow lega l procedures, fragmentation of respons ibilities between central and local 
governments and an ongoing dispute related to investor protection continue to be an 
impediment to FDI. Spending on strengthening the knowledge-based economy has remained 
low. Capacity if administration to serve the businesses remained impeded by frequent staff 
reallocations and time consuming procedures. Overall , the country’s cap ital stock continued 
to be low, indicating a low attractiveness of th e country for foreign capital. Infrastructure 
continues to require repair and modernisation.  
Sectoral and enterprise structure 
The focus of economic activity has continued to move away from manufacturing towards 
services. However, in the past two years, the public sector was the only sector increasing 
substantially both, its share in employment, but also its share in terms of output generation. 
Financial intermediation continued to be the mo st important and growi ng sector with about 20 
% of GDP, followed by public admi nistration which grew by almost 1 percentage point to 
about 19% of GDP while agricu lture continued to decrease to about 17%. In terms of 
employment, services in partic ular public administration and tr ade grew in importance. In 
terms of enterprise creation the trading sector was most dynamic. The informal sector remains 
large, although there are indications that it has been reduced, for example by improving tax 
collection, lowering the tax burden, reforming colle ction of social security contributions and 
providing financial incentives for registration. Th e informal sector is fuelled by weaknesses in 
tax and expenditure policies, as well as in law enforcement, including the fight against 
corruption and organised crime. It reduces th e tax base and the efficiency of economic 
policies. Gas and electricity markets rema in dominated by single suppliers, undermining 
effective competition. In the sectors of telecommunication and transport, no significant structural change has taken place. Overall , structural change towa rds diversification and 
activities with higher value-added has remained limited. Competition in network industries remains constrained by dominant incumbent supp liers. The large informal sector remains an 
important challenge.  
State influence on competitiveness 
Direct state influence on competitiveness has in creased as a result of more frequent state 
interventions to shield  troubled companies from the impact  of the interna tional financial 
crisis. However, the overall level of systematic state intervention is still low. Energy prices 
still do not cover the full costs, which leads to di stortions in relative prices and to substantial 
 
EN 31   EN losses on the part of state-owned energy providers. Official data point to a low level of state 
aid, less than 1% of GDP. However, this figure is not comparable to state aid data compiled in 
accordance with EU standards. The institu tional setup for monitoring state aid and 
competition issues is in place. However, the ag ency’s capacity to guard a level playing field 
among market participants is limited. Overall , state influence on competitiveness remained 
low, although state interventions were  more numerous than in the past.   
Economic integration with the EU 
The country has a small, open economy, with tota l trade in goods and services accounting for 
close to 100% of GDP (2009). However, as a resu lt of the crisis, the le vel of both exports and 
imports has declined. Trade integration with the EU is advanced, with currently about 62% of 
all exports being directed to and about 53% of  imports originating from the EU-27. CEFTA is 
the country’s second most important trading pa rtner, with about 31% of exports and about 
12% of imports. The export structure continues to be highly concentrated on a limited range 
of products, with textiles and clothing acco unting for about 24% of total exports and 
manufactured iron products for 26%. In terms of FDI, the EU is the country’s main investor, 
accounting for about 60% of total FDI inflows. Overall , trade integration with the EU is well 
advanced, but exports remain concentrated on a few price-sensitive products.  
International price competitiveness remained unchanged. The exchange rate against the euro 
has remained stable in nominal terms.  
4. ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP  
This section examines the former Yugoslav Re public of Macedonia's ability to assume the 
obligations of membership – that is, the acquis as expressed in the Tr eaties, the secondary 
legislation and the policies of the Union. It also analyses th e former Yugoslav Republic of 
Macedonia's administrative capacity to implement the acquis . The analysis is structured in 
accordance with the list of 33 acquis chapters. In each sector, the Commission's assessment 
covers progress achieved during the reporting period and summarises the country's overall 
level of preparations.  
4.1. Chapter 1: Free movement of goods 
Some progress can be reported as regards general principles . Implementation of the action 
plan for achieving compliance with Articl es 34 to 36 of the TFEU has started.  
There has been good progress in the area of horizontal measures . A comprehensive strategy 
with milestones for implementing the acquis for the relevant horizontal institutions has been 
adopted. Further separation of the regulatory, standardisation, accred itation and conformity 
assessment functions has been ensured through so me of the legislation adopted. The number 
of independent bodies for carrying out confor mity assessment activities has increased. 
However, the strategy for full alignment with the acquis in the area of  horizontal measures  is 
yet to be implemented. The Law on general product safety is to be revised in order to fully 
comply with the 2008 horizontal acquis  on harmonised products. 
The Institute for standardisation (ISRM) continued working towards fulfilling the conditions 
for full membership of the European Committee for Standardisation (CEN) and the European Committee for Electrotechnical Standardizat ion (CENELEC). The pace of adoption of 
European standards (ENs) has accelerated. By  October 2010, the ISRM had adopted 15,308 
 
EN 32   EN standards, of which 13,707 are European stan dards. The newly adopted standards relate 
mainly to the areas of ferrous and non-ferrous  metallurgy, machinery, medicinal products and 
services, construction products and oil deriva tives. A total of 3,477 national standards are 
harmonised European standards. The ISRM ha s identified about 11,700 potentially conflicting 
standards, of which 3,146 have already been withdrawn. .  
Four new technical committees were esta blished, bringing the total number to 36. 
Membership of the ISRM assembly increased to 81 standardisation stakeholders and 7 government representatives. The administrative capacity  of the institute was strengthened by 
recruiting two new members of staff, making a total of 21. The ISRM published a catalogue 
of national standards.  
The Ministry of Economy designate d a number of bodies to carry out conformity assessment  
activities.  
The adoption of the new Law on accreditation  ensured further alignment with the EU acquis.  
The number of staff and experts working for th e Institute for Accreditation (IARM) increased 
to 15 full-time employees, 16 lead assessors, 64 technical assessors and 44 experts. By 
October 2010, the IARM had accredited a tota l of 55 conformity assessment bodies and 
withdrawn 9 accreditations. The procedure fo r signing multilateral agreements covering 
testing laboratories, inspection bodies and product certification bod ies with European 
cooperation for Accreditation (E A) started. The IARM signed co-operation agreements with 
the accreditation body of Bo snia and Herzegovina.  
In the area of metrology,  amendments to the Law on metrology and the Rulebook on 
measuring instruments were adopted, en suring further alignment with the EU acquis . The first 
two reference standards of the Bureau of Me trology, for volume of flow and for measuring 
unit for mass, were recognised as national standards. The Bureau acquired full membership status with the European Asso ciation of National Metrology In stitutes (EURAMET). In July 
2010, the Government adopted a strategic develo pment plan for the Bureau of Metrology and 
for the metrological infrastructure for 2010-201 2. The procurement of new equipment for 
laboratories for temperature, mass, pressure, time and frequency improved the institutional capacity of the Bureau. However, no laboratorie s have been accredited yet and they are not 
yet adequately equipped to enable effective operation of the Bureau. Moreover, the Bureau’s 
staff has been reduced by three employees. 
Market surveillance  remains weak. The Law on market surveillance was enacted, providing a 
legal framework and coordination structure for cooperation between all state bodies in charge 
of market surveillance. Additi onal measures are still needed for further alignment with the 
acquis . The State Market Inspectorate (SMI) recruited 5 additional market inspectors in the 
product safety unit, bringing the total to 10 inspectors. The SMI and the State Technical 
Inspectorate still face difficulties related to th eir wide scope of responsibilities, limited 
funding, and insufficiently trai ned staff to conduct compre hensive checks on technical 
compliance of products.  
Preparations in the area of hor izontal measures are advanced. 
Progress has been good in the area of Old Approach product legislation . A number of 
rulebooks transposing the relevant acquis  related to medicinal products, chemicals, cosmetics, 
textiles and motor vehicles entered in to force. Their alignment with the acquis  remains to be 
confirmed. Preparations in th e area of Old Approach produc t legislation are advancing. 
 
EN 33   EN There has been progress in the area of New and Global Approach product legislation . A 
number of rulebooks relating to construction products, machinery, and medical devices came 
into force. Their alignment with the acquis  remains to be confirmed. In the area of New 
Approach legislation the prepara tions are moderately advanced.  
Progress can be reported in the area of procedural measures . The Law on testing and 
marking of firearms and ammunition and seve ral rulebooks regulating the movement of 
firearms, transposing the relevant EU directives , have been adopted. Th eir alignment with the 
acquis  remains to be confirmed. Cooperation betw een the various competent authorities in 
charge of cultural goods resulted in seve ral criminal charges being pressed and the 
confiscation of the illegally traded goods. Prepara tions in the area of procedural measures are 
moderately advanced. 
Conclusion 
There has been good progress in the area of free  movement of goods. Part of the horizontal 
and sector acquis  has been transposed. Atte ntion needs to be paid to  effective implementation 
of the newly adopted legal acts. The administ rative capacity of the market surveillance 
authorities is still insufficient to ensure the enforcement of technical legislation. Full 
membership and effective exchange of informati on with the relevant EU bodies are yet to be 
ensured. 
4.2. Chapter 2: Freedom of movement for workers 
There has been little progress in the area of access to the labour market . Amendments to the 
Law on employment of foreigners simplified th e procedures for issu ing work permits. A 
guidebook for visas and work permits of forei gn nationals was published. Activities for the 
development of a central database of foreign na tionals are advancing. In  order to provide EU 
citizens with access to the public  service, the nationality condition of the Law on public 
servants will have to be adjusted. Preparat ions in this area are at an early stage. 
Little progress can be reported with regard to  the country’s particip ation in the European 
employment services network  (EURES) . An action plan outlining the measures and activities 
for participation in EURES has been prepared. Preparations in the area of EURES remain on 
track. 
There has been no progress in the area of coordination of social security systems . The 
capacities of the public authorities to coordina te social security schemes need to be 
strengthened. Preparations in this  area are moderately advanced. 
There has been progress in the area of the European health insurance card . Agreements  on 
applying the card were concluded with Luxembou rg and the Netherlands, bringing the total to 
six. Preparations in the area of the European he alth insurance card are at an early stage.  
Conclusion 
Little progress can be reported in the area of freedom of movement of workers. The 
institutional capacity remains an impediment. In  this area, the country  is not yet prepared. 
 
EN 34   EN 4.3. Chapter 3: Right of establishment and freedom to provide services 
There was little progress in the area of the right of establishment . Further efforts were made 
to simplify the procedures for granting authoris ations and to increase their transparency and 
objectivity. However, some decisions are delaye d or reversed. The licensing regime under the 
amended Law on Construction is not harmonised with the acquis . Preparations in the area of 
the right of establishment are on track. 
Some progress was made in the area of the freedom to provide cross-border services . The 
action plan for harmonisation with the Services  Directive has been adopted. Some efforts 
were made to overcome the gaps in coordina tion among the authorising bodies. The Ministry 
of Economy was designated as the coordinatin g body. However, foreign operators providing 
cross-border services are still not treated differe ntly than operators providing services through 
a permanent establishment in the country. The nationality requirement is still present in 
several sectors of services. The administrative capacity of the various authorising bodies 
remains unsatisfactory. In the area of cross-bord er services the country  is not yet prepared. 
Progress can be report ed in the area of postal services . The Postal Agency continued with 
implementation of the postal legislation and a dopted relevant implementing legislation. With 
the new Postal Law a clear timetable was establ ished for full market opening. Following the 
reduction of the reserved area to items wei ghing above 50 grams, several new operators 
entered the market. Preparations and alignment with the postal acquis , especially regarding 
the first and second Postal Directives, are well  advanced. However, in  order to bring the 
national postal legislation into line with th e third Postal Directive further legislative 
amendments will be needed. The status and future operating arrangements for restructuring of the universal postal service provider remain to be clarified. Preparations  in the area of postal 
services are on track. 
Little progress has been made regarding mutual recognition of professional qualifications . 
An action plan for upgrading the system for mutual recognition has been adopted. The coordinating group comprising the sectoral in stitutions responsible for implementing and 
enforcing the mutual recognition of professiona l qualifications became operational. However, 
the legislation still does not distinguish be tween academic and professional qualifications. 
The administrative capacity of the information centre for recognition of foreign academic 
diplomas within the Ministry of Education and Science remained insufficient. Alignment with 
the Directive on Recognition of Professional Qualifi cations is outstandi ng. Alignment with 
the Lawyers’ Directives (77/249/ EC and 98/5/EC) has yet to be achieved. Preparations in the 
area of mutual recognition of professiona l qualifications are at  an early stage. 
Conclusion 
Overall, preparations in the area of the right of  establishment and freedom to provide services 
are moderately advanced, more particularly in the area of postal services. The level of coordination among the various bodies responsible for authorising cross-border services is not 
sufficient. The preparations for mutual recognit ion of professional qual ifications are at an 
early stage. 
 
4.4. Chapter 4: Free movement of capital 
There was no progress in the area of capital movements and payments . The country already 
met the requirements of the first stage of the Stabilisation and Association Agreement (SAA) 
 
EN 35   EN in 2008. The decision to move to the second stage of the SAA has to be adopted by the 
Council. There are restrictions on residents rega rding portfolio investments. EU citizens are 
not allowed to purchase agricultural land. The ceilings on the amounts of transfers that non-
residents can perform through their local currency and foreign exchange accounts remain. This represents an effective barrier to the fr ee movement of capital. Th e restrictions imposed 
under the Law on foreign exchange operations on the amount of cash that may be carried across the borders have not been removed. Nati onals are still not allowed to buy shares in 
non-domestic companies, open accounts in forei gn banks, or purchase real estate abroad. 
Preparations for future liberalisation in the area of capital movement s and payments have 
been set out and are conditional on trans ition to the second stage of the SAA. 
Some progress was made in the field of payment systems . The amendments to the Law on 
fast money transfers lowered the entry barriers to the money remittance market, and now allow some competition
. Alignment with the Payment Services Directive remains to be 
achieved. Most of the charges for cross-border electronic payment transactions are still 
disproportionate to those for dome stic electronic payment trans actions. In the area of payment 
systems, the country partially meets its targets. 
There was some progress in the fight against money laundering . The Law on prevention of 
money laundering and financing of  terrorism has been further amended, taking into account 
the recommendations of the last Moneyval Mu tual Evaluation Report, with the aim of 
transposing the third Anti-Mone y Laundering Directive;  alignment remains to be confirmed. 
The Office for Prevention of Money Laundering and Financing of Terrorism (OPMLTF) has 
issued additional implementing legislation on th e reporting requirements for and the analysis 
and processing of suspicious transactions. Th e awareness of the repor ting institutions has 
further increased, and the Office has developed an electronic system for the exchange of encrypted information and improved its statis tics. However, the number of reports on 
suspicious transactions in the reporting pe riod dropped by 20%. Reporting is still uneven and 
most suspicious transaction reports continue  to come from banks. There is regular 
communication between the OPMLTF and the inve stigating and prosecuting authorities on all 
cases of suspicious transactions or other fi nancial criminal acts that are analysed by the 
Office. The OPMLTF signed memoranda of understanding on shari ng information with 
counterparts in two more EU Member States (L atvia, Estonia), and f our non-EU jurisdictions 
(Norway, San Marino, Argentina, Canada), br inging the total number of MoUs to 37. The 
enforcement record regarding court decisions on money laundering and their execution is not 
satisfactory. In 2009 there were only 2 i ndictments concerning 12 persons and only one 
conviction. The number of employees in the Office has decreased, but most of them are 
permanently employed. The legislative pr eparedness, administrative capacity, and 
enforcement record in combating mone y laundering are moderately advanced. 
Conclusion 
There was some progress in the ar ea of free movement of capital, es pecially in the field of fast 
money transfers and money laundering. However, th ere are restrictions on short-term capital 
movements and on cross-border payment transfers.  The preparations in the area are on track. 
4.5. Chapter 5: Public procurement 
Little progress has been made as regards general principles . The Public Procurement Law 
was amended to be harmonised with the Crimin al Code and several pieces of legislation 
 
EN 36   EN implementing the law were adopted. The Law on C oncessions and Public-Private Partnerships 
is not aligned with the acquis .  
With regard to administrative capacity, the st aff of the PPB was increased to 17 people. The 
PPB adopted a strategy for the development of the public procurement system for 2010-2012 
which confirms the maturity of that institut ion in developing, piloting and monitoring the 
country's public procurement policy. The tr aining centre of the PPB became operational . The 
PPB’s cooperation with the State Audit Offi ce (SAO), the State Commission for Prevention 
of Corruption and the Commi ssion for Protection of Compet ition continued. Statistics on 
corruption cases related to public procuremen t handled by the courts are still missing. The 
trend in tender cancellations and failures c ontinued. There is still insufficient awareness 
regarding conflicts of interest, ethics and an ti-corruption in procurement procedures. The 
capacity of the unit responsible for concessions in  the Ministry of Economy is not sufficient to 
deal with large-scale projects and its cooperati on with other institutions  engaged in the public 
procurement system remains insufficient .  
As regards general principles, th e country is generally on track. 
Some progress has been made re garding transparency in the award of public contracts . E-
procurement became mandatory as of January 2010 for at least 30% of  the total estimated 
value of all public contracts. The integrati on of the two existing el ectronic procurement 
systems has been achieved. However, the awaren ess of the contracting authorities regarding 
the criterion of the economically  most advantageous tender is  insufficient. Furthermore, 
works have often started and even been completed before the respective tender has been 
launched. The SAO detected serious irregularitie s in procurement procedures, but the Public 
Prosecutor’s Office in most cases establishe d only minor omissions. This resulted in few 
charges being pressed against the contractin g authorities. As regards award of public 
contracts, the country is moderately advanced. 
Progress can be reported as regards the remedies system. 95% of the cases received in 2009 
were resolved by the State Appeals Commission (SAC). The SAC publishe s justification of 
its decisions. However, the enforcement of d ecisions of the SAC is not satisfactory, which 
poses problems for an effective remedies syst em. Alignment with the amended EU Directive 
on remedies has yet to be achieved. The SAC remains severely under-budgeted and under-
staffed. As regards the remedies system , the country is moderately advanced. 
Conclusion 
Progress has been made in the area of public procurement. Transparency of procurement 
procedures was increased, but they need to be  simplified, in particular as regards entities 
operating in the utilities sector. The legislation on concessions and public-private partnerships 
is not in line with the acquis.  The remedies system, despite th e good work of the SAC, needs 
to be considerably strengthened. Efforts are n eeded to further improve the administrative 
capacity in the field of public procurement and concessions. 
4.6. Chapter 6: Company law 
Good progress can be reported in the area of company law . The Company Law was amended 
with the aim of aligning it with  the Fourth Company Law Dir ective on the annua l accounts of 
certain types of companies and with the Tenth Company Law Directive on cross-border 
mergers of limited liability companies. Further amendments were introduced with regard to 
 
EN 37   EN the right of pre-emption of shareholders, comp leting alignment with the Shareholders Rights 
Directive, and the electronic re gistration of companies. In a ddition, a new levy scheme of the 
Central Registry was issued. In line with the First Company Law Directive, applicants now 
pay lower levies for data issued by the Cent ral Registry. The Law on European Company was 
adopted and will be applicable upon the country' s entry into the EU. In the area of company 
law, the country is well on track.  
Some progress was made on corporate accounting . A Rulebook on accounting standards was 
adopted. It aims to transpose the internationa l accounting standards (IAS), the international 
financial reporting standard s (IFRS) and the accounting acquis . A Rulebook on the form and 
content of annual accounts of banks and other financial institutions was adopted. Explanatory 
notes became a mandatory element of the annual accounts. 
Little progress can be reported as regards auditing . A rulebook on auditing standards was 
adopted with an aim to transpose the in ternational standards on auditing, assurance 
engagements and related services established by  the International Federation of Accountants 
(IFAC). The Institute for Chartered Auditors (IC A) translated the Code  of Ethics and the 
International Standards on Auditing (ISA). Howe ver, there is not yet a public register, a 
disciplinary programme or a qual ity control system in place. A public oversight system for 
chartered auditors has yet to be  established. Chartered auditors ’ qualifications obtained abroad 
are still not recognised. The ICA remains understa ffed, with only two employees. Overall, in 
the area of accounting and auditing the count ry is not yet sufficiently prepared. 
Conclusion 
Good progress has been made in the area of  company law. The Company Law was further 
aligned with the acquis and the Law on European Company was adopted. However, the 
alignment of the legal framework in the area of auditing remains at an early stage. The 
administrative capacity of the Institute for Chartered Auditors remains weak. A public 
oversight system for chartered auditors has ye t to be established. Qu alifications obtained 
abroad have yet to be recognised.  
4.7. Chapter 7: Intellectual property law 
Some progress has been made on copyright and neighbouring rights . A new Law on 
copyright and neighbouring rights was enacted with an aim to reach alignment with the 
Enforcement Directive. Following  best international practice, copyright royalties will be 
calculated on the basis of the income instead of  the profit. The website of the Ministry of 
Culture on copyright protection is now regularly updated. The d ecisions of the Ministry of 
Culture to suspend the activities of two of the three collective rights management (CRM) 
societies were annulled followi ng a decision of the Administ rative Court. However, the 
Ministry of Culture did not re instate these two CRM societies’  licences. Only the Association 
for Protection of Copyright on Musical Work s (ZAMP) is currently active. The unit 
responsible for copyright in the Ministry of Culture remains understaffed, with only four 
employees. In the area of copyright and ne ighbouring rights the country is moderately 
advanced.  
Further progress has been made in the area of industrial property rights . The Criminal Code 
was amended to better define intellectual prope rty rights (IPR) infringements and to increase 
the maximum prison term to five years. Th e country ratified the Patent Law Treaty, the 
Vienna Agreement for establishing an international classification of the figurative elements of 
 
EN 38   EN marks, the Singapore Treaty on the law on trademarks, the Lisbon Agreement for the 
protection of appellations of origin and thei r international registration, and the Protocol 
amending the Agreement on trade-related asp ects of intellectual property (TRIPS). The 
staffing of the State Office for Industrial Prope rty (SOIP) remains sufficient even though it 
has decreased from 34 to 32 in 2010.  Activities to raise awareness of IPR issues were held in 
cooperation with the World Intell ectual Property Organisation (WIPO), the European Patent 
Office, the European Patent Academy, the Skopje Law Faculty, and the Academy for training 
of judges and prosecutors. In th e area of industrial property  rights the country is well 
advanced.  
Some progress can be reported as regards enforcement . The national strategy for intellectual 
property is being implemented. The Coordina tion Body for Intellectual Property (CBIP) 
adopted its operational programme for comb ating piracy and counterfeiting. The CBIP 
continued to take regular act ion throughout the country and seized about 130,000 counterfeit 
products and closed 10 outlets in 2009. Informa tion about the activities of the CBIP is 
published monthly. Goods seized were mainly  counterfeit audio/vi deo CDs, clothing, 
cigarettes and alcohol. Those goods that were th e subject of a court decision were forwarded 
to the Agency for Managing Confiscated Property and publicly destroyed. A group of 
customs officers was trained to specifically de al with combating coun terfeiting and piracy. 
State market inspectors received training to recognise counterfeit products. However, the 
division of competences between the law enfor cement institutions is not clear. Awareness of 
the health and safety risks of counterfeit  pharmaceutical products is limited. A reliable 
enforcement record is still missing. A syst em for exchanging data between the law 
enforcement institutions has yet to  be established and the method for collecting statistical data 
on enforcement is underdeveloped. Counterfeit ch annels are rarely traced and little was 
undertaken to eradicate the top of the count erfeit pyramid. The number of misdemeanour, 
civil and criminal proceedings remains unsatisfa ctory. Only 23 out of 98  cases dealt with by 
the specialised IPR departments of the 13 basic courts were co mpleted in 2009. Fines of up to 
€ 1,000 were imposed on legal entities. Crimin al and misdemeanour charges were pressed 
against individuals, but the selling of counter feit products on temporar y stalls continued. 
Cooperation with the Agency for Managing Conf iscated Property has been established. As 
regards enforcement, the country  is moderately advanced.  
Conclusion 
Some progress has been made in terms of th e IPR legal framework. A new Law on copyright 
and neighbouring rights was enacted . Law enforcement institutions  cooperate, but the division 
of responsibilities over IPR enforcement is uncl ear. The CBIP took regular action; however, 
counterfeiting and piracy remains widespread a nd fake products continue to be sold in the 
main streets, markets and outle ts. The track record on investig ation, prosecution and judicial 
handling of piracy and counterfeiting is not sati sfactory. The level of awareness of intellectual 
property rights among the public remains low.  
4.8. Chapter 8: Competition Policy 
No significant progress can be  reported in the area of anti-trust, including mergers . The 
percentage of decisions of the Commission for Protection of Competition (CPC) confirmed by the Administrative Court has increased. Howeve r, the enforcement record has decreased 
slightly in the field of mergers, with nine decisions taken, and remains low in the area of 
cartels. The CPC took three decisions in cases  involving abuse of a dominant position. The 
suspension clause, and the possibility to appeal  to the Supreme Court further delays the 
 
EN 39   EN enforcement of CPC decisions. The number of st aff in the CPC dealing with anti-trust and 
mergers remains insufficient. The general budget of the CPC for 2010 and the training efforts 
have remained stable. The number of judge s in the Administrativ e Court working on 
competition cases is adequate. Judges receiv ed training on anti-trust and mergers. 
Preparations in the area of anti-trust, incl uding mergers, are moderately advanced.  
There has been some progress in the field of state aid . The Law on technological-industrial 
development zones, fully in line with the acquis , was enacted. The Regulation establishing 
conditions and procedures for granting regional aid was amended, aligning the rules on aid to 
large investment projects with the acquis . However, the CPC took only one decision in the 
field of state aid. The number of reporting inst itutions has increased but remains insufficient. 
The number of staff dealing with state aid is adequate. Some training was given to state aid 
providers, but awareness of state aid regulati ons among government institutions, business and 
the general public is not yet sufficiently develope d. In the energy sector, most of the (lignite) 
coal reserves are still being managed by the el ectricity generation comp any and there is still 
no clear legal and financial separation between the lignite excavation activities and operation 
of the thermal power plants. In the ar ea of state aid the country is on track.  
Conclusion 
Some progress was made in the area of competiti on, especially in alignm ent with the state aid 
acquis . The human resources of the Commission fo r Protection of Compet ition are sufficient 
to cover state aid but inadequate in the field of  anti-trust and mergers. The enforcement record 
remains low in the field of cartels and state ai d. The financial resources of the Commission for 
Protection of Competition are st ill inadequate. Advocacy on anti -trust and state aid rules 
towards companies or public bodies granting aid is  still weak. Overall, preparations in the 
area are moderately advanced. 
4.9. Chapter 9: Financial Services 
Good progress was made in the area of banks and financial conglomerates . Several pieces 
of secondary legislation were adopted. Most  of the Basel Core Principles for banking 
supervision and further elements of the Ba sel II framework are being implemented The 
central bank NBRM improved its supervision by starting to apply a risk-based approach. 
Good cooperation has been maintained be tween the Central Bank (NBRM) and the 
supervisory authorities of thos e countries whose banks own some  of the biggest banks in the 
country, in particular Greece. Some experts left  the supervisory department in the NBRM, but 
its administrative capacity remains satisfactory in  terms of the number of staff and expertise 
for the current level of market development. The first private credit bureau, which helps credit 
institutions to assess credit risks, became opera tional. The Ministry of  Finance and the NBRM 
signed a Memorandum of Understanding for main taining financial stability and managing 
financial crises. 
There were no activities to improve consumer protection. Alignment with the acquis  on 
financial conglomerates and deposit guarantee schemes still has to be achieved. Preparations in the area of banks and financ ial conglomerates are on track. 
Some progress has been made in the area of insurance and occupational pensions . The 
Insurance Supervisory Agency (ISA) became f unctional and self-sustainable. The country 
launched the transposit ion of the relevant 
acquis  in the insurance area. Pursuant to the Law on  
 
EN 40   EN Insurance Supervision, a manual setting the requir ements for insurance agents and brokers has 
been adopted. Part of the impl ementing legislation for off-site  supervision has been adopted 
by the ISA, aiming at transposing the Solven cy I Directive; alignment remains to be 
confirmed. There is no enfor cement record yet. Seven memoranda of understanding have 
been signed, including three with EU member states’ insurance superv isory authorities that 
supervise insurance companies with local bran ch offices. The ISA signed an MoU with the 
Office for Prevention of Money Laundering and Financing of Terrorism and has become a 
member of the International Associ ation of Insurance Supervisors. 
However, no on-site supervision has been cond ucted, and there is stil l no properly financed 
guarantee fund for insolvency of insurers. Some  insurance companies still lack adequate 
reinsurance. Uninsured driving is still a problem . The Ministry of the Interior has no credible 
enforcement record in combating uninsured dr iving. The legislation implementing the Law on 
vehicles, regulating vehicle registration and insu rance, which should have been applied from 
1 June 2010, is still not applied. The provisions in the Law on compulsory insurance of road 
vehicles authorising the Ministry of Finance to  set the premiums for motor vehicle insurance, 
which represent an effective barrier to compe tition among the insurance companies, have not 
been removed.  
The law on fully-funded pension insurance has b een amended, ensuring increased operational 
and functional independence of the Agency for supervision of fully funded pension insurance 
(MAPAS). Further legislation implementing th e Law on fully funded pension insurance has 
been issued by MAPAS. There is no credible en forcement record yet in applying risk-based 
supervision. However, pursuant to the national legisl ation, pension funds can invest only 30% 
of their assets in non-domestic securities, wh ich is against the prin ciples of EU law.  
An important challenge would be future alignmen t of insurance legislation with the Solvency 
II framework, which is currently being prepared. This will impact not only on the insurance industry but also on the necessary supervisory ca pacity. Overall, the country is advancing in 
the area of insurance and occupational pensions. 
There was some progress in the area of financial market infrastructure . A committee on 
financial stability has been set up comprising th e Ministry of Finance and the central bank. A 
committee, coordinating the four financial superv isory authorities has also been established. 
Alignment with the acquis remains to be confirmed. Some financ ial services, such as leasing, 
are neither regulated nor supervised. The Settlement Finality Directive and the Financial Collateral Directive are not yet transposed. Prep arations in the area of financial market 
infrastructure have been launched. 
There has been good progr ess in the area of securities markets and investment services . 
The Law on securities was amended, transposing the acquis  on compensation schemes for 
investors, and on the acquisition of holdings in the financial sector; alignment remains to be 
confirmed. All the nece ssary legislation implementing the Law on investment funds entered 
into force, reflecting the basic principles of the acquis  on undertakings for collective 
investment in transferable securities . The Securities and Excha nge Commission (SEC) signed 
a memorandum of understanding with its counter part in Montenegro. The administrative and 
operational independence of the SE C is satisfactory. The amended Securities Law requires the 
members of the SEC to be full-time employees. This has, however, not yet been implemented. 
The transposition of the Capital Adequacy Directive has not been completed. The overlap between the responsibilities of the Central Ba nk and the SEC in the area of licensing and 
supervision of trading in securities has still no t been addressed. The IT system of the SEC has 
 
EN 41   EN not been upgraded and is still not adequate. In  the area of securities markets and investment 
services the country is  moderately advanced. 
Conclusion 
There was overall good progress in the ar ea of banking, capital markets and pension 
insurance. Efforts have been made to ensu re proper regulation an d supervision of the 
insurance sector, includ ing establishment of the Insuranc e Supervisory Agency. However, 
some financial services, such as leasing, remain  neither regulated nor supervised. The overall 
level of preparation in the area diverges widely across sectors.  
4.10. Chapter 10: Information society and media 
Good progress can be reported in the area of electronic communications and information 
technologies . Parliament enacted amendments to th e Law on electronic communications to 
further improve its alignment with the EU acquis . However, the provisions on interception of 
communications raise questions as to their comp atibility with European standards. The Law 
on construction has been amended to give author ity to municipalities in granting permissions 
for building telecommunications infrastructu re. The regulator adopted several amended 
regulations that are expected to improve co mpetitive conditions and introduced cost-based 
accounting methodologies for the pricing of fixed and mobile services. The market analysis 
process and subsequent imposition of regulator y remedies has progres sed significantly. The 
regulator is adequately staffed and self-finan ced. It has increased its capacities to manage 
frequencies and enforce its decisions. Furtherm ore, it has established a consumer protection 
department and a call centre, in creasing the level of transparen cy. Regulatory measures were 
applied in closer cooperation with the co mpetition authority. However, the level of 
cooperation remains insufficient to allo w thorough enforcement of the competitive 
safeguards. A tender procedure for the designat ion of a universal serv ice provider is being 
prepared. A new national internet exchange poi nt remains to be established. The emergency 
number 112 will still have to be introduced. Th e administrative capacity within the competent 
ministry needs to be strengthened. Prep arations in this area are advanced. 
Some progress can be reported in the area of information society services , notably in the 
fields of e-government and e- education, or establishing the Macedonian Academic research 
Network  (MARNet). The  legislation is already well aligned with the E-commerce and 
Conditional Access Directives. It is necessary to establish an  administrative structure for the 
implementation of the E-commerce Directive, in particular a nati onal contact point. 
Preparations in this area are advanced. 
Some progress can be re ported in the area of audiovisual policy . The Broadcasting Law was 
amended to remove provisions on bankruptcy  proceedings against the public service 
broadcaster. The Broadcasting C ouncil stepped up its market m onitoring activities and started 
cooperating with the competition authority. This cooperation led to the id entification of a few 
cases of breaches of competition rules. However, the legislation on media ownership and concentration is not fully enforced. The regulator is not able to monitor the market effectively. 
The re-introduced system for collecting the broa dcasting fee has started to yield results, but 
sustainable funding of the public service broadc aster and the Broadcasting Council still needs 
to be secured. Media legislation is not yet aligned with the Audiovisual Media Services 
Directive, which prevents the country from fully participating in the MEDIA programme. 
Moreover, the Broadcasting Council adopted implementing legislation which introduces 
compulsory subtitling in local language fo r foreign programmes broadcast via cable TV, 
 
EN 42   EN which may interfere with the principle of fr eedom of reception and retransmission enshrined 
in the Audiovisual Media Services Directive. Digital television was introduced. However, no 
roadmap has been developed for full digital switch-over and use of the digital dividend. 
Preparations in the area of a udiovisual policy are lagging behind. 
Conclusion 
There has been further progress in the field of electronic communications and information 
society services. Alignment with the EU acquis  and market liberalisation are improving and 
substantial efforts have been made to use ICT policies for public servic e provision to citizens 
and businesses. In the area of audiovisual polic y, the capacity of the Broadcasting Council has 
been strengthened, but it is still not adeq uate to monitor the market effectively. The 
sustainability of the public servic e broadcaster is yet to be en sured. Media legislation is not 
yet aligned with the Audiovisu al Media Services Directive and the Broadcasting Council 
introduced new legislation on subtitling of fore ign programmes which may interfere with the 
principle of freedom of reception and retransmission . Preparations in the area of electronic 
communications and information society services are advanced, but preparations in the area of 
audiovisual policy are lagging behind. 
4.11. Chapter 11: Agriculture and rural development 
Further horizontal  progress has been made. A revi sed law on agriculture and rural 
development was enacted that regulates the basic aspects of agricultural support policy, 
including direct payments, market support meas ures and rural development. For 2010 a total 
of € 86.7 million is allocated for direct support sc hemes; this includes direct area and headage 
payments, premium payments for strategically  important products, and non-commodity based 
payments. However, institutional capacity remain s insufficient, with significantly reduced 
budgetary allocations in 2010 for salaries of public se rvants in the sector and delays in filling 
vacant posts. 
Progress can be reported towards setting up an integrated administration and control system 
(IACS ). The basis for a land parcel identification system (LPIS) has b een established, with 
aerial acquisition and initial di gitalisation of physical blocks  completed. The real estate 
register currently covers 98% of  the country, of which approxim ately 92% is agricultural land. 
However, a fully functional farm register, with  a supporting automated IT system, is not yet 
completed. Compatibility of data registers is not yet achieved, most notably with respect to 
the animal identification and movement contro l register. There are currently insufficient 
human resources to manage and maintain a functioning IACS. 
The capacity of the paying agency (the Agency for Financial Support for Agriculture and 
Rural Development — AFSARD) ha s been further strengthene d. Staff employed in AFSARD 
are well trained and highly motivated. Howeve r, their number is not sufficient given their 
increasing range of responsibilities. Prepar ations for implementation of the European 
Agricultural Guarantee Fund ( EAGF ) (direct payments) are stil l at an early stage.  
Some progress has been registered in the development of a sust ainable and efficient 
agricultural information system. The Ministry  of Agriculture and Water Economy (MAFWE) 
has adopted a rulebook that defines the para meters for a functioni ng agricultural market 
information system (AMIS). A national committ ee to administer a farm accountancy data 
network ( FADN ) has been established, pilot FADN activ ities have commenced and alignment 
with the acquis  has been largely achieved. Provision of support in agriculture is covered by 
 
EN 43   EN the revised Law on agricult ure and rural development. However, the measures  introduced 
differ from the EU provisions in certain areas, pa rticularly tobacco. Preparations in the area of 
horizontal issues are on track. 
With respect to common market organisa tion, harmonisation of legislation with the acquis  
was initiated, including establishi ng marketing standards for sel ected crops (cereals and rice, 
dried fodder, fresh fruits and vegetables, and pr oducts of animal origin). As regards market 
management the revised Law on agriculture and rural development provides for market 
support measures such as intervention, consumption promotion and producers organisations. It is a useful, but limited, first step towa rds alignment with the EU common market 
organisation. Preparations in this  area are at an early stage. 
The existing legislation on wine has been adapted to take account of revisions to the acquis . A 
national strategy for grape and wine producti on has been adopted for the period 2010-15.  
Alignment with the acquis  in the area of specialised crops  is on track for wine.  
There has been good progr ess in the field of rural development .. Implementation of the 
IPARD programme under component V starte d in December 2009 after the Commission 
decided to confer to the country management  rights for three measures ‘Investments in 
agriculture holdings’, ‘Processing and marketin g’ and ‘Diversification in rural economy’. 
A first call for proposals for the three currently  accredited measures was completed in June 
2010. The second call for proposals was launched in September 2010. However, due to difficulties in obtaining various national permits and certificates the rejection rate of projects 
was very high and improvements to the implemen ting procedures are imperative to increase 
the absorption of IPA component V measures.  
It should be noted however that the inst itutional capacities of the MAFWE Managing 
Authority and the IPARD Agency might prove in sufficient to manage the increasing range of 
responsibilities following the c onferral of management. Remedial steps have to be taken in 
order to ensure proper implementation of the Programme. 
Progress can be report ed in the field of quality policy. A new legal framework covering 
regulation of marketing standards, requirement s on presentation and consumer labelling, and 
establishing quality schemes has been enacted. Preparations in this area are moderately 
advanced.  
There has been progress with organic farming . A law on organic production has been 
enacted. Alignment with the acquis remains to be achieved. Numb ers of registered organic 
producers as well as total organic production co ntinue to increase. A budget of € 1.16 million 
has been allocated in 2010 to support orga nic production, including provision for a national 
campaign to raise awareness of  organic food. Administrative cap acity remains insufficient. 
Preparations in this area are advanced.  
Conclusion  
Progress has been achieved in the field of ag riculture and rural development. The rural 
development policy is gradually being aligned with EU requirements. Further strengthening 
of the administrative capacity of the paying agency and the operational structures for pre-
accession assistance is needed. Alignment with the acquis  requires further sustained efforts. 
Preparations in this area are on track.  
 
EN 44   EN 4.12. Chapter 12: Food safety, veterinary and phytosanitary policy 
Some progress has been made as regards the general principles. The gove rnment adopted a 
new methodology for legal transposition by using i ndirect reference to EU legislation. The 
overlap between the two framework laws in this  sector, and the lack of inter-institutional 
cooperation, still remain.  
Progress has been made in the area of veterinary policy . Additional implementing legislation 
was adopted on control systems in the internal market and on  control systems for imports ; 
alignment remains to be confirmed. Trade Control and Expert Sy stem (TRACES)-type 
software has been introduced in the customs’  electronic one-stop sh op system for issuing 
import and export licences. The capacity of border c ontrols is still not sufficient, in terms of 
both infrastructures and administration. An EU -compatible control system is lacking. 
The movement control part of the system for identification and registration of bovines, sheep 
and goats is not fully operationa l. Administrative capacity in the veterinary directorate for 
identification of animals remains weak. Training  sessions on identifica tion and registration of 
animals have been organised with a view to re ducing the number of errors by the veterinary 
stations. 
Some progress has been made in the area of control measures for animal  diseases.  
Implementing legislation on control of brucello sis has been adopted and its implementation 
has started.. The veterinary directorate is im plementing a programme for vaccination of small 
ruminants against brucellosis over the whole territory of the country. The acquis  on 
transmissible spongiform encephalopathies has not  been fully transposed. The capacities of 
the veterinary directorate remain insufficient to perform systematic controls in relation to transmissible animal diseases.  
Limited progress has been made in the area of animal welfare. Several pieces of  
implementing legislation transposing the acquis have been adopted; alig nment remains to be 
confirmed. The EC-approved annual monitoring programme for prohibition of substances and 
residue control has been amended with six new produc ts. Some implementing legislation on 
intra-EU trade in live animals, semen, ova and embryos, on non-commercial movement of pet 
animals and  on import requirements for  live animals and animal products remains to be 
adopted. No new international veterinary  agreements have been concluded . The capacity to 
further transpose and implement the acquis on zootechnical issues remains weak. The 2010 
budget for veterinary expenditure on measures for animal health was reduced by 20% as 
compared to 2009.  
The capacity of the laboratories of the veteri nary faculty has been strengthened, although the 
validation procedures need to be improved. Th e administrative capacity of the veterinary 
inspectorate remains insufficient at both cen tral and local level to implement an EU-
compatible control system. The system for supervising the veterinary inspectors and 
veterinary stations has not yet been implemented . In the area of veteri nary policy the country 
has started to address its objectives.  
Some progress has been made as regards the placing on the market of food and feed . New 
rules for funding of checks  have been adopted, including the calculation of fees based on EU-
defined minima; alignment remains to be confirmed. A strategy and action plan for 
implementation of the Hazard Analysis Critical Control Point (HACCP) system for the period 
2010 – 2014, has been adopted. Additional guide lines for implementing the HACCP, good 
 
EN 45   EN hygiene practices and good manufacturing practices  have been developed. Training has been 
provided for food business operators. The aid schemes for HACCP certif ication have been 
extended to 2010. The number of food business operators that implem ent hazard analysis 
critical control point (HACCP)-based procedur es has increased but th e procedures are not 
always applied correctly. Eval uation of food processing estab lishments for compliance with 
EU standards and their upgrading programmes is  progressing slowly. A plan for improving 
the quality of raw milk has not been adopted  due to the lack of available funding. The 
legislation on hygiene rules, specific rules for animal products , control rules and specific 
control rules for animal products only partially meets the EU requirements. 
The rules for animal by-products have been adopted; alignment remains to be confirmed. The 
necessary comprehensive collection and treatment systems have not yet b een set up. There is 
still no strategy for the treatmen t of animal by-products, includi ng the categorisation of risk 
material. Preparations in th is area are being initiated.  
In the area of food safety rules, preparations of the new legal framework have commenced to 
avoid overlapping between the cu rrent veterinary and food la ws. Implementing legislation 
was adopted on safety of alcoholic beverage s and food contact material. Implementing 
legislation on  extraction solvents, food contact material and fortified  food has yet to be 
adopted.  
The existing legislation transposes the acquis on labelling, food additives , flavourings, food 
supplements, food for particular nutritional uses, quick-frozen foodstuffs , contaminants, novel 
food and genetically modifi ed organisms (GMOs),  ionising radiation and mineral waters; 
alignment remains to be confirme d. The capacity of the laboratory in the Institute for Health 
Protection is still insufficient, in terms of both human resources and procedures, to provide 
reliable results. The capacity of  the food inspectorate in the f ood safety directorate has been 
strengthened, but the number, training and co mpetence of staff remain insufficient. The 
monitoring programme for food sa fety has not been implemented due to lack of funds. In the 
area of food safety rules, the count ry partially meets its objectives. 
Some progress was made on specific rules for feed . Legislative preparations  in this area have 
started. 
Little progress can be reported in the area of phytosanitary policy . With regard to plant 
variety rights  the International Convention for the prot ection of new varie ties of plants was 
ratified.  A new list of harmful organisms has been adopted. Some implementing legislation on 
plant protection products has been adopted. The register of  plant protection products has not 
been established yet. No action has been taken to implement the international standards for phytosanitary measures, in particular for surve illance, export certification and determining 
pest status in an area. Implementing legislation on the quality of seeds and propagating 
material  has yet to be adopted. The  administrative capacity of the phytosanitary directorate 
remains inadequate. 
Coordination among the  various competent authorities in th e area of phytosanitary policy has 
not improved. The human resource s, equipment and facilities for border controls are still 
inadequate. The improved capaci ty of the state phytosanitar y laboratory remains under-used 
because its role in the national food safety monitoring system is undefined and samples are 
not received on a regular basis.  
Conclusion 
 
EN 46   EN There has been some progress in  the area of food safe ty, veterinary and phytosanitary policy, 
in particular with respect to legislative pr eparedness and implementation of hazard analysis 
critical control point principles by food busin ess operators. The administrative capacity, in 
terms of financial and human resources, remains insufficient, in particular as regards the 
effectiveness of monitoring and control systems. Preparations  in the area of food safety, 
veterinary and phytosanita ry policy are on track.  
4.13. Chapter 13: Fisheries 
Progress has been made in the field of resource and fleet management . Registers of 
producers and databases of fish production and marketing in the sector are being maintained. 
The acquis requirement on fleet registration is not a pplicable. Preparations in this area are 
moderately advanced.  
Little progress has been made in the area of inspection and control . The administrative 
capacity of the unit for fisheries and aquaculture within the Ministry of  Agriculture and Water 
Economy (MAFWE) remains insufficient. This lack  of capacity extend s to the agricultural 
inspectorate, which plays the principal role in the control and inspection of fisheries. Preparations in this area  are at an early stage. 
Good progress has been made in the field of structural actions . A revised law on fisheries 
and aquaculture has been enacted. It provides  for domestic fisheries support administered 
within the national rural devel opment programme. Investments in  aquaculture and fish farms 
are also eligible for IPARD support. 
No progress has been achieved in the field of market policy . The administrative structure for 
implementing market policy is not yet in place.  MAFWE does not yet have a register of all 
state aid  approved in the fisheries sector. The nati onal state aid schemes need to be aligned 
with the EU’s structural and state aid policies, in particular regarding support for the stocking 
of fish waters.  
There are no formal international agreements . Informal working arrangements have 
improved with Albania, and continue with Gree ce, covering the manage ment of resources in 
the three lakes whose waters are shared.  
Conclusion 
There has been some progress in the area of fi sheries. Administrative capacity still requires 
further strengthening. Since the countr y is landlocked, much of the fisheries acquis is not 
relevant. Preparations for implementation of the common fisheries policy ar e at an early stage. 
Preparations in the area of fisheries are on track. 
4.14. Chapter 14: Transport policy 
There has been good progr ess in the area of road transport . An inter-governmental body was 
created to enhance implementation of the road  safety strategy by providing a clear allocation 
of responsibilities and coordina tion between the bodies involv ed. The Road Safety Council 
continued to hold consultations w ith the relevant institutions. Regular road safety campaigns 
have started according to their annual plan.  A new law on digital ta chographs was enacted
. 
The relevant implementing legislation has b een adopted. Digital tachographs are being 
introduced. The card issuing authority has been es tablished. The Law on road transport is still 
 
EN 47   EN not fully aligned with the acquis on market access. The administrative capacity of the 
inspectorate needs to be streng thened. Preparations in the area of road transport are advanced. 
Some progress can be reported on rail transport . The system of track-access charges 
between the infrastructure manage r and train operator was publishe d, but levels exceed direct 
costs and therefore render competition of rail with road transport difficult. The new Laws on the railway system and on railway safety have b een enacted with a view  to further alignment 
with the railway acquis. They require the establishment of  a safety authority within the 
Ministry of Transport and Communications and the accident investigation body. The 
regulatory body has become operational in its ro le as market regulato r and licensing body. It 
participates regularly in the EU working group of regulatory bodi es and has esta blished cross-
border contacts as required by EU law. Two private railway operators have applied for 
licences as railway undertakings. The first ap plicant, submitting the request in March 2010, 
has not yet received the licen ce. The second applicant has w ithdrawn. A major reason is the 
lack of clear guidelines for the applicants. More over, market access is complicated by the fact 
that the safety authority is not yet fully functional and hence the procedures for issuing safety certificates are not in place. 
The agreement with Kosovo, based on the ha rmonised regional model prepared under a 
CARDS study in 2009 is ready to be initialled.. 
In the area of inland waterways transport  some progress can be reported. The new 
amendments to the Law on inland waterway navigation were adopted. They regulate the 
technical requirements for waterway vessels a nd their inspection, improve security conditions 
and increase the amount of penalties. In this area, the country has to establ ish a track record of 
implementation of the relevant legislation. 
No progress can be reported on combined transport . Preparations are on track. 
Limited progress can be reported in the area of air transport . The amendment to the Aviation 
Law was enacted by parliament. Legislation impl ementing the Law on avia tion with a view to 
further alignment was adopted. The Civil Aviati on Agency has been turned into a separate 
regulatory body. The Civil Aviation Agency i ssued a licence to provide air–navigation 
services to the state-owned jo int stock company. Parts of the first phase of the European 
Common Aviation Area agreement relating to conditions for access to the ground handling 
market, to air traffic management and to avia tion safety and security procedures are not 
implemented. Several important pieces of the single European sky legislation have been correctly transposed but further efforts are need ed to complete regulatory alignment with the 
single European sky within the ISIS Programme . The airspace, the inte roperability and the 
flexible use of airspace regula tions need to be transposed, and the airspace needs to be 
reconfigured into a functional airspace block. The amendment to the Aviation Law includes a 
reduction of the financial resources of the Ci vil Aviation Authority. The human resources of 
the Civil Aviation Agency have not been st rengthened. Staff recently hired by the air-
navigation services company l ack relevant experience. The Air Accident Investigation 
Committee needs to strengthen its  capacity to act as  an independent body for investigating 
accidents and serious incidents. The air traffic department of the Ministry of Transport and 
Communications still lacks qualifi ed staff. Administrative capacity in the air transport sector 
needs to be strengthened, particularly in terms of staff qualification. Prep arations in this area 
are moderately advanced.  
Conclusion 
 
EN 48   EN Some progress can be reported in the area of tr ansport policy. Digital tachographs are being 
introduced. The market opening for rail transport faces challenges. Administrative capacity needs to be strengthened in every sector of tr ansport. In particular, efforts are needed to 
improve the functioning of the safety authorities. The Air Accident Investigation Committee needs to be strengthened in or der to be able to act as an independent body for investigating 
accidents and serious incidents. Overall, preparations in this area are advanced. 
4.15. Chapter 15: Energy 
A Strategy for Energy Development for the period 2008-2020 with a perspective to 2030 was 
adopted. 
Progress can also be re ported in the area of security of supply .. The government adopted a 
medium-term programme for building up mandatory reserves of oil and oil derivatives for the 
period 2010-2015, aimed at securing 90 days’ average consumption, and an implementing 
regulation on the payment of fees for the im port and production of oil and oil derivatives.
 At 
the end of September 2010, oil stocks were equi valent to only 26 days’ average consumption. 
In the area of security of supply the c ountry is at an early stage but on track. 
There has been some progress in the area of the internal energy market . A proposal for a 
new comprehensive energy law, aligned with  the energy acquis under the Energy Community 
Treaty, was adopted by the Government in Sept ember 2010 and is pending before Parliament 
The Energy Regulatory Comm ission (ERC) adopted the ru lebook on the conditions for 
electricity supply.. Market rules remain to be adopted. A subsidy scheme for vulnerable 
customers was introduced.. Electricity prices  for households increased by around 10%, but 
still do not reflect costs. The rulebook on the method and conditions for regulating electricity 
prices has not been amended in a way that m eets the cost-reflectivity principle.. Power bill 
collection rates remain insufficient to ensure the viability of the system. The electricity market 
is still not fully opened to all non-household cu stomers. The dispute settlement procedure 
opened by the Energy Community S ecretariat is still ongoing.  
The ERC adopted the rulebook on the method and conditions for regulating prices for the 
transport, distribution and supply of natural gas. Natural gas suppl y has still not been 
unbundled from natural gas transmission, as re quired by the Natural Gas Directive. The 
ownership of the gas system remains unresolved.  
The administrative capacity of the ERC was re structured and strength ened: four new staff 
members were hired, increasing the total numbe r of staff to 21 (including commissioners), 
and the ERC benefitted from training inter alia  in the fields of market and licensing 
compliance monitoring and tariff setting.. The ener gy department of the Ministry of Economy 
has been strengthened with four new staff, but its administrative capacity remains insufficient 
to address all energy policy challe nges. In the area of the internal energy market the country is 
moderately advanced. 
Progress can be reported in the field of energy efficiency and renewable energy.The energy 
efficiency strategy was adopt ed. An energy efficiency action plan in line with the 
commitments of the Energy Community’s Energy  Efficiency Task Force was finalised. The 
Ministry of Economy adopted tw o rulebooks on co-generation.The  Energy Agency still lacks 
the necessary resources and administrative capac ity to effectively promote energy efficiency 
and renewable energy sources. In the area of energy efficienc y, the country has started to 
address its objectives. 
 
EN 49   EN The strategy for the use of renewable energy  sources was adopted. It  sets a target for a 
renewable energy share of 21% of the tota l energy consumption by 2020. The ERC adopted 
rulebooks on the use of feed-in tariffs for elec tricity produced from biomass and biogas.. The 
government signed concession agreements fo r the construction of 19 small hydropower 
plants. The feasibility study for the country’s pi lot wind farm was finalised. Preparations in 
the area of renewable energy are on track but si gnificant further efforts will be necessary. 
Progress has been made regarding nuclear safety and radiation protection . The Joint 
Convention on the Safety of Spent Fuel Manageme nt and on the Safety of Radioactive Waste 
Management was ratified. The radiation safety directorate (RSD) issued several implementing 
regulations. However, their compliance with the EU acquis  still needs to be checked. The 
administrative capacity of the RSD is acceptable,  although additional staff are needed to 
enable the RSD to fulfil all its tasks. Licensing of  the storage facility fo r radioactive waste is a 
key issue for guaranteeing safe management of radioactive waste in th e country. This should 
be carried out in full compliance with the acquis  concerning assessment of the environmental 
impact. Criteria for defining a technical support organisation should be es tablished in order to 
enable the RSD to receive techni cal assistance, not least in the field of safety assessment of 
complex facilities. A national em ergency plan has to be devel oped. Training in the field of 
radiation protection should be or ganised. The financial independen ce of the directorate is still 
not secured.  
Conclusion 
Some progress has been made in the energy sector. New energy stra tegies were adopted. 
However, the new comprehensive energy law remains to be enact ed. Electricity tariffs do not 
reflect costs. Whilst there has been good progress,  a final resolution of the dispute with the 
distribution system operator, a major EU invest or, is still outstanding. The energy regulator 
and the radiation protection regul ator have to become functiona lly independent. Preparations 
in this area are moderately advanced. 
4.16. Chapter 16: Taxation 
No progress has been made in the area of indirect taxation . Nonetheless the rate of value 
added tax  (VAT) on the supply of water for irrigati on purposes was reduced from 18% to 5%, 
which is compatible with the acquis . The calculation of the excise  duty on passenger cars was 
revised so that it is based on the car’s va lue rather than the size of its engine.  The excise duty 
on some products remains lower th an the minimum required by the acquis . The preparations 
in this field remain on track. 
In the area of direct taxation , the Profit Tax Law was amended. The new provisions stipulate 
that dividends paid to resident legal entities will  not be taxed. These pr ofits will be taxed only 
when the dividends are paid out to non-resident legal persons or to individuals (both resident 
and non-resident). These changes raise an issu e of discrimination agai nst non-resident legal 
persons and also raise questions with respect to the future application of the Parent-Subsidiary 
Directive. Preparations in this area remain moderately advanced.  
There has been some progress in the field of administrative cooperation and mutual 
assistance . A double taxation agreement with Slovakia,  which replaces the former agreement 
between Czechoslovakia and Yugoslavia, was ra tified. The number of agreements concluded 
with EU Member States is now 23.  
 
EN 50   EN Little progress has be en made as regards operational capacity and computerisation . From 1 
January 2010, the management of excise dutie s was transferred from the Public Revenue 
Office (PRO) to the Customs Administration.  The PRO updated its strategic plan for 2010-
2012, but a detailed implementation plan is missi ng. The decentralisation of taxpayer services 
continued. The number of taxpayers increased to a total of 192,832. The PRO office in charge 
of large taxpayers increased the number of companies it covers from 175 to 235. The control 
policy and capacity for processing VAT tax retu rns has been centralised. Enforced collection 
efforts intensified and audit efficiency increased: tax collection was some 50% higher in 2009, with a reduced number of audits. Audi ting and arrears collection capacity remains 
weak, although efforts were made by providing the PRO’s auditors w ith better tools and 
working methods in support of their controls. Tax investigation capacity and coordination to 
fight tax evasion remains insufficient. The PRO’s planned staffing reinforcements for 2009 
and 2010 did not materialise. An adequate IT system is lacking. A code of conduct for 
business taxation has yet to be developed and applied. Preparations in this area remain 
advanced. 
Conclusion 
Limited progress can be reported in the fi eld of taxation. No progress was made in 
harmonising indirect and direct taxation legislation with the acquis . Moreover, the new 
provisions introduced in the Profit  Tax Law are diverging from the acquis . Some progress can 
be reported in the area of operational capacity for the tax administration as regards taxpayers’ services and audit efficiency. Audit and tax investigation capac ity to fight evasion remain 
weak, and an adequate IT system remains to be developed. The code  of conduct for business 
taxation is not yet in place. Preparati ons in the area of taxation are on track. 
4.17. Chapter 17: Economic and Monetary Policy 
Progress was limited in the area of monetary policy . The central bank issued new 
implementing legislation on calcula ting exchange rates. It conti nued to improve the monetary 
statistics by further complying with internat ional standards. The cen tral bank’s reporting on 
the macroeconomic situation has been reinfo rced, although figures are not fully harmonised 
yet with the State Statistical Office. The shor tcomings in the legal framework in some key 
areas, such as the full independence of the centr al bank, the prohibition on  monetary financing 
of the public sector and the prohibition on prefer ential access for the public sector to financial 
markets, have not been addressed. Preparations  in the area of monetary policy are on track. 
Modest progress has been made in the field of economic policy . The submission of the fourth 
pre-accession economic programme, coveri ng the period 2010-2012, was delayed. The 
macroeconomic framework is comprehensive and th e fiscal framework is broadly in line with 
it. However, the description of structural reforms is not sufficiently comprehensive while the 
macroeconomic and fiscal frameworks are optimis tic in the context of the expected external 
developments. The objectives are not clearly  aligned with the accession-related policy 
priorities. As a consequence, the programme ha s only limited relevance and is not being used 
as a core document for economic policy-making. In 2009 the public debt amounted to 32.1% of GDP, which is lower than the 40% of GDP projected in the debt management strategy. 
Administrative capacity for policy implementa tion diverges widely: horizontally, among the 
state institutions, and vertically, between the cen tral and local level. In the area of economic 
policy the country partially meets its objectives. 
Conclusion 
 
EN 51   EN Limited progress has been made recently in the area of economic and monetary policy. 
Monetary policy implementation by the Central Bank has improved. Alignment with the acquis is incomplete. Administrative capacity for economic policy formulation and 
implementation diverges widely. Nonetheless, overall preparations in  the area of economic 
and monetary policy are on track. 
4.18. Chapter 18: Statistics 
Good progress was made in the area of statistical infrastructure . The strategic plan of the 
State Statistical Office (SSO) for 2010-2012 was adopted. The staffing situation improved and 
the IT capacity was further reinforced. Howe ver, SSO's budget for 2010 was significantly 
reduced, the overall resource situation is weak  and equitable representation needs to be 
ensured. A memorandum of understanding was si gned with the Ministry of Agriculture, 
Forestry and Water Economy. Preparations in this area are advanced. 
Progress was made in the field of classifications and registers . The classification of 
economic activities, NACE Rev. 2, has been intr oduced in the business register. Sources and 
procedures for updating the statistical farm regist er were defined. Prepara tions in this area are 
moderately advanced. 
Good progress was made in the area of sector statistics . Preparations for the population and 
housing census scheduled for April 2011 are continuing. However, the budget for the 
population census is not yet secured and the la w on census has not yet been adopted. The SSO 
carried out the first regular survey on income and living conditions. Population projections at 
regional level for 2005-2055 were published. The SSO implemented the EU ad hoc module 
for the labour force survey and started transmitting quarterly data to Eurostat.  Improvements 
were made in short-term business statistics . Methodological improvements were made in 
national accounts. Revised quarterly accounts we re published in June 2010. Further alignment 
with ESA 95 is needed. Compliance with ES A 95 of the Pre-accession Economic Programme 
remains weak. The preparation of harmonised indices of consumer prices is advanced. 
Progress was made in agricultural statistics. The farm structure survey has been carried out. 
Progress has been achieved in the field of waste statistics. Data transmission to Eurostat has 
increased significantly but need s to be further improved, in particular for economic data. 
Preparations in the area of s ector statistics are advanced. 
Conclusion 
Overall, there was good progress in several areas, especially in  producing sector statistics. 
However, there is still some way to  go before full alignment with the acquis is achieved. The 
overall resource situ ation remains weak and e quitable representation need s to be ensured. It is 
essential that funding is secured for the population and housing census 2011. Substantial 
efforts to improve sector statistics need to continue, in particular for economic statistics. 
Preparations in the field of  statistics are advanced.  
4.19. Chapter 19: Social Policy and employment 
There has been limited progress in the area of labour law . Amendments to the Law on labour 
relations have been enacted. However, complete alignment with the acquis and commensurate 
administrative capacities of the institutions re sponsible for implementation and enforcement 
of the labour law are still missing. Cooperation between the relevant institutions remains 
weak. Preparations in th is area are advancing.  
 
EN 52   EN Some progress can be reported in the area of health and safety at work . The National 
Council for Occupational Safety and Health has been set up. The rulebook concerning the 
risks related to exposure to chemical substan ces at work was adopted. Alignment remains to 
be confirmed. The number of in spectors has increased from 35 to 40, and some training has 
been provided. Nevertheless, there is still a substantial demand to train inspectors and duty 
holders on the requirements of the transposed EU acquis . The number of inspections has 
increased, reaching 60 per month per inspector. Ho wever, this high rate questions the quality 
of controls performed. The strate gy for further development of h ealth and safety at work has 
not been finalised. Consolidated  recording of data on accident s at work is still lacking 
therefore, there is a need for a coherent syst em for the collection and analysis of data on 
accidents and ill-health which would enable to prioritise and target the work of the State 
Labour Inspectorate and against which a nation al strategy can be delivered. Overall, the 
administrative capacity remains insufficient to ensure proper implementation and enforcement 
of the legal provisions. Alignment with the acquis in the area of health and safety at work is 
moderately advanced.  
There has been little progress in the social dialogue . Determination of the representative 
status of trade unions and employe rs associations for participati ng in bipartite and tripartite 
social dialogue is completed. The membersh ip of the Economic and Social Council has 
changed, reflecting the representative status of  its members. It has become operational, but 
has yet to contribute to functional and representative soci al dialogue. Tripartite and bipartite 
social dialogue remains weak and there is not  sufficient commitment and strategic approach 
from the government to ensure adequate and eff ective participation of the social partners in 
the policy development process. The capacity of social partners to contribute to development of employment and social policies themselves continues to be weak . Preparations in this area 
are progressing slowly.  
Limited progress has been made in the area of employment policy . The Employment Service 
Agency is slowly implementing the new se rvice model. A public campaign was launched 
regarding employment in the grey economy. Th e unemployment rate remains high and labour 
market participation is still very low. The amendments to the Law on health insurance did not have the expected effect on decreasing the number of registered unemployed. There was a 
significant reduction, by more than one third, of  the allocated budget for active labour market 
measures; it remained insufficient to have a re al impact. Only very few of the measures 
included in the active labour mark et programme directly aim to address the skills needs and 
improve the employability of the labour force.  Employment in the grey economy does not 
seem to have diminished. Efficient cooperati on and coordination between enforcement bodies 
is lacking. Preparations in the area of empl oyment policy remain at an early stage.  
There was some progress in the prep aration for participation in the European Social Fund . In 
2009, conferral of management powers was gr anted and preparations started for the 
implementation of operations. However; implementation of the Human Resources 
Development Operational Programme, co-finan ced under IPA component IV, is moving very 
slowly. The implementation of operations has not yet started. 
Little progress has been made on social inclusion . The potential of social policies for 
supporting stability and national re conciliation still needs to be fostered. The poverty rate has 
increased. The national programme for the de velopment of social protection 2010-2021, and 
the national strategy on e quality of rights of people with  disabilities 2010-2018 was adopted. 
Development of the national strategy for alle viation of poverty and social exclusion has 
commenced. The number of small communal houses for people with disa bilities has increased 
 
EN 53   EN as well as the involvement of civil society orga nisations in the provision  of social services. 
The high drop-out rate in the early years of education has decreased, but still remained 
significant, in particular for Roma children. Th e use of a coherent monitoring and evaluation 
system to assess policy reforms in this field re mains to be strengthene d. In general, progress 
in implementing the measures set by the natio nal strategic plans concerning Roma, people 
with disabilities and other socially excluded people is very slow. Also, the budgetary 
commitments and resources allocated by the releva nt ministries are inadequate. Overall, the 
absence of a resolute and coordinated approach continues to limit the effectiveness of the rights of people with disabilities, such as th eir access to health and special care and their 
social integration. Preparations in this area are at an early stage.  
Little progress can be re ported in the field of social protection . Reforms in the pension and 
healthcare systems are ongoing. Implementation of the Law on social protection, which 
provides for a mechanism for harm onising the social welfare benefi t with the cost of living, 
was slow. Administrative capacity is still insuffi cient to develop a sust ainable and equitable 
social protection system. Pr eparations in this area are moderately advanced. 
There was partial progress in the area of anti-discrimination . A framework law has been 
enacted. The Law contains a list of grounds of prohibited discrimination, going partially 
beyond EU-required grounds. However, it omits  ‘sexual orientation’ as a ground for 
protection. Furthermore, the scope  of the exceptions from prohibi tion of discrimination is too 
wide. The Law establishes a commission for pr otection against discrimination, competent to 
receive and consider individual complaints. It will come into  effect on 1 January 2011. The 
three-month time limit for complaints to the commission for protection against discrimination is overly restrictive. So far, no provisions ha ve been made to give the commission sufficient 
administrative nor budgetary capacity and its members will not be remunerated. The Law 
remains to be fully aligned with the acquis . In practice, discrimination based on sexual 
orientation, ethnic origin and disability continues. The ava ilability of stat istics and other 
information on direct, indirect and multiple form s of discrimination is still very limited. In 
this area, preparations are at an early stage. 
Little progress can  be reported on equal opportunities . Not all the provisions of the Law on 
equal opportunities are fully impl emented yet. As provided by th e Law, a person in charge of 
dealing with complaints for une qual treatment was appointed w ithin the Ministry of Labour 
and Social Policy.  
The capacities of the equal opportunity commissi ons at local level have been strengthened, 
but remain insufficient. The capacity of the s ection for equal opportunities remains inadequate 
in terms of financial and human resources. Th e implementation of the national strategy for 
protection against domestic violence suffers from a lack of coordination, particularly at local 
level. Support for activities an d initiatives aimed at combating discriminatory customs, 
traditions and stereotypes, is weak. The female  employment rate remains very low at 29.4% 
compared to 59.1 % in the EU. The trends in the labour market are less favourable for women 
than for men.  
Conclusion 
Little progress has been made in the area of social policy a nd employment. A framework anti-
discrimination law has been adopted but it is not yet in full compliance with the  acquis . 
Efforts to build a consensus on anti-discrimina tion failed. Tripartite and bipartite social 
dialogue continues to be weak. Inclusion of Roma, people with disabilities and other socially 
 
EN 54   EN excluded people is slow. The overall administrative  capacity is still insufficient. Preparations 
in this area are not very advanced.  
4.20. Chapter 20: Enterprise and industrial policy 
Progress can be repor ted in the area of enterprise and industrial policy principles . The 
second phase of the regula tory guillotine project imple mented 27 measures aimed inter alia  at 
making the operation of the customs terminals a nd border inspections more efficient, cutting 
paperwork and streamlining administrative proc edures, and reducing fees and tariffs. A third 
phase of the project has started, focusing on th e penalty policy. Regular meetings on issues 
related to impediments to business operations  take place between the government and the 
business sector. The guidelines for regulatory imp act assessment came into force and the civil 
servants involved in the development of lega l acts received training on how to apply them 
correctly. However, some line ministries still do not carry out a broad stakeholder 
consultation and a detailed and syst ematic analysis of draft laws.  
The ‘think-small-first’ principle is not embe dded in the law and policy development in the 
country. The human resources and the public f unding for operation of the SME Department 
and the SME Agency remain insufficient. In the area of enterprise  and industrial policy 
principles, the country is  moderately advanced.  
Some progress can be re ported in the field of enterprise and industr ial policy instruments . 
The country started to benefit more from  the EU Entrepreneurship and Innovation 
Programme. The 2010 annual programmes to support competitiveness, entrepreneurship and 
clusters networking were adopted, totalling ab out € 0.49 million. This represents a reduction 
of about 40% in comparison to the budgets in 2009. The export promotion activities have been transferred to the Agency for Foreign Investments and its 2010 budget is about € 5.7 million. In 2009 the agency spent significant resources to attract foreign investors, with little tangible results.  
The Law on obligations was amended in order to ensure further transposition of the Late 
Payments Directive. Full transposition will  be ensured over severa l phases. The National 
Centre for Development of I nnovations and Entrepreneurial L earning was established as a 
public-private body. The Government secured a € 100 million loan from the European 
Investment Bank, which is being used to improve the SMEs' access to capital through loans, guarantees and interest rate subsidies. Prepar ations in the area of policy instruments are 
moderately advanced. 
There has been some progress in the area of sector policies . The strategy for tourism 
development 2009-2013 was prepared. It sets the priorities for the development of tourism 
based on sustainable natural and cultural valu es. The implementation of the strategy is 
supported with a budget of about € 0.5 million. A signi ficant share of the funds is allocated to 
the programme to subsidise visits by foreign tourists. The Agency for Promotion and Support 
of Tourism was staffed and started to opera te. The Ministry of Economy budgeted about 
€ 57,000 for the 2010 programme for the restruct uring of the textile industry. In 2009, the 
mining and basic metal producti on sectors recorded a drop in production of 3.6% and 42.1% 
respectively compared to 2008, and a reduction in the number of employees of 13.8% and 19.7% respectively. In  the area of sector polices, the country is on tr ack with the EU 
obligations. 
 
EN 55   EN Conclusion  
There has been some progress in the field of en terprise and industrial policy. Good progress is 
achieved in reducing administrative barriers and operating costs of businesses. New bodies 
have been established and significant resources  are devoted to their operation. There are a 
number of strategies and a nnual programmes for supporting en terprises and the SME sector 
which need streamlining and proper public fundi ng. Measures addressing traditional sectors 
received inadequate budgets.  
4.21. Chapter 21: Trans European Networks 
Limited progress can be reported in the area of transport networks . The country continued to 
participate in the South East Europe Transport Observatory and to implement the multi-annual plan for 2010-2014 of the Memorandum of Understanding on development of the core 
regional transport network. Construction work s on the motorway section along corridor X 
near the border with Serbia (Tabanovce-Kuman ovo) are well on track. The preparation of the 
IPA project for the corridor X motorway sect ion is severely delayed and the procurement 
process has not started. Administ rative capacity, especi ally technical expert ise, needs to be 
significantly strengthened. Substantial financia l resources to upgrade the transport network 
infrastructure are still needed. In this ar ea, preparations are moderately advanced.  
There has been progress in the area of energy networks . The 400 kV electricity 
interconnection line with Bulgaria was complete d. The preparations for the construction of a 
new 400kV electricity interconnec tion line with Serbia advance d. Initial discu ssions for the 
construction of a new 400kV electri city interconnection line with  Albania have started which 
represents one of the infrastructure priority pr ojects endorsed by the Ministerial Council of the 
Energy Community. The project for the recons truction and revitalisation of the existing 
transmission substations and interconnections has continued, and several elements have been 
completed. The feasibility study for priority gas interconnections was fina lised. In the area of 
energy networks the country is moderately advanced. 
There was some progress in the area of telecommunications networks . The country has 
signed up to the information and comm unication technologies component of the 
Competitiveness and Innovation Framework Programme.  
Conclusion 
Some progress was made in the area of trans-Eu ropean networks. The country is continuing to 
participate actively in the South East Eu rope Transport Observatory and the Energy 
Community. Procurement for the corridor X IPA co-financed project is significantly delayed. 
Preparations in this area  are moderately advanced. 
4.22. Chapter 22: Regional policy and coordi nation of structural instruments 
No relevant progress has been made in the  legislative framework . Further alignment is 
needed to ensure that Cohesion Policy can be implemented in respect of Community 
legislation and policies. Legisl ation needs to be put in place  which allows for multi-annual 
programming and budget flexibility. In this ar ea, preparations are moderately advanced. 
There has been uneven progress in the institutional framework . In October 2009, conferral 
of management was granted under the Op erational Programme for human resources 
 
EN 56   EN development. The efficiency of the opera ting structure of the IPA human resources 
development programme has improved. Inter-mi nisterial coordination within the operating 
structure of the IPA regional development programme needs to be further strengthened. Continuous efforts are needed in the prep aration and implementation of projects and 
operations under IPA Component III due to th e longer period necessary for preparation of 
mature projects, the technical and financial co mplexity of the operations and the number of 
preliminary steps that need to  be undertaken before commenci ng major infrastructural works . 
Preparations in this area  are moderately advanced. 
Progress has been uneven in the area of administrative capacity . The implementation of the 
IPA human resources development progra mme is progressing well. However, the 
implementation of the regional development ope rational programme is significantly delayed . 
The administrative capacity of th e national structures dealing w ith IPA Component III, and in 
particular of the relevant line ministries , needs further strengthening. Recruitment of 
technically knowledgeable staff with project management expe rience and well targeted 
training would contribute to impr ovement of the technical expert ise within the ministries. In 
this area, the country is no t yet sufficiently prepared. 
In the area of programming , limited progress has been made. The national authorities have 
presented proposals for revision of IPA opera tional programmes for regional development 
(component III) and for human resources development (component IV) . Administrative 
capacity in the area of programming and proj ect preparation needs to be strengthened. 
Preparations in this area are advancing.  
There has been limited pr ogress in the area of monitoring and evaluation . Sectoral 
committees to monitor the operational progr ammes are functioning. The administrative 
capacity of the units for mon itoring and evaluation of the li ne ministries needs to be 
improved. Preparations in this area are moderately advanced.  
Some progress can be re ported in the area of financial management and control . 
Administrative capacity, in terms of the neces sary staff and training, has improved but not 
sufficiently. Preparations in this area are advancing.  
Conclusion 
Some uneven progress can be reported in the ar ea of regional developm ent and coordination 
of structural funds. The implementation of the operational programme  for human resources 
development is on track, while the implem entation of the IPA regional development 
programme is delayed. The administrative cap acity in the line ministries, in particular 
technical expertise, needs to be strengthened. It is also necessary to strengthen project 
preparation in order to ensure future absorption  of IPA funds.. Overall, preparations in the 
area of regional policy and coordination of stru ctural instruments need further effort and 
improvements. 
4.23. Chapter 23: Judiciary a nd fundamental rights 
There was limited progress in the reform of the judiciary. 
The Judicial Council and the Council of Public Prosecutors had a mixed record in securing the 
independence of the judiciary. Among 54 graduates from  the first and second generation from 
the Academy for Training of Judges and Prosecu tors (ATJP), 39 were recruited into the 
 
EN 57   EN judiciary. Since September  a total of  68 judges were recruited, as well as 12 new presidents of 
courts. Out of 26 judges recruited for higher courts 22 came from the judiciary. The principle 
of equitable representation is respected by both councils. 
The Judicial Council made some further efforts to combat corruption and ensure impartiality,  
dismissing 6  judges for abuse of office. Legal amendments were adopted to provide for a 
unified salary system for judges, prosecutors  and members of the judicial council and the 
council of public prosecutors.  
However, the role of the Minister of Justice within the Judicial Council and the Council of 
Public Prosecutors raises seri ous concerns about the interfer ence of the executive power and 
political control in the work of the judiciar y. Controversial dismissals and undue interference 
by the Minister of Justice indica te that the current system is not in compliance with European 
standards.  
The Constitutional Court abolishe d the rulebooks on assessment of judges' performance; on 
disciplinary liability of judges; and on the manner for determining unprofessional 
performance of office, as they were defined through implementing legislation instead of the 
law. Further efforts are needed to ensure that the assessment of judges' professional ability is 
not made primarily on the basis of quantitative cr iteria, such as reversal rates of judgements, 
but also on qualitative crit eria in line with Council of Europe recommendations. 
As regards professionalism and competence , a new law on ATJP was enacted in July aiming 
inter alia to further define the criteria on selection of judges. Th e third intake of 17 students at 
the Academy for Training of Judges and Prosecutors (ATJP) completed the theoretical part of 
the training and started the practic al part. It was determined that  the fourth intake would be 
reduced to 9 students only, which reduces the role of the ATJP in providing the initial training 
of magistrates. The ATJP provided continuous training to almost 7000 participants in over 
240 events.  
Efforts continued to improve the efficiency of the judiciary. The 2009 budgets for the courts 
and for the Public Prosecutor's Office were s lightly increased (by 1 %). The court budgetary 
council enabled a higher rate of absorption of th e funds allocated to the courts. Most of the 
basic courts maintained the trend of reduc ing their backlog. The council of judicial 
administration established a register of empl oyees in court administration. The number of 
employees in the judicial administration increased slightly. The Automated Court Case Management Information System (ACCMIS) is fully implemented in all courts. The courts published nearly 34,000 decisions. Th e facilities of two more basi c courts, and of the court of 
appeal in Gostivar were improved. However, the law on enforcement was amended in July, extending the deadline for transfer of over 60 0,000 enforcement cases from the courts to 
bailiffs to 2011; this has delayed re duction of the backlog in courts.  
The judicial inspections by the Ministry of Ju stice have revealed improved results regarding 
general courts' performance. Regular supervis ions were performed on the work of notaries 
and bailiffs. As a result 7 not aries were fined, and 15 disciplin ary procedures were initiated 
against bailiffs.  
Inclusion of the graduates from ATJP in judi ciary was delayed due to the continued absence 
of a comprehensive human resource management sy stem and lack of interest from graduates 
to apply for positions outside Skopje and othe r major cities. There is no mandatory ATJP 
programme for magistrates recruited directly from the legal professions.  
 
EN 58   EN The number of enforcement agents is insuffici ent, leading to delays in enforcement of 
decisions. The law on mediati on is applied infrequently, w ith only 12 new cases. Delayed 
amendments to the law on criminal procedure are hampering the full implementation of the 
2007 law on the public prosecutor's office. The sy stem of appeals to the decisions of the 
Administrative Court re mains to be introduced. 
The budgetary constraints do not allow for suffi cient staff in the courts and prosecutors' 
offices. The budget of the ATJP decreased by 2.3% compared to 2009. The Council of Public 
Prosecutors lacks staffing and equipment and its budget is still a part of the budget for Public Prosecutor's Office. 
Overall, the backlog of cases in courts in  2009 was approximately 15% lower than in 2008. 
However, the four courts of appeal, the admi nistrative court and cert ain major basic courts 
including Skopje 2, were not able to reduce their backlogs. With more than 900.000 cases 
pending before the courts, substantial further efforts are needed to reduce the backlogs. 
The Council for Judicial Reform , chaired by the Minister of Ju stice, has not met since May 
2009. The Ministry of Justice remained unders taffed including in prio rity departments. 
Further efforts are needed to establish re liable and comprehensive statistics on the 
implementation of judicial reform. The Public Prosecutor's Office needs access to internet and 
intranet. 
Overall, limited progress was made in judicial  reform, a key priority of the Accession 
partnership. Budget management was improv ed. The backlog of cases in courts was 
somewhat reduced. However, the absence of a comprehensive human resources management plan has led to the weakening of the Academy for Training of Judges and Prosecutors, as the 
principal source of recruitment in the judiciary. Continued efforts are needed to ensure the independence and impartiality of the judiciary through the proper functioning of the Judicial 
Council and the Council of Public  Prosecutors. Lack of reliable and consistent data on court 
cases hampers a thorough assessment on the real e ffects of judicial refo rm and the definition 
of remedial strategies. In this area, the country is moderately advanced.  
Some progress can be re ported in the area of anti-corruption policy . From the first Group of 
States Against Corruption (GRECO) eval uation round twelve out of thirteen 
recommendations have been implemented. Further steps were taken to implement the GRECO recommendations from the second round of  evaluations thus leading to the fulfilment 
of all 14 recommendations. The third GRECO evaluation round coveri ng the financing of 
political parties and incriminations was finalised and the GRECO reports were released in August 2010. These comprise 13 recommendations.  
The amendments to the Criminal Code are applicable since Marc h 2010 as regards the 
criminal liability of legal pe rsons, introducing illic it enrichment, abuse of public procurement 
procedures, the complementary penalty of interd iction of the exercise of profession and fraud 
to the detriment of EU funds. A law on public se rvants was enacted which sets up a regulatory 
framework for public officials other than civil servants.  
Large scale police operations led to the arrest  of more than 60 police officers from three 
border crossing points and more than 35 doctors a nd officials from the Pension and Disability 
Insurance Fund charged with corruption offences . First instance convictions to imprisonment 
have been rendered for 44 of the border police officers. The number of suspended 
imprisonment sentences dropped to 2% in 2009 as compared to 48 % in 2008. Some 
 
EN 59   EN additional training activities on confiscation and seizure were carried out for judges, public 
prosecutors and law enforcement agents. Sin ce 2007 until 2009 the orde red confiscations and 
seizures showed a slightly increasing trend. Howe ver, the number of cases in which seizure or 
confiscation of assets were ordered remains lo w. Also, the majority of prosecuted corruption 
cases are for abuse of official position while prosecutions concerning other corruption offences such as bribery are scarce. 
The capacity of the specialised unit on intercep tion of communications within the Organised 
Crime Department of the Ministry of Interior was strengthened. The interception equipment is 
now separate from the one of counter-intelligen ce service. The Basic Prosecutor's Office for 
the Fight against Organised Crime and Corruption filled in most of its prosecutorial positions 
and was structured into two sepa rate departments: one for offen ces against official duties and 
other for violent offences and another for offe nces against human rights, human health, public 
order, humanity and international law. 
In 2009, the Sector for Internal Control and Professional standa rds within the Ministry of 
Interior brought 36 criminal charges against 50  police officers for 44 criminal offences of 
which 36 were corruption relate d (40% less than in 2008).  
In 2009, the State Commission for Prevention of  Corruption (SCPC) adopted a programme 
for training the trainers in the public administra tion on conflict of intere st related matters and 
held 9 training sessions for judges, public pr osecutors and civil serv ants on conflict of 
interest. 63 conflict of interest cases were in itiated in 2009 and 50 were completed. In 20 
cases conflict of interest was found. The SCPC  adopted a template for the declarations of 
interest. Only 1,708 elected and appointed offi cials (i.e. approximately 50%) submitted their 
asset declarations within the deadline pres cribed by the law and 3,223 by the end of July 
2010. The SCPC initiated 40 misdemeanour proce dures against the elected and appointed 
officials who failed to submit the declarations of interest and 217 against local self government officials. Also, the checks are not systematic. Thus a track record of 
implementation remains to be established. 
In 2009 SCPC initiated 58 misdemeanour procedures  for failure to submit asset declarations. 
16 fines were imposed, 8 misdemeanour warnings  were applied and 5 cases were dismissed. 
The Office for Prevention of Money Laundering a nd Financing of Terrorism gained access to 
the database storing the asset d eclarations of elected and appoin ted officials within the SCPC. 
The SCPC submitted 29 requests to the Publ ic Revenue Office (PRO) in 2009 for checking 
asset declarations of elected and appointed offi cials. In 48% of these cases the procedure is 
ongoing, 12 cases were dismissed and in 2 cases of  two municipality mayors the PRO taxed to 
70% the unjustified wealth. U pon its own initiative,  PRO opened 6 cases in 2009 of which 
three were dismissed and in the other three 70 % taxation of unjustified wealth was applied. 
The SCPC took some steps to address the rema ining backlog of cases and in 2009 increased 
the rate of processing complaints with 60% a nd the rate of completed cases with 46% as 
compared to 2008. 
Cooperation among law enforcement agencies furt her improved. Two more institutions (i.e. 
the Broadcasting Council and Securities Exchan ge Commission) joined  the anti-corruption 
cooperation protocol, bringing the nu mber of signatories to 17. Fu rther steps were taken to set 
up the National Intelligence Database, includ ing the securing of the necessary funds. 
The country moved one rank up in the Transparency Interna tional Corruption Perceptions 
Index 2009. Progress was registered in the publication of court decisions. 
 
EN 60   EN However, corruption remains a systemic proble m. The track record in processing cases 
including high level corruption cases remains to be consolidated. First instance court 
decisions in the five high leve l corruption cases in which the defendants (i.e. a former prime 
minister, a former minister of defence, a fo rmer governor of the National Bank) had been 
convicted to imprisonment were overturned due to procedural errors in first instance and sent 
back to the lower court for the re-opening of procedures.  
The concerns regarding independence of the judi ciary weaken the capacity of the judiciary to 
deal with sensitive high level corruption ca ses. The limited capacity of the Criminal Law 
Section in the Skopje Court of Appeal was furt her weakened by the suspension of more than 
half of its judges for disciplinary procedures . Two of the judges who underwent disciplinary 
procedures were dismissed by the Judicial Counc il and the other three re turned to the Court 
after three months. The joint tr ainings organised for prosecut ors and judges on investigative 
measures and administration of evidence in co rruption and organised crime cases are still 
insufficient.  
The legislative framework on interception of  communications foresees approval by the 
minister of interior of each interception orde r. The legislation is silent on the use of 
environmental interception (i.e. placing of microphones and/or video cameras in a given 
environment) and leads to inconsistent interp retation in practice of the required level of 
authorisation. 
The vast majority of the corruption cases pros ecuted and brought before courts are for abuse 
of official position, while the cases of typi cal corruption offences  (e.g. bribing, trading 
influence) are scarce. The penalti es applied by the courts tend to be lenient. The decisions of 
the public prosecutors for non-indictment are not  being reviewed by a judge, thus creating a 
potential risk for outside in terference in the high level or political co rruption cases. 
Unsatisfactory steps were taken to prepare fo r the entry into force of provisions of the 
Criminal Code concerning enforcement agents. Al so, the provisions on illicit enrichment have 
not been implemented. The number of support st aff of the Basic Public  Prosecutor’s Office 
for Fight against Organised Crime and Corrupt ion remains insufficient. The Anti-corruption 
Unit within the Organised Crime Department of the Ministry of Interior has only 50% of its 
organisational chart appointed. The human res ources capacity of the Sector for Internal 
Control and Professional Standards within the Ministry of Interior  is low. There is insufficient 
specialisation of law enforcement agents and judiciary at local level, notably on petty corruption. The number of dissuasive disciplin ary sanctions and criminal charges brought 
against customs officers for corrupt behaviour slightly decreased. The Agency for Managing 
Confiscation of Assets has insufficient human  resources and financ ial capacity to fully 
perform its tasks. 
No sanctions have been applied to the political parties which brea ched the rules on financing. 
VMRO, SDSM and DUI submitted their reports a year after the deadline. No prosecutions have been registered so far in the cases c oncerning expenditure in electoral campaigns. The 
GRECO recommendation regardi ng guidelines on requests for lifting immunity for members 
of parliament is still not implemented. 
The recent amendments to the law on conflict of  interest introducing the officials’ obligation 
to submit a declaration of interest were not eff ective. The declarations of interest are treated 
as confidential and the respons ible institutions only register  them without carrying out any 
checks. No convincing track-record on checking a sset declarations for elected and appointed 
 
EN 61   EN officials has been established. The asset declarat ions for officials who have not been elected 
or appointed are confidential and ar e not being checked on substance. 
The number of petitions submitted to SCPC decreased in 2009 by approximately 31% as 
compared to 2008. The level of public trust in  the SCPC’s independence and impartiality 
continues to be low. The SCPC continues to be more reactive th an pro-active, acting mainly 
upon complaints. 
The number of complaints submitted to the Na tional Commission for Protection of the Right 
to Public Interest Information dropped signifi cantly (50%). Informa tion related to public 
expenditure continued to be  subject to various exceptions provided by the law. 
Overall, some progress was made on anti-co rruption policy. The track  record on high-level 
corruption cases remains to be consolidated. Th e preparation of the en try into force of new 
Criminal Code provisions, like those on illic it enrichment, was insufficient. The new 
legislation on conflict of interest and financing of political parties have shown little results so 
far. The asset declarations are not being properl y checked on substance an d the declarations of 
interest are not being checked at  all. The country partially meet s its priorities in this area. 
Limited progress has been made in the area of fundamental rights . (See also under Political 
criteria, and Chapter 19: Social policy and employment. ) 
The number of complaints received in the Ombudsman's office in 2009 amounted to 3,632 
which represents an increase of 20%. Violatio ns were found in 30% of cases. The highest 
number of the violations wa s in the area of property rights (20%), followed by labour 
relations (12%, of which many among them coming from the civil servants in the local self-
government units in the aftermath of the local elections); judiciary ( 9.6%); and violation of 
consumers rights (8.7%). The responsivene ss of the competent institutions to the 
recommendations of the Ombudsman decrease d to 71% compared with 84.4% in 2008. The 
second instance Government commissions we re again the least responsive to the 
Ombudsman's instructions, followed by the Ministry of Interior – notably the units for Border 
control and migration, and for st atus rights of the citizens.  
As regards the prohibition of torture and inhuman or degrading treatment or punishment , 
there was progress in the long- term planning for construction and rehabilitation of prisons. 
The strategic plans have yet to undergo a proper prioritisation and a balance among the short-, 
medium- and long-term measures. The conditions in some prisons remain of serious concern. 
Investigation and prosecution of allegations of i ll-treatment are still insufficient. The lack of 
budgetary resources jeopardised  regular functioning of th e newly established unit on 
combating torture in the Ombudsman office.  
With regard to respect for private and family life  the Directorate for pe rsonal data protection 
continued with its satisfactor y performance. Amendments to the law on personal data 
protection were adopted in order to strengthen the position of the Directorate and to improve 
the implementation of the law. Capacity bu ilding activities are unde rway. However, the 
Directorate received a reduced budgetary allocati on. Also, there is no re ference in the law to 
any form of judicial intervention. 
Some progress was regist ered in the field of freedom of thought, c onscience and religion. 
Under the law on the legal status of church es, religious communities and religious groups, 
registration was completed for 27 religious  entities, with no pending applications. 
 
EN 62   EN With regard to freedom of expression, including fr eedom and pluralism of the media , the legal 
media policy framework is satisfactory, bu t its implementation has been uneven. The 
collection of the viewing license  fee has started to improve bu t the sustainable funding of the 
public broadcaster and the Broadcasting Council s till needs to be secured. The ownership of 
the print media is still highly concentrated and the concentration and transparency rules 
should be fully applied in the audiovisual media. The number of libel charges and 
intimidations against journalists multiplied and the media continue to be subject to 
interference from political and business interests. (See also  Chapter 10) . 
Some further progress  was registered in freedom of assembly and association, including the 
right to form political parties and the right to establish trade unions . The registrations process 
required under the amended law on labour relations was completed for 33 active trade unions 
and 6 employers' associations. The newly enacted law on citizens' associations and foundations allows for a wider practice of the right of association. However, there are 
concerns with regard to the procedure for obt aining a status of public benefit organisation.  
Limited progress can be reported in  treatment of  socially vulnerab le and persons with 
disabilities, and the principle of  non-discrimination. The 2010-2018 National Strategy on 
Equality of Rights of People with Disabi lities was adopted, and the process of 
deinstitutionalisation continued. However, the acce ss to health and special care, and social 
integration of people with disa bilities continues to be lim ited. There was uneven progress in 
the area of anti-discrimination.  A Framework law on anti-discrimi nation has been enacted but 
the Law omits "sexual orientation" as grounds  for discrimination. Also, the nature and 
competences of the equality body do not meet th e Paris principles and the Law is not fully 
aligned with the acquis . The Commission for Protection Agai nst Discrimination is composed 
of only 7 members and does not ha ve a secretariat. Independent performance of the tasks by 
the Commission should be guaranteed. 
There was little progress as regards the right to education . The number of enrolments to the 
secondary schools has increased; however, there is large absenteeism among pupils as well as 
drop-outs. Drop-outs are higher before the comple tion of primary education. Literacy is low 
with a substantial number of pupils in the country having low standards in reading and 50% of the population at most having completed primary education. Large funds have been invested 
in education infrastructure; however, high re gional disparities still remain in access to 
education.  
The guarantee for the right to property has been further ensured with the establishment of the 
cadastre for over 97.5% of the country's territo ry. Still, full respect is hindered by the 
protracted process of restitution of propert y confiscated during th e socialist period. The 
Ombudsman's Office found unjustified delays in  several procedures for restitution of 
property. The changes to the law on denationa lisation, in force since June, foresee 
compensation, instead of returning of property in  cases where the proced ure has lasted longer 
and legal and factual problems have occurred. The amended law foresees an appeal procedure 
with the Administrative Court.  
Some limited progress is registered in gender equality and women’s rights. The law on equal 
opportunities between men and women is being implemented. A Mediator for treatment of 
complaints has been appointed and her mandate  and a public campaign are in preparation. The 
compulsory annual reporting has improved. The participation of wome n in politics remains 
limited at local level. A few actions targeting Roma women have been implemented, while nothing has been done to address women right s in the rural areas. Implementation of 2008-
 
EN 63   EN 2011 strategy on combating domestic violen ce has continued, although the national 
coordination body has a weak  monitoring capacity.  
With respect to the  rights of the child, the law on protection of children has been amended. An 
updated Action Plan for the implementation of j uvenile justice law c overing the period 2010 – 
2012 was developed. However, the standards and protocols for the implementation of the law 
on juvenile justice are not yet in place and the mechanisms for monitoring its enforcement are not effective. The provisions of the internationa l instruments and obligations continue to be 
largely unapplied. The Council of Europe Conve ntion on the Protection of Children against 
sexual exploitation and Sexual Abuse is still not  ratified. The number of reported cases of 
physical and sexual abuse has increased, but its real size remains unknown. Children with 
disabilities, street children and children fr om marginalised communities remain the most 
vulnerable groups.  
With regard to liberty and security and right to a fair trial , the law on legal aid in all court and 
administrative procedures was enacted in Decemb er. Its application started in July, except of 
few provisions which will be applying afte r 1 January 2012, and a few more upon the 
country's accession to the EU. Fu rther efforts are needed to st rengthen the witness protection 
system.  
Little progress was made on minority rights and cultural rights . The legislative framework for 
protection of non-majority communities is largely in place, but its effective implementation is 
yet to be ensured, together with a full re spect of the spirit of the Ohrid Framework 
Agreement. Some progress was made in implementing the strategy for equitable 
representation of non-majority communities in the public sector. However smaller communities, notably Roma and Turks, remain at a disadvantage. The implementation of the 
Roma Strategy and the four action plans of th e Decade of Roma Inclusion continued to be 
delayed due to insufficient budget and inadequate  institutional capacity.  Further efforts are 
needed to improve access of the Ro ma to identification documents. 
There were no developments in relation to EU citizens’ rights . 
Limited progress was made in safeguarding fundamental rights. While the legislative 
framework is broadly in place no sustained e fforts were taken for its implementation. Much 
remains to be done for both promotion and protection of human rights. Limited funding 
hinders the establishment, staffing or functioni ng of the institutions. The situation is even 
more acute at the local level. In this area, the country is moderately advanced. 
Conclusion 
There has been limited progress in reform of the judiciary and in safeguarding fundamental 
rights and some progress in addressing corrupt ion. Budget management of the courts was 
improved and the backlog of cases was somewhat reduced. However, the absence of a comprehensive human resources management plan  has led to the weakening of the Academy 
for Training of Judges and Prosecu tors, as the principal source of  recruitment in the judiciary. 
Continued efforts are needed to ensure the in dependence and impartial ity of the judiciary 
through the proper functioning of the Judicial Council and the Council of Public Prosecutors. 
Lack of reliable and consiste nt data on court cases hampers a thorough assessment on the real 
effects of judicial reform and the definition of remedial strategies.  
 
EN 64   EN The track record on high-level corruption cases remains to be consolidated. The preparation 
of the entry into force of new Criminal Code provisions, like those on illicit enrichment, was 
insufficient. The new legislation on conflict of interest and financing of political parties had shown no results so far. The a sset declarations are not being properly checked on substance 
and the declarations of interest are not being checked at all. As regards fundamental rights, 
while the legislative framework is broadly in pl ace further sustained efforts are needed for its 
implementation. Much remains to be done for bot h promotion and protection of human rights. 
Overall, the country is moderate ly advanced in this area.  
4.24. Chapter 24: Justice, freedom and security 
Some progress has been made in the area of migration . Amendments to the Law on 
employment of foreigners have been enacted  with the aim of eas ing the procedure for 
obtaining employment permits for self-employe d foreigners. The government has adopted an 
action plan for the implementation of the resolution on migration policy 2009-2014 and the 
national migration profile for 2009. An action pl an for the implementation of the national 
strategy for integration of refugees and fo reigners 2008-2015 has also been adopted. The 
former Yugoslav Republic of Macedonia has conti nued to share statisti cal data on irregular 
migration with Albania, Bosnia and Herzegovi na, Croatia, Montenegro and Serbia and to 
participate in the regional early warning system. In the period September 2009-September 
2010, 1275 irregular migrants have been detected, of whom 1155 ha ve been returned. The EU 
readmission agreement has continued to be implemented smoothly. 697 persons were received in accordance with th e EU readmission agreement and bilateral agreements. The 
government has adopted programmes for the reinte gration of readmitted persons and created a 
centre for this purpose. The stra tegy for integration of refug ees and aliens is not fully 
implemented.. The central database for aliens, c overing asylum, migrati on and visas, is still 
being developed. The Ministry of Labour and Social Policy continues to lack sufficient 
human and budgetary resources. In this area, the country is well advanced. 
Good progress has been made in the area of asylum . Further amendments to the Law on 
asylum and temporary protection ha ve brought it closer to the EU acquis  and international 
standards. The transition from humanitarian to subsidiary protecti on has been completed. 
Eligible persons previously unde r humanitarian protection have been, with few exceptions, all 
granted subsidiary protection and identity documents with a validity of at least one year. The 
reception conditions in the centre for asylum-s eekers in Vizbegovo are satisfactory. In the 
period September 2009-September 2010 97 asylum-seekers were accommodated in the centre. As of March 2010, the national authorities ha ve the responsibility to provide monthly 
financial assistance to recognised refugees and persons under subsidiary protection. The 
Administrative Court has continued to rende r its decisions on asylum cases mainly on 
procedural rather than substantive aspects, a nd without hearing the applicant. Further efforts 
are needed to ensure full im plementation of the new legal fr amework and to provide persons 
of concern with the relevant information on pr ocedures, access to education, health care and 
timely financial assistance. Free legal assistance is not provided by the state and appointment of legal guardians of unaccompanied minors remain s an issue. The administrative capacity of 
the section for asylum in the Ministry of the Interior and coordination with the other 
competent institutions are not adequate. In  this area, the country is advanced. 
There has been good progr ess in the area of visa policy  and the wider framework of the visa 
liberalisation dialogue. Visa-free travel to the Schengen area entered into force in December 
2009 for holders of biometric passports, after th e country had fulfilled the requirements of the 
 
EN 65   EN visa liberalisation roadmap. The authorities have  reacted swiftly to the sudden surge, at the 
beginning of 2010, following the entry into force of  the visa-free regime, of emigrants from 
the country who have introduced  ill-founded asylum claims in Belgium and several other 
Member States. A high-level committee has been es tablished, urgent measures were taken and 
more effective public messages were delivered. As a result, the trend was reversed in the first half of 2010. However, a new rise in asylum  applications was registered in August and 
September. Efforts to address this issue are ongoing. 
However, the authorities need to continue in forming citizens about the rights and obligations 
stemming from visa-free travel. Th e national visa system N-VIS is  fully functional and in use. 
44 out of 45 diplomatic and c onsular missions of the countr y, together with eight border 
crossing points and the employment agency, are connected to N-VIS. More than 950.000 
biometric travel documents have been issued so  far. The country has no t yet fully aligned its 
legislation with the EU negative and positive lis ts and in particular maintains a visa-free 
regime with neighbouring countries  in the interest of a regiona l approach. In this area, the 
country is well advanced. 
Good progress can be repor ted in the field of external borders and Schengen . The border 
demarcation process with Kosovo has been co mpleted and a police cooperation agreement, 
including the possibility of joint border poli ce patrols, has been signed with the Kosovo 
authorities. The country has maintained good c ooperation with Frontex on the basis of the 
working arrangement and participates in th e Frontex developed Western Balkans Risk 
Analysis Network. An upgraded strategy for inte grated border management and the relevant 
action plan have been adopted for the period 2009-2013. Training is delivered on the basis of 
common EU standards. A border police mobile un it for inland detection of irregular migrants 
has been established. The first phase of implementation of the TETRA radio communication system has been completed. The risk analys is strategy and the standard procedures for 
ensuring risk analysis that have been adopted are not yet fully implemented. There is still no 
central database of false and genuine docum ents and no central database of specimen 
documents. The border police continue to lack  adequate technical equipment and budgetary 
resources, in particular fo r border surveillance. Police st ations responsible for border 
surveillance still have no access to the database of the Ministry of the Interior. Preparations in 
the area of external borders and Schengen are advanced. 
Some progress can be reported in judicial cooperation in civil and criminal matters , 
especially in the implementation of previously ratified agreements. The Ministry of Justice 
has processed more than 400 requests (issued or  received) in criminal matters. Training has 
been organised for law professionals on implemen tation of the main international instruments 
for cooperation in civil matters. Three bilate ral agreements are negotiated with Kosovo on 
mutual assistance in criminal matters, extradit ion, and transfer of c onvicts. The agreement 
with Eurojust has entered into  force on 23 June 2010. In this ar ea, the country is moderately 
advanced. 
There has been progress in the area of police cooperation and the fight against organised 
crime . In October 2010, an agreement estab lishing a regional office for improving 
cooperation in the fight against organised cr ime was signed with Albania, Bosnia and 
Herzegovina, Croatia, Montenegro and Serbia
. An international law enforcement coordination 
unit has formally been established. The S econd Additional Protocol to the European 
Convention on mutual assistance in criminal matte rs is being implemented, in particular with 
regard to the enforcement of special investig ative measures in organised crime cases of 
smuggling of migrants and trafficking in drugs.  23 international arrest warrants have been 
 
EN 66   EN executed in the country in 2009. Police reform ha s registered further progress. The Ministry 
of the Interior has adopted most  of the necessary implementing legislation and has established 
working groups for monitoring its implemen tation. The Systematisation Act that will 
introduce a merit-based caree r and appraisal system remains to be adopted.  (See also Section 
2 — Political criteria)  
Amendments to the Criminal Code have entered into force, increasing the level of penalties 
for certain offences and allowing the use of sp ecial investigative measures in more cases. 
Moreover, the amendments have introduced new crim inal offences, in particular in the area of 
criminal liability of legal persons, and increa sing penalties for crimes perpetrated in the 
framework of a criminal associ ation, such as cyber crime, economic crime, corruption, child 
pornography, trafficking in human beings, terr orism. Extended confiscation for organised 
crime, money laundering and terrorism-related offences has also been introduced in the 
Criminal Code. The training of law enforcemen t agents, prosecutors and judges organised so 
far on the new provisions of the Criminal Code , including crucial issu es such as extended 
confiscation and illicit enrichment, has been far from sufficient. 
In 2009, the witness protection programme has b een activated in three cases. However, the 
witness protection unit has inadequate premises and equipment. The measures taken to ensure 
compensation of victims of organised crime were not sufficient.  
The scope and the quality of the analysis carried  out by the criminal intelligence and criminal 
analysis units within the Mini stry of the Interior has incr eased significantly (e.g. 87.5% 
increase in the number of analyses carried out in 2009 as compared to 2008). However, the 
national intelligence database  will not become operational before the end of 2012. The 
operational cooperation agreement with Europol has not yet been signed. The agreement is 
urgently needed in order to enable opera tional cooperation with Europol enhancing the 
effectiveness of the fight agains t organised crime, terrorism a nd other forms of serious crime.  
Further steps have been taken with a view to staffing and e quipping the sector for special 
investigative techniques of th e department for organised crim e. All interception orders are 
now enforced by this sector with equipment sepa rate from the office for security and counter-
intelligence. Amendments to the Law on electronic communications have been enacted, including technical provisions  on the obligations of th e telecommunication operators 
regarding the implementation of intercepti on orders. The implementation of the Law on 
interceptions has strengthened the effectiveness of investigations. However, the direct involvement of the Ministry for the Interior in authorising the use of interceptions is against 
EU standards. Moreover, the external oversight mechanism needs to be strengthened. The customs administration and the financial police do not enforce special investigative measures 
orders, even if the Criminal Procedure Code a llows them to do so. The case-law and the law 
enforcement agents’ interpretations of the legal concept of organised crime remain inconsistent. 
In the area of the fight against cyber crime, th e amendments to the Criminal Code introducing 
new offences in the area of skimming, ch ild pornography, xenophobia and racism on the 
internet have entered into force. First investig ations of the new crimin al offences have been 
initiated. However, only limited  steps have been taken for the implementation of the sixth 
action-oriented measure for the fi ght against organised crime.  
Overall, the staffing of the orga nised crime unit within the Minist ry of the Interior has reached 
a level of only 65% of the total number of posts in the organisational chart. The effectiveness 
 
EN 67   EN of the organised crime department is hamper ed by insufficient staffing of the units for 
criminal analysis and special investigative techniques. The administrative capacity of the cyber crime unit also remains insufficient. Overall, the numbers of specialised law 
enforcement agents at regional and local level are not sufficient. 
Some progress has been made in  the fight against trafficking of human beings. Amendments 
to the Criminal Code provisions on trafficki ng in human beings and smuggling of migrants 
for cases where juvenile victims are concerned have entered into force. An updated national 
strategy for combating trafficking in human be ings and irregular mi gration, a corresponding 
action plan with secured budget covering the period 2009–2012 and an action plan for combating trafficking in children for 2009–2012 ha ve been adopted. A decision has been 
taken to set up a national shelter for admission a nd care of victims of trafficking. In addition 
to domestic victims, it will host foreign victims with a temporary residence permit. Intensive training of law enforcement agents took place  to improve identific ation skills (not many 
victims have been identified), referral and c oordination structures for victim protection. 
However, a decrease of about 20% in discovered cases of human  trafficking and 34% in cases 
of smuggling of migrants has been noted in 2009 as compared to 2008, following the general 
trend in the region. In 2009, 17 persons have been  prosecuted for trafficking of 8 victims, 
including 7 minors. Court proceedings are ongoing for these cases, but there have not been 
any convictions in 2009. Detec tion of labour exploitation cas es remains a challenge and 
further joint training for labour inspectors, law enforcement agents, prosecutors and the judiciary is needed. More efforts are needed in  order to protect victim s and facilitate their 
reintegration into society. Despite considerable  challenges in the area of police cooperation 
and the fight against organised cr ime, the country is advanced.  
Good progress can be reported in the fight against terrorism . Amendments to the Criminal 
Code which have extended the definition of  terrorism and have included new criminal 
offences related to this area in line with the Council of Europe C onvention on prevention of 
terrorism and the Council Framework Decision  on combating terrorism have entered into 
force. The Law on internal affairs has defined more precisely the competences of the Office 
for Security and Counter-Intelligence. Amendm ents to the Law on the fight against money 
laundering and financing of terrorism have been  enacted. A programme for national security 
and the fight against terrorism covering the period 2009–2011 has been adopted. Bilateral and 
multilateral cooperation has continued to impr ove. In 2009, two suspicious transactions 
specifically related to financing of terrorism have been reported to the Anti-Money Laundering Office, but have not led to a referral to the public prosecutor. Preparations in this 
area are well advanced. The overall statis tics for money laundering are still missing. 
Progress is noted in the fight against drugs . Implementation of the new action plan covering 
the period 2009-2012 is ongoi ng. In 2009, drug seizures have fo llowed an increasing trend in 
terms of quantity, including a number of po lice operations by which some international 
channels of the Balkan route for trafficking in drugs have been eradicated. However, the 
country remains on one of the main Balkan drug trafficking routes. The human resources 
capacity of the Ministry of the Interior and the level of coor dination between central, regional 
and local levels are insufficient . The country largely meets the acquis requirements. 
Good progress has been made in the area of customs cooperation . The customs 
administration has participated in several intern ational operations for detecting illicit trade and 
coordinated eleven of them. C ooperation and exchange of intel ligence data with the customs 
administrations of neighbouring co untries has been intensified, in  particular with Bulgaria, 
 
EN 68   EN Serbia and Kosovo, aimed at facilitating th e movement of goods and passengers, boosting 
effectiveness in preventing and detecting illicit trafficking a nd tackling cross-border crime. 
The Customs Administration has hosted the an nual World Customs Organisation Conference 
of the European region, which has discussed the enhancement of the fight against counterfeiting and piracy. Coope ration with the South-East Eu ropean Cooperative Initiative 
and the Regional Intelligence Liaison Offices ha s been pursued further and information on 
seizures and intelligence data has been exchanged on a regular ba sis. Preparations in this area 
are on track. 
Limited progress can be repor ted in the fight against counterfeiting of the euro . 357 
banknotes have been seized in 2009, compared  to 380 banknotes in 2008. Some training has 
been organised in the area of detection of fo rged banknotes, but overall investigativ e capacity 
remains weak. 
Conclusion 
Good progress can be reported on asylum, visa policy, external borders and Schengen. The 
increase in asylum seekers that arose in the first period of implemen tation of the visa-free 
regime is being addressed. Some progress ha s been achieved on migr ation. The authorities 
need to continue informing citizens about the rights and obligations stemming from visa-free 
travel. The implementation of police reform has continued and international police 
cooperation has improved. However, the role of th e Ministry of the Interior in the procedure 
for enforcing interception orders needs to be addressed. The national intelligence database and the national coordination centre fo r the fight against organised cr ime have not yet been set up. 
The administrative capacity of some specialised units within the organised crime department 
of the Ministry of the Interior needs to be strengthened. Overall,  preparations in this area are 
well on track.  
4.25. Chapter 25: Science and research 
Little progress can be reported in the area of research policy . The 2010 programmes for 
scientific research ac tivities, technological de velopment and technical culture were adopted.  
The 2010 budget for the programme for research  and technological development maintained 
at the 2009 level. Financial re sources are still limited and the capacities of the research 
facilities remain weak. Preparations in this area are moderately advanced.  
Good progress is being made as regard s the country’s part icipation in the framework 
programmes . The number of applications and the projects selected and funded under the 
Seventh EU Research Framework Programme  (FP7) increased. However, participation needs 
to be strengthened in a number of key areas , including mobility of researchers and SMEs. 
Moreover, the administrative capacity needs to be  strengthened in order to ensure effective 
and sustainable participation in EU research  cooperation. In this ar ea, preparations are 
advanced. 
Some progress can be repor ted in the area of future integration into the  European Research 
Area . Representatives were appointed to the th ree main European research bodies: the 
European Research Area Committee, the European Strategy Forum on Research 
Infrastructures, and the Steering Group on Human Resour ces and Mobility. The law 
establishing a National Agency for Nuclear Technologies was adopted. The law creates a 
legal basis for strengthened c ooperation with the European Orga nization for Nuclear Research 
(CERN). Funds were allocated to procure e quipment for universities and laboratories. 
 
EN 69   EN However, the investment in research, from bot h the public and the private sector, remains low 
(estimated at 0.5% of GDP in 2009). The lack of  reliable statistics makes implementation and 
monitoring difficult. A strategy on research an d innovation is still missing. Preparations in 
this area are moderately advanced.  
Conclusion 
Some progress can be reported in the area of science and researc h. The rate of participation in 
the Seventh EU Research Framework Programme has increased. However, the administrative 
capacities to support participation in the fr amework programmes need to be further 
developed. To strengthen participation in framew ork programmes, the research institutes need 
to enhance their capacities and develop stronger links with industry. Preparations in the area 
of science and research are on track. 
4.26. Chapter 26: Education and Culture 
There has been limited pr ogress in the field of education, training and youth . The education 
reform process continued in line with the national education strategy for 2006–2015. An 
external performance assessment of pupils was es tablished. New subjects, such as ethics, 
entrepreneurship, media and the environment, were introduced in schools. Implementation of 
the Bologna process in higher education continues. The co uncil for adult e ducation adopted 
the adult education strategy in the context of li felong learning, and efforts have been made to 
develop a national qualifica tions framework (NQF). The country improved notably its 
performance in all the areas in which EU-lev el benchmarks have been set for 2010 and 2020, 
although it remains in general far below the EU av erage, in particular fo r participation in early 
childhood education and adult participation in lifelong learning The country performed well 
concerning upper secondary school completion rate s. Several local yout h strategies were 
developed. However, resources are inadequate  to implement the education strategy. High 
regional disparities in acce ss to education remain.  
There is limited interaction between members of ethnic communities. The first integrated 
bilingual secondary school st arted classes in September in  Preljubiste. This donor-funded 
project allows for integrated bilingual educa tion three times a week, in addition to extra-
curricular activities. The integr ation of Roma students in s econdary education remains a 
challenge. Training for teachers continues to be poor.  
There was a setback regarding the country’s par ticipation in the Lifel ong Learning and Youth 
in Action programmes. The managing board of the national agency was dismissed and the 
national agency’s director resigned following alle gations on conflict of interest. An audit by 
the Ministry of Education and an  external audit detected irregul arities in the management of 
funds. A new managing board and a new director  have been appointed. The Ministry of 
Education and Science has not yet set up an effective control system assuring the proper 
functioning of the national agency  and ensuring that the management of EU funds complies 
with all applicable rules and high standard s of ethics and integrity. As a result, the 
Commission has suspended the preparatory m easures for the Lifel ong Learning Programme 
and the Youth in Action Programme. Preparations in the area of educat ion, training and youth 
are moderately advanced. 
Some progress can be re ported in the field of culture . The country continued to participate in 
the Culture and in the Europe  for Citizens programmes. The Ministry of Culture adopted 
 
EN 70   EN strategies for the digitisation of cultural he ritage and for the development of creative 
industries. Preparations in the area of culture ar e well advanced. 
Conclusion 
Limited progress has been made in the area s of education, traini ng, youth and culture. 
Reforms continued at all levels of education. Th e country consolidated the improvement of its 
performance in relation to the Education and Training 2020 common benchmarks. However, 
the requirements for the management of the Lifelong Learning and Youth in Action 
programmes are not fulfilled. Interaction betw een the ethnic communities in education 
remains limited. In the area of edu cation and culture the country pa rtially meets its priorities.  
4.27. Chapter 27: Environment 
Some progress was made in the area of horizontal legislation . The national strategy for 
sustainable development was adopted and a c onsultative body advising the government on 
sustainable development policy was established.  Implementing legislation was adopted in the 
area of environmental assessment of plans and programmes. The administrative capacity for 
implementing the Environmental Impact Asse ssment (EIA) and Strategic Environmental 
Assessment (SEA) Directives was improved.  The requirements of the EIA and SEA 
concerning public consultation are still not adequately applied. Preparations in this area are 
advancing well. 
Some progress was made in the area of air quality . The amended Law on ambient air quality 
was adopted as well as some implementing legi slation. Several protocols to the Convention 
on long-range transboundary air pollution were ra tified. The first annu al inventory of air 
emissions following the Corinair methodology was completed. Administrative capacity is still 
insufficient, particularly at local level. The ai r quality monitoring system is still at an early 
stage. Preparations in this field are moderately advanced. 
Some progress was made in the area of waste management . The Law on packaging and 
packaging waste was adopted. Implementing legisl ation was adopted in th e area of municipal 
waste and for specific waste streams . The process of establishing an integrated municipal 
waste management system has started. Regional waste management bodies were set up in two 
regions and the procedure for issuing concessi ons for regional municipal waste landfills was 
launched in four regions. Administrative capacity is still insufficient, particularly at local 
level. Investments in this area are still far from adequate. A system to deal with data 
collection, registration a nd reporting is still not  in place. Preparations in this area are 
progressing slowly. 
Little progress can be re ported in the area of water quality . Some implementing legislation 
was adopted. The implementation of the Water Law was postponed by one year. The administrative capacity to deal with integrated water management is largely insufficient and a clear division of responsibilities in this field st ill needs to be establis hed. Very little progress 
is being made in addressing th e important gaps in the water monitoring system. Planning and 
preparation of infrastructure investment is  lagging behind and the funding is far too low 
compared to the needs in the sector. No progres s was made in applying the user/polluter-pays 
principles. Preparations are lagging behind in this area. 
Little progress was made in the field of nature protection . An amendment to the Law on 
nature protection was adopted. Some progre ss can be reported in the development and 
 
EN 71   EN implementation of some management plans for protected areas. A national strategy and action 
plan for nature protection remains to be deve loped. Staff resources n eed to be increased. 
Financing for the management of protected areas is insufficient. The stakeholders need to be 
sufficiently involved. Preparations in this ar ea are moderately advanced. Some progress was 
made in the area of forestry. The programme  for expanded reproductio n of forests 2010 was 
approved and its implementation started. 
Little progress was made on industrial pollution cont rol and risk management . The 
Convention on the transboundary effects of industrial accidents was ratified. Some 
implementing legislation for control of major accident hazards involving dangerous 
substances and for eco-labelling was adopted. Tran sposition of the legislation in the area of 
large combustion plants is lagging behind. Th e integrated pollution prevention and control 
(IPPC) permitting procedure is behind schedule. The requirements for public consultation in 
relation to the IPPC permitting system are not  always properly applied. Administrative 
capacity needs to be significantly strengthene d, in particular for inspection activities. 
Preparations in this area are slow. 
Regarding  climate change , the country submitted its second national communication under 
the United Nations Framework Convention on clim ate change. Moreover, it associated itself 
with the Copenhagen Accord and introduced mitigation of climate change and adaptation to 
its effects into the key national strategies. Pr ogramming of projects to implement the clean 
development mechanism under the Kyoto Protoc ol continued. The EU Emissions Trading 
Scheme remains to be implemented. In this area, the country is at an early stage. 
Little progress was made in the areas of chemicals and noise . Implementing legislation was 
adopted in the area of ozone depleting subs tances. However, transposition of the EU acquis in 
these fields remains to be completed. Administ rative capacity is insufficient in terms of staff 
and equipment. Preparations in th ese areas are at an early stage. 
The administrative capacity for implementing and enforcing environmental legislation is 
inadequate both at central and at local level.  The coordination mechanisms between ministries 
and bodies responsible for the environment are still weak. Dialogue with and involvement of 
stakeholders needs to be significantly improved. The environmental monitoring and 
information system remains inadequate. The investment in the sector is still extremely low compared to the needs. Environmental protecti on requirements are still not well integrated 
into policy making and implementation in other areas. 
Conclusion  
Overall, preparations in the field of the environment are moderately advanced. Further 
progress has been made in transposing the EU acquis into national legislati on, in particular in 
the air quality and waste management sectors.  However, efforts to align with the EU acquis  in 
the water and climate change se ctors need to be stepped up significantly and operational 
structures need to be put in place or strengthe ned in these fields. Administrative capacity is 
still weak at both central and local level. This is  particularly true for the nature protection and 
industrial pollution and risk management sect ors. Investments need to be significantly 
increased, especially in the waste and water sectors.  
 
EN 72   EN 4.28. Chapter 28: Consumer and health protection 
There has been little progress in the area of consumer protection . As regards horizontal 
aspects , the regulatory and administ rative frameworks remain poor . The consumer protection 
programme for 2009-10 was implemented but suffe red from heavy budget cuts. The funds for 
activities related to the protection of consumers were reduced to less than one third of the 
already limited original budget. The lack of sufficient financia l resources affects mostly the 
work of the main consumer protection organi sation, whose budget was cu t five-fold. The staff 
of the consumer protection department with in the Ministry of Economy was decreased. 
Preparations in this area are on track. 
There is some progress as regards product-safety related issues . A new law on market 
surveillance was enacted. However, the enforcem ent of the consumer protection legislation 
remains weak and market surveillance does not  yet provide for effective and transparent 
protection of consumers. The administrative  capacity of the coor dinating body remains poor 
and the competences of the va rious inspectorates unclear.  
There is no progress with regard to non-safety related issues . The acquis  on unfair 
commercial practices, distance ma rketing of consumer financial services and injunctions has 
not yet been transposed. Prep arations in the area of cons umer protection are advanced. 
There has been some progress in the area of public health . Regarding horizontal aspects , the 
Law on public health was enacted and the govern ment adopted various health programmes. 
The overall funding has increased, mainly for capital investments. A register for human 
resources in health was established pursuant to the Law on health data.  The Law on health 
insurance was enacted providing legal basis for e-health insurance cards, an introduction of 
which is in a testing phase.  Collaboration with civil society has been strengthened through 
weekly meetings between the ministry and health NGOs. A bi-annual collaborative agreement 
was signed with the World Health Organisation (WHO). Preparations  in this area are on track.  
There has been good progr ess in the area of tobacco . The Law on protection against smoking 
entered into force, imposing a general ban on smoking in public places. Enforcement of the 
law is at satisfactory level. Full alignment with the  acquis  is still to be confirmed. Pictorial 
health warnings on tobacco  products were introduced. Preparat ions in this area are well 
advanced.  
Some progress was made in the area of communicable diseases . Full legal alignment with the 
acquis  in communicable diseases remains to be confirmed. Specific health programmes for 
prevention and control of some communicable di seases have been established. A multi-annual 
immunisation plan, including polyv alent vaccinations, has been introduced. The healthcare 
database, including the national early warning sy stem, needs further improvement to become 
fully functional. Preparations in this area are on track. 
There has been some progress in the area of blood safety, where the government adopted 
implementing laws. Reorganisation of the blood transfusion system is in its final stage. 
Legislation in this area is, to a large extent, aligned with the acquis.  Work on legal measures 
in the field of human organs, tissues and cells have commenced.  Preparations in this area are 
on track. 
Limited progress can be re ported in the field of mental health . Efforts are being made to 
de-institutionalise mental health care and m ove from psychiatric hos pitals to community-
 
EN 73   EN based institutions. However, mental health institutions do not have sufficient staff and 
adequate financial resources. Preparations in this area are at an early stage.  
Continued efforts are needed to address the socio-economic determinants of health and health 
inequalities.  Some progress can be noted in the field of cancer. A new programme for the 
early detection of malignant diseases has b een introduced. Monitoring for compliance with 
the Council recommendation on cancer screening will be needed . Efforts are being made to 
raise awareness of cancer issues, but funds are still insufficient. A strategy for palliative care 
was adopted. The cancer registry is established, but not fully operational.  The State Statistical 
Office does not provide disaggregated morbidity data , since it considers this to be a breach of 
the confidentiality of personal data. Limited progress was made in the area of alcohol  
consumption. Regarding  health and environment, a strategy on the adaptation of the health 
sector to climate change (2010-2015) has been adopted . Preparations in these areas are 
ongoing. 
Conclusion 
There has been some progress in the area of c onsumer and health prot ection. In the field of 
consumer protection market surveillance re mains weak and does not ensure effective 
protection of consumers. As regards public he alth, good progress was made in the field of 
tobacco control and some progress was made in other areas. Progress in the area of consumer 
and health protection is hampered by the lack of sufficient financial resources and operational 
structures. Overall, preparations  in the area of consumer protect ion are at an early stage, and 
moderately advanced in the area of health protection. 
4.29. Chapter 29: Customs Union 
Progress was made on customs legislation . The 2010 customs tariff wa s adopted taking into 
account the obligations arising from the Stab ilisation and Association Agreement and the 
changes in the EU Combined Nomenclature. The Law on customs tariffs was amended to 
introduce provisions that will allow the use of integrated customs tariff in the process of 
customs clearance. The Customs Code was amended to introduce an obligation to submit electronic customs declarations and summary import and export declarations. A number of 
customs-related fees, including the fees for l odging customs declarations, for issuing EUR 1 
certificates and for entering goods  into free zones and warehouses , were abolished. However, 
some fees that are not in line with the acquis remain in force. Some of the provisions of the 
Law on technological-industrial development z ones are still not fully  aligned with the acquis . 
Preparations in this area are advanced. 
Some progress has been made on administrative and operational capacity . The strategy for 
training and professional advancem ent continued to be implemented, and guidelines to ensure 
carrier advancement based on merit were adopte d. A regional training centre under the aegis 
of the World Customs Organisation was opened.  The Customs Administration introduced new 
internal procedures and electronic tools, such  as an electronic document management system, 
which support the internal efforts to modernise working methods.  
In the IT area, the preparations for the introduc tion of the new customs declaration processing 
system have intensified and the hardware and system software solutions were installed. The 
one-stop shop system for issuing authorisations for imports and exports and allocation of tariff 
quotas has been further upgraded and new fu nctionalities were introduced. The customs 
 
EN 74   EN administration has adopted a comprehensive ICT strategy, which includes a strategy for 
interconnectivity and interoperability w ith the EU’s IT customs systems.  
Operational capacities for customs controls, including the mobile units, were further 
enhanced, both at the borders and inland. E fforts to combat cross-border crime and 
infringement of intellectual property rights were stepped up and sign ificant quantities of 
counterfeit goods were seized. Th e extended implementation of ri sk analysis and risk-based 
control systems resulted in increased collection of import duties. The customs administration 
participated in several intern ational operations to prevent i llicit trade in goods. Cooperation 
with other customs administrations was furthe r intensified, in particular with those of 
neighbouring countries.  
The Customs Administration needs to conti nue improving its administrative capacity, 
especially by bringing to operation the IT sy stems currently under development, as well as by 
continuing developing its human resource policy, including in the ethics  and anti-corruption 
areas. Preparations in this area are well on track. 
Conclusion 
Some progress has been made in the area of the Customs Union, in particular as regards 
administrative and operational capacity. The custom s legislation is sufficiently aligned with 
the acquis , except in the case of transit. The administrative capacity of the customs 
administration to implement legislation and to tackle cross-border crime and corruption needs 
strengthening. Preparations in this area are on track. 
4.30. Chapter 30: External relations 
There has been good progress in the area of the common commercial policy . The country 
continued gradually to reduce customs duties, in line with its WTO obligations. Customs 
duties were reduced for 426 tariff items. The mo st significant reductions  of duties occurred 
for textiles and textile products. The average customs duty on industria l products was reduced 
to 6.31% (compared to 6.68% in 2009) and the duty on agricu ltural and fisheries products 
remained at 15.98%. The country continued to c oordinate closely with the Commission and to 
align with the policies and positions of the EU in international trade negotiations.  
There were no particular developments regarding export credits . 
The institutions responsible for implementatio n and maintenance of the system for export 
control of dual-use goods signed a memorandum of cooper ation. A database on chemical 
substances, goods and technologies  was created, aimed at preven ting illicit exports of dual-
use chemicals. Preparations in the area of  the common commercial policy are on track. 
In the area of bilateral agreements with third countries , the country ratified investment 
protection agreements with Slovakia and Kuwa it. The number of bilateral investment 
protection agreements ratified rose to 33, of whic h 28 are in force and 16  are agreements with 
EU Member States.  
Some progress can be re ported in the area of development policy and humanitarian aid . A 
unit for humanitarian and development aid with  two employees has been established within 
the Ministry of Foreign Affairs. The ministry coordinated the country’s  humanitarian aid to 
China and Haiti. Preparations in both areas are be ing launched.  
 
EN 75   EN Conclusion 
Progress was made in the area of external re lations, in particular as regards the common 
commercial policy. Institutional capacity is no t yet sufficient to enable the country to 
participate fully in the EU policies in the area of external relations, particularly in the fields of development policy and humanitarian aid.
 
4.31. Chapter 31: Foreign, Security and Defence Policy 
The regular political dialogue between the EU and the former Yugoslav Republic of 
Macedonia continued to cove r foreign policy issues. (Concerning neighbourly relations with 
other enlargement countries and  Member States, see Secti on 2 — Political criteria) 
As regards the common foreign and security policy (CFSP), in the reporting period, the 
country aligned itself with all relevant EU declarations and Council decisions, when invited. 
A database of the common positions and statements the country has aligned itself with was created. 
Implementation of restrictive measures is continuing. A working group was set up within the 
Ministry of Foreign Affairs to review the pro cess of implementing restrictive measures and to 
enhance coordination between th e competent authorities.  
With regard to non-proliferation, the country undertook in itial preparations to become a party 
to the Wassenaar Arrangement on export cont rols for conventional arms and dual-use goods 
and technologies. A law on testing and marki ng firearms and munitions was adopted and 
initial steps were undertaken for alignmen t with Common Position 2008/944/CFSP defining 
common rules governing control of exports of military technology and equipment. Following 
the unsuccessful campaign for collecting ille gal weapons on voluntary basis, amendments 
were enacted to the Law on w eapons allowing voluntary surrender within a time limit of one 
year. 
The country continued to engage actively in cooperation with international organisations  
(UN, OSCE, Council of Europe, etc.). (As regards the International Criminal Court, see 
Section  2 — Political criteria: Regional issues and in ternational obligations)  
With regard to security measures (classified information), the certified computer unit for 
access to the EU network for the electronic exch ange of classified CFSP information (ACN) 
is functional. The country signed bilateral agre ements on exchange and mutual protection of 
classified information with Slovenia and France.  
In the framework of the common security and defence policy (CSDP), the country showed 
sustained commitment to participate in civil and military crisis management operations. The country continued to take part in the EUFO R Althea mission, with a twelve-member medical 
team at Camp Butmir. The country increased  its troop contribution to the NATO-led ISAF 
mission in Afghanistan by 80 soldiers to a total of 260 and continued to participate in the UN-
led peacekeeping/UNIFIL mission in Lebanon by providing one staff officer. The country 
hosted the fourth coordination meeting of the countries participati ng in EUBG 2012/II and 
signed a letter of intent to pa rticipate in this battle group wi th a troop contribution of up to 
150.  
Conclusion 
 
EN 76   EN There has been good progress in the area of foreign, security and defence policy, in particular 
in terms of efforts to ensure better coordi nation between the competent authorities in the 
implementation of internationa l restrictive measures. The c ountry aligned with all EU 
declarations and Council decisi ons and showed continued commitment to participate in CSDP 
operations. Sustained efforts are needed to reduce the number of illegal weapons and to 
ensure tighter control over arms brokering. Over all, preparations in the area of foreign, 
security and defence policy are well advanced. 
4.32. Chapter 32: Financial Control 
Some progress can be re ported in the area of public internal financial control (PIFC) . The 
government adopted a strategy for the developm ent of PIFC, including a short-term action 
plan, but the document does not include me dium- to long-term policy priorities. 
Implementation of the PIFC law is facing impor tant delays. Some public  organisations have 
established units for financial affairs and operati onal internal audit units but further effort is 
needed in all other budget users. Secondary le gislation on financial ma nagement and control 
(FMC) remains overdue and FMC development is  slow. Secondary legislation on Internal 
Audit has been adopted. The draft law on central  financial inspection has not been adopted.  
As regards external audit , parliament adopted a revised Law on the State Audit Office 
(SAO), strengthening its functional and fina ncial independence. The SAO adopted a 
development strategy for 2010-2014, aiming to in crease its independence and further upgrade 
the quality of its audit. Internal  guidelines on the qual ity control of audits  have been adopted. 
The SAO introduced a policy to follow up on pr evious audit findings a nd organised the first 
chartered state auditor exams for its staff. Discussions started on im proving cooperation with 
Parliament, but no formal mechanism for reac tion of the Parliament to the SAO Annual 
Report has been established yet. The independen ce of the SAO remains to be anchored in the 
Constitution. 
Little progress can be reported on protection of the EU’s financial interests . The Ministry of 
Finance’s financial police depa rtment currently serves as the central contact point for 
cooperation with OLAF, without being formally appointed. A fo rmal anti-fraud cooperation 
structure (AFCOS) remains to be named and made fully operational. Limited progress can be reported in the fight against counterfeiting of the euro . Some training was organised in the 
area of detection of forged banknotes, but overall investigative cap acity remains weak. 
Conclusion  
There is limited progress regarding PIFC. Efforts are called for to complete the legal 
framework and to ensure  its implementation, esp ecially in rela tion to the esta blishment of 
Financial Management and Control systems. The new SAO Law reflect s substantial progress 
towards aligning legislation in the area of exte rnal audit and the independence of the SAO.  
4.33. Chapter 33: Financial and budgetary provisions 
In the field of traditional own resources , there was limited progress in improving the 
institutional capacity of the customs admini strations. Implementatio n of anti-corruption 
measures in the customs administration has cont inued. However, internal control and external 
audit of the collection and acc ounting of traditional own resources remain insufficient.  
 
EN 77   EN As regards the VAT resource , the administrative capacity of the Public Revenue Office for 
audit has slightly improved. Inte rnal audit and financial control capacity remains overall 
insufficient in the public administration. Furthe r efforts are needed to  fight tax evasion.  
In the case of the GNI resource , limited progress was made towards producing more 
exhaustive national accounts. There was limite d progress towards app lication of the ESA95 
methodology and the introduction of improved es timates of the extent of the informal 
economy. 
Although the acquis in this area does not require transposition, the establishment of 
appropriate administrative infrastructure is needed in due course to ensure correct 
calculation, collection, payment and control of own resources and reporting to the EU for 
implementation of the rules on own resources.  
Conclusion 
Some progress has been made towards improvi ng the operational capacity of the customs and 
tax authorities, and the State Statistical Office. Further efforts are needed  in areas linked to the 
application of the own resources system, includ ing effective instruments to combat customs 
duties and VAT fraud. A ppropriate coordination structures and admini strative strengthening 
will be needed for implementation of the rules on own resources in due course. The 
preparations in the area are on track. 
 
EN 78   EN Statistical Annex  
 STATISTICAL DATA (as of 14 October 2010)            
The former Yugoslav Republic of Macedonia  
            
Basic data Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Population (thousand)  2 022 2 031 2 039 2 024 2 030 2 035 2 039 2 042 2 045 2 049 
Total area of the country (km²)  25 713 25 713 25 713 25 713 25 713 25 713 25 713 25 713 25 713 25 713 
            
National accounts Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Gross domestic product (GDP) (million national currency)  236 389 233 841 243 970 251 486 265 257 286 619 320 059 364 989 411 728 : 
GDP (million euro)  3 893 3 839 4 001 4 105 4 325 4 676 5 231 5 965 6 720 : 
GDP (euro per capita)  1 926 1 890 1 963 2 029 2 130 2 298 2 564 2 919 3 283 : 
GDP (in Purchasing Power Standards (PPS)  per capita)  5 100.0 5 000.0 5 200.0 5 300.0 5 800.0 6 400.0b 7 200.0 7 900.0 8 400.0 8  400.0 
GDP per capita in PPS (EU-27 = 100)  26.7 25.3 25.4 25.6 26.7 28.4b 30.4 31.7 33.5 35.6 
Real GDP growth rate (growth rate of GDP volume, national currency, % change on previous 
year)  4.5 -4.5 0.9 2.8 4.1 4.1 4.0 6.1 5.0 : 
Employment growth (national accounts,  % change on previous year)  0.3 -1.7 -0.6 -1.9 -2.2 2.1 3.2 4.4 6.1 : 
Labour productivity growth: GDP growth per person employed (% change on previous year)  4.2 -2.9 1.4 4.8 6.4 2.0 0.8 1.7 -1.1 :  
Real unit labour cost growth (national acc ounts, % change on previous year)  -7.0 -0.8 -0.4 2.7 -9.9 -8.6 3.2 -8.8 -2.0 : 
Labour productivity per person employed (GDP in PPS per person em ployed, EU-27 = 100)   48.2 46.2 46.4 48.1 51.4 54.3 55.1 57.0  57.9 : 
Gross value added by main sectors (%)                1.7 -1.1   
Agriculture and fisheries  12.0 11.8 12.4 13.4 13.2 12.8 12.1 10.6 11.6 : 
Industry  26.9 26.1 24.2 24.4 22.7 23.1 22.2 24.3 24.1 : 
Construction  6.8 6.0 6.0 6.3 6.5 6.6 6.4 6.6 5.7 : 
Services  54.2 56.1 57.5 56.0 57.7 57.6 59.3 58.5 58.7 : 
Final consumption expenditure, as  a share of GDP (%)  92.6 94.8 99.5 97.0 98.9 96.5 96.3 93.8 98.5 : 
Gross fixed capital formation, as a share of GDP (%)  16.2 14.8 16.6 16.7 17.8 17.0 17.6 19.6 21.0 : 
Changes in inventories, as a share of GDP (%)  6.0 4.2 4.0 3.2 4.1 3.8 3.9 5.0 5.8 : 
Exports of goods and services, relative to GDP (%)  48.6 42.7 38.0 37.9 41.1 45.5 46.6 52.4 50.9 : 
Imports of goods and services, relative to GDP (%)  63.5 56.6 58.2 54.8 61.9 62.8 64.5 70.8 76.2 : 
            
Industry Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Industrial production volume index (2000=100)  100.0 96.9 91.8 96.1 94.0 100.6 104.2 108.0 113.9 105.1 
            
Inflation rate Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Annual average inflation rate (CPI, % change on previous year)  5.8 5.5 1.8 1.2 -0.4 0.5 3.2 2.3 8.3 -0.8 
 
EN 79   EN             
Balance of payments Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Balance of payments: current account total (million eur o) 1) -112 -263 -402 -170 -362 -122 -23 -421 -853 -483 
Balance of payments current account: trade balance (million euro)  1) -750 -589 -856 -753 -914 -859 -1 001 -1 181 -1 751 -1 551 
Balance of payments current accoun t: net services (million euro) 1) 53 -21 -24 -6 -43 -25 22 25 4 28 
Balance of payments current account: net income (milli on euro) 1) -76 -30 -48 -57 -32 -93 -26 -278 -91 -92 
Balance of payments current account: net current tr ansfers (million euro) 1) 661 377 525 646 628 853 982 1 012 984 1 131 
of which government transfers (million euro) 1) 144 55 103 89 56 53 59 24 48 54 
Net foreign direct investment (FDI) (million euro)  234 499 112 100 260 75 345 507 409 172 
Foreign direct investment (FDI) abroad (million euro) 1) 2) 1 -1 0 0 -1 -2 0 1 9 -9 
of which FDI of the reporting economy in EU- 27 countries (million euro)  : : : : : : : : : : 
Foreign direct investment (FDI) in the reporting economy (million euro) 1) 2) 233 500 112 100 261 77 345 506 400 181 
of which FDI of EU-27 countries in the report ing economy (million euro)  : : : 43 125 41 255 355 264 198 
            
Public finance Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
General government deficit/surplus, relative to GDP (% )  2.3 -2.5 -0.5 0.1 0.4 0.2 -0.6 0.6 -1.0 -2.7 
General government debt relative to GDP (%)  47.9 48.8 42.9 39.0 36.6 39.5 32.9 24.7 21.3 24.1 
            
Financial indicators Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Gross foreign debt of the whole economy, relative to GDP (%)  42.7 44.2 39.3 35.9 48.1 54.1 49.3 49.1 50.8 57.9 
Gross foreign debt of the whole economy, relative to total exports (%)  93.6 108.4 108.5 95.7 121.7 122.8 104.7 92.6 98.0 151.2  
Money supply: M1 (banknotes, coins, overnight dep osits, million euro) 3) 368 415 432 461 470 501 591 772 881 854 
Money supply: M2 (M1 plus deposits with maturity up to two years, million euro) 3) 690 1 145 1 052 1 260 1 475 1 708 2 130 2 72 8 2 913 3 040 
Money supply: M3 (M2 plus marketable instruments, m illion euro) 3) 786 1 267 1 141 1 324 1 542 1 777 2 221 2 872 3 184 3 388 
Total credit by monetary financial institutions to resi dents (consolidated) (million euro) 4) 624 620 657 761 951 1 153 1 504 2  093 2 803 2 913 
Interest rates: day-to-day money rate, per annum (%) 5) 7.2 11.9 14.4 5.8 8.0 9.2 5.6 3.5 4.8 6.0 
Lending interest rate (one year), per annum (%) 6) 17.5 23.0 23.0 14.0 13.0 13.0 9.5 7.5 8.5 10.0 
Deposit interest rate (one year), per annum (%)  : : : : : : : : : : 
euro exchange rates: average of period - 1 euro = … nat ional currency  60.725 60.913 60.978 61.264 61.338 61.296 61.189 61.184 61.265 : 
Effective exchange rate index (2000=100)  100.0 105.9 109.9 114.3 117.3 119.6 119.9 119.4 120.6 : 
Value of reserve assets (inc luding gold) (million euro)  759 844 771 715 717 1 123 1 417 1 524 1 495 1 598 
            
External trade Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Value of imports: all goods, all partners (million euro)  : : 2 105.3 2 031.3 2 354.0 2 601.0 2 979.7 3 795.0 4 587.3 3 615.8 
Value of exports: all goods, all partners (million euro)  : : 1 177.9 1 203.0 1 345.9 1 643.5 1 917.5 2 446.4 2 697.6 1 925.2 
Trade balance: all goods, all partners (million euro)  : : -927.4 -828.2 -1 008.1 -957.5 -1 062.2 -1 348.6 -1 889.7 -1 690.6 
Terms of trade (export price index / import price index)  95.4 97.1 106.4 94.5 82.9 95.6 88.4 107.3 106.1 97.5 
Share of exports to EU-27 countries in value of total exports (%)  : : 55.9 58.9 60.3 56.9 61.3 65.2 59.5 56.2 
Share of imports from EU-27 countries in value of total imports (%)  : : 61.7 60.3 60.8 54.7 53.0 49.6 49.0 52.2 
            
Demography Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Natural growth rate: natural change (births minus deaths) (per  1000 inhabitants)  5.9 5.0 4.8 4.4 2.7 2.0 1.9 1.5 1.9 2.3p 
Infant mortality rate: deaths of children under one year of age per 1000 live births  11.8 11.9 10.2 11.3 13.2 12.8 11.5 10.3 9 .7e : 
Life expectancy at birth: male (years)  70.9 70.9 71.0 71.1 71.4 71.4e 71.5 71.1 72.0 : 
Life expectancy at birth: female (years)  75.6 75.6 75.8 75.7 75.9 76.2e 76.4 75.9 76.1 : 
 
EN 80   EN             
Labour market Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Economic activity rate (15-64): share of  population aged 15-64 that is economically active (%)  59.7 61.8 59.8 61.3 58.8 60.7 6 2.2 62.8 63.5 64.0 
Employment rate (15-64): share of population aged 15-64 that is  in employment (%)  40.3 42.6 40.4 38.5 36.8 37.9 39.6 40.7 41.9  43.3 
Employment rate male (15-64) (%)  49.7 50.6 48.6 45.6 44.4 45.4 48.3 48.8 50.7 52.8 
Employment rate female (15-64) (%)  30.9 34.5 32.0 31.3 28.9 30.1 30.7 32.3 32.9 33.5 
Employment rate of older workers (55-64 ): share of population aged 55-64 that is in 
employment (%)  26.2 27.7 25.8 28.5 24.5 26.2 27.9 28.8 31.7 34.6 
Employment by main sectors (%)                      
Agriculture  : 24.9 23.9 22.0 16.8 19.5 20.1 18.2 19.7 18.5 
Industry  : 29.2 27.5 27.3 25.8 25.8 25.0 24.9 24.8 23.2 
Construction  : 5.9 5.8 6.6 7.0 6.5 7.6 6.4 6.5 6.5 
Services  : 39.7 42.6 43.8 50.1 48.0 47.1 50.1 48.9 51.7 
Unemployment rate: share of labour force that is unemployed (%)  32.2 30.5 31.9 36.7 37.2 37.3 36.0 35.0 33.8 32.2 
Share of male labour force that is unemployed (%)  30.5 29.5 31.7 37.0 36.7 36.5 35.3 34.6 33.5 31.8 
Share of female labour force that is unemployed (%)  34.9 32.0 32.3 36.3 37.8 38.4 37.2 35.6 34.2 32.8 
Unemployment rate of persons < 25 years: shar e of labour force aged <25 that is unemployed 
(%)  59.9 56.1 58.4 65.7 64.8 62.6 59.8 57.7 56.4 55.1 
Long-term unemployment rate: share of labour force that is unemployed for 12 months and 
more (%)  26.9 26.5 27.0 31.2 31.7 32.3 31.1 30.1 28.7 26.3 
            
Social cohesion Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Average nominal monthly wages and salari es (national currency)  10 193.0 10 552.0 11 279.0 11 824.3 12 293.3 12 597.0 13 517.0 14 584 .0 16 096.0 19 957.0 
Index of real wages and salaries (index of nom inal wages and salaries divided by the CPI) 
(2000=100)  100.0 98.1 103.0 106.7 111.4 113.6 118.1 124.5 126.9 158.7 
Early school leavers - Share of population aged 18 -24 with at most lower secondary education 
and not in further education or training (%)  : : 32.2 : : : : : : : 
            
Standard of living Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Number of passenger cars per 1000 population  147.9 152.1 151.1 148.2 122.7b 124.3 118.7 121.9 128.6 : 
Number of subscriptions to cellular mobile telephone serv ices per 1000 population  49.4 109.0 179.7 300.4 491.6 597.6 695.1 884 .2 1 157.9 1 036.8 
            
Infrastructure Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Density of railway network (lines in operation, per 1000 km²)  27.2 27.2 27.2 27.2 27.2 27.2 27.2 27.2 27.2 27.2 
Length of motorways (thousand km)  0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.3 
            
Innovation and research Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Spending on human resources (public expenditure on educat ion in % of GDP)  : : 3.4 3.4 : : : : : : 
Gross domestic expenditure on R&D in % of GDP  0.4 0.3 0.3 0.2 0.3 0.3 0.2 0.2 : : 
Percentage of households who have Internet access at home (%) 7) : : : : 11.0e : 14.0e 16.5e 29.0e 42.0e 
            
Environment Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Greenhouse gas emissions, CO2 equivalent (tons, 1990=100)  : : : : : : : : : : 
Energy intensity of the economy (kg of oil equivalent per 1000 euro GDP)  659.3 668.5 771.4 710.9 685.2 685.6 700.5 660.8 629.1  : 
Electricity generated from renewable sources in % of gross el ectricity consumption  16.9 9.2 11.0 17.9 18.9 17.5 18.7 11.2 9.3 : 
Road share of inland freight transport (% of tonne-km)   60.0 87.0 92.0 94.0 91.0 93.0 92.0 88.0 84.0 : 
 
EN 81   EN  
: = not available 
p = provisional value 
e = estimated value b = break in series 
1) For the period 2000-2002, the values in Euro are calculated using the annual average exchange rate; from 2003 the values in Euro are calculated on the basis of the current exchange rate. 
2) The balance of payments sign conventions are used. For FDI abroad a minus sign means  investment abroad by the reporting econ omy exceeded its disinvestment in the period, while an entry without 
sign means disinvestment exceeded investment. For FDI in the repo rting economy an entry without sign means that investment into  the reporting economy exceeded disi nvestment, while a minus sign 
indicates that disinvestment exceeded investment. 
3) Starting from 2003, data series for money s upply are revised to include data for saving houses. 
4) End of year; starting from 2003, the category Total cr edits by MFIs is expanded with loans granted by saving houses. 
5) Until 2005 data cover transactions with all maturities concluded on the Instituti onalized Money Market. From 2006, data cove r bilateral transactions over night; end of year. 
6) End of year. 7) There are no data for 2005 because ICT survey was conducted in  February 2005, as a pilot survey, and data collected concerne d 2004.             
Energy Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Primary production of all energy products (thousand TOE)  1 595 1 642 1 577 1 666 1 598 1 578 1 617 1 504 1 624 : 
Primary production of crude oil (thousand TOE)  0 0 0 0 0 0 0 0 0 : 
Primary production of hard coal and lignite (thousand TOE)  1 273 1 419 1 356 1 353 1 293 1 288 1 296 1 254 1 378 : 
Primary production of natural gas (thousand TOE)  0 0 0 0 0 0 0 0 0 : 
Net imports of all energy products (thousand TOE)  1 104 1 011 1 486 1 029 1 152 1 248 1 323 1 469 1 403 : 
Gross inland energy consumption (thousand TOE)  2 765 2 677 2 892 2 740 2 749 2 863 2 925 3 039 3 022 : 
Electricity generation (thousand GWh)  6.8 6.4 6.1 6.7 6.7 6.9 7.0 6.5 6.3 : 
            
Agriculture Note 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 
Agricultural production volume index of goods  and services (produc er prices, previous 
year=100)  101.0 90.2 97.5 104.5 107.0 100.3 105.0 98.0 104.5 102.9 
Total utilised agricultural area (thousand hectare)  1 236 1 244 1 316 1 303 1 265 1 229 1 225 1 077 1 064 1 014 
Livestock: cattle (thousand heads, end of period)  265 265 259 260 255 248 255 254 254 253 
Livestock: pigs (thousand heads, end of period)  204 189 196 179 158 158 167 255 247 194 
Livestock: sheep and goats (thousand heads, end of period)  1 251 1 286 1 234 1 239 1 432 1 244 1 249 944 950 849 
Production and utilisation of milk on the farm (total  whole milk, thousand tonnes)  220 201 198 192 213 197 235 374 368 343 
Crop production: cereals (including  rice) (thousand tonnes, harvested production)  565 476 556 466 677 645 595 469 615 609 
Crop production: sugar beet (thousand tonnes, har vested production)  56 38 44 40 47 58 : : : : 
Crop production: vegetables (t housand tonnes, harvested production)  680 696 : : : : 588 565 590 650