EN    EN EN 
EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 14.10.2009 
SEC(2009) 1335 
COMMISSION STAFF WORKING DOCUMENT 
 
THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA  
2009 PROGRESS REPORT  
 
  
accompanying the 
 
COMMUNICATION FROM THE COMMISSION 
TO THE EUROPEAN PARLIA MENT AND THE COUNCIL 
 
Enlargement Strategy and Main Challenges 2009-2010 
{COM(2009) 533 final} 
EN 2   EN TABLE OF CONTENTS 
1. Introduction................................................................................................................ .. 4 
1.1. Preface................................................................................................................... ....... 4 
1.2. Context ................................................................................................................... ...... 5 
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............................................................ 22 3. Economic criteria ....................................................................................................... 24 3.1. The existence of a functioning market economy ....................................................... 24 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 ......................... 33 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.............................................................................................. 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 ..................................................................................... 47 4.15. Chapter 15: Energy .................................................................................................... 48 4.16. Chapter 16: Taxation.................................................................................................. 50 4.17. Chapter 17: Economic and Monetary Union ............................................................. 51 
EN 3   EN 4.18. Chapter 18: Statistics.................................................................................................. 5 1 
4.19. Chapter 19: Social Policy and Employment .............................................................. 52 4.20. Chapter 20: Enterprise and Industrial Policy ............................................................. 54 4.21. Chapter 21: Trans European Networks...................................................................... 56 4.22. Chapter 22: Regional Policy and Coordi nation of Structural Instruments ................ 56 
4.23. Chapter 23: Judiciary an d fundamental rights ........................................................... 57 
4.24. Chapter 24: Justice, Freedom and Security................................................................ 63 4.25. Chapter 25: Science and Research ............................................................................. 67 4.26. Chapter 26: Education and Culture............................................................................ 68 4.27. Chapter 27: Environment ........................................................................................... 68 4.28. Chapter 28: Consumer and Health Protection............................................................ 70 4.29. Chapter 29: Customs Union....................................................................................... 72 4.30. Chapter 30: External Relations .................................................................................. 73 4.31. Chapter 31: Foreign, Secur ity and Defence Policy.................................................... 73 
4.32. Chapter 32: Financial Control.................................................................................... 75 4.33. Chapter 33: Financial an d Budgetary Provisions....................................................... 75 
STATISTICAL ANNEX.......................................................................................................... 77 
EN 4   EN COMMISSION STAFF WORKING DOCUMENT 
The former Yugoslav Republic of Macedonia 2009 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 Western Balkans region. 
This report on progress made by the former Yugo slav Republic of Macedonia in preparing for 
EU membership largely follows the same st ructure as in previous years. The report: 
– briefly describes the relati ons 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 Re public of Macedonia's capacity to assume the obligations 
of membership, that is, the acquis  expressed in the Treaties, th e secondary legislation, and 
the policies of the Union. 
The period covered by this report is fr om early October 2008 to  mid-September 2009. 
Progress is measured on the basis of decision s taken, legislation adopted and measures 
implemented. As a rule, legislation or meas ures which are under preparation or awaiting 
parliamentary approval have not been taken into account. This approach ensures equal 
treatment across all reports and pe rmits an objective assessment. 
The report is based on information gathered  and analysed by the Commission. 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 fo rmer Yugoslav Republic of 
Macedonia in its separate communication on enlargement2, based on the technical analysis 
contained in this report. 
                                                 
1 The rapporteur for the former Yugoslav Republic of Macedonia was Mr Erik Meijer. Since September 
2009, the new rapporteur is Mr Zoran Thaler. 
2 Enlargement Strategy and Main Challenges 2009-2010 (COM(2009) 533 of 14.10.2009). 
EN 5   EN 1.2. Context 
The European Council of Dece mber 2005 granted the status of  candidate country to the 
former Yugoslav Republic of Macedonia. Th e Stabilisation and A ssociation Agreement 
(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 prioriti es for reform, in February 2008. 
1.3. Relations between the EU and the form er Yugoslav Republic of Macedonia  
The former Yugoslav Republic of M acedonia is participating in the Stabilisation and 
Association Process . 
As concerns the Stabilisation and Association Agreement  (SAA) with the EU, the country 
is currently implementing all the commitments unde rtaken with th e agreement, which is a key 
priority of the Accession Partnership. In part icular, the country 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 October made a proposal on th e 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 an d Association Committee met in June and the 
Stabilisation and Association C ouncil in July. Seven sectoral s ub-committees have been held 
since November 2008. 
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 set up under the SAA. Based on the Accession Partnership, the 2008 Progress Report and comments made by th e Commission, the government adopted a 
revised national programme for the adoption of the acquis  in May. 
The Accession Partnership identifies eight key pr iorities for progress in the accession process 
by the former Yugoslav Republic of Mace donia. The Commission assesses these key 
priorities as benchmarks in this Progress Re port. A recommendation on the start of accession 
negotiations will depend on the results achieved. 
The visa facilitation  and readmission agreements between  the former Yugoslav Republic of 
Macedonia and the European Community continue d to be implemented. In the framework of 
the visa liberalisation  dialogue process, the country made important progress in the areas of 
justice, freedom and security and fulfilled th e roadmap benchmarks. On the basis of this 
progress, the Commission in July 2009 proposed lifting the visa obligation for citizens of the former Yugoslav Republic of Macedonia.  
As regards financial assistance , the new Instrument for Pre- Accession Assistance (IPA) 
started on 1 January 2007. The 2009-2011 Multi-A nnual Indicative Planning Document 
(MIPD) for the country was adopted in J une 2009. In 2009, the national programme amounted 
to € 81 million. In addition the country continues to benefit from regional and horizontal 
programmes. Cross border cooperation is used  to promote dialogue between local and 
regional authorities of  neighbouring countries. 
EN 6   EN The EU financial assistance portfolio managed by the Co mmission Delegation in Skopje 
amounts to € 91. By July 2009, more than 25% of this total had been contracted and more 
than 21% disbursed. Assistan ce focuses on support to the implementation of the Ohrid 
Framework Agreement, strengthening of administ rative capacity with particular emphasis on 
the rule of law sector, economic development, a nd the ability to assume the obligations of EU 
membership. The EU aims to transfer the management of IPA Funds to the national 
authorities under the Decentr alised Implementation System (DIS) once the national 
authorities have developed the necessary capacity to  assume this responsibility. Further 
attention is needed to de veloping accountable administra tions and institutions with 
appropriate capacity. 
Extensive EU financial support has been provided to civil society  through different national 
and regional horizontal IPA prog rammes under the Civil Society Facility, including aid to 
establish the national civil society forum, capacity building to civil society organisations, and the establishment of regional NGO support centres  to the amount of € 8 million. The national 
programmes provide significant support to impr ove the development and sustainability of 
civil society organisations and further capac ity building of the government unit for NGO 
cooperation. The Cross Border Cooperation pr ogrammes with Bulgaria and Greece also 
promote social, economic and cultural pr ojects by civil society organisations. 
In response to the economic crisis, an IPA crisis package  has been created, comprising €200 
million for the Western Balkan region which are e xpected to leverage investments of at least 
€1 billion, co-financed by the partner financial in stitutions. The country will benefit from a 
share of multi-beneficiary f unds for competitiveness, SMEs, energy efficiency and banking 
sector regulation. As a candida te country, the former Yugos lav Republic of Macedonia has 
been allocated more than €40 million since 2007 from funding under IPA Component III, 
mainly for reinforcing the competitiveness of the economy - thus helping to cope with the 
crisis - through major infrastructure projects in the fields of transport, environment, as well as 
support to SMEs. 
The former Yugoslav Republic of Macedonia has so far signed memoranda of understanding 
for participation in the following Community Programmes : 'Entrepreneurship and 
Innovation specific Programme' (EIP) of the 'Competitiveness and Innovation Framework Programme', 'Progress', 'Culture', 'Europe fo r Citizens', 'Fiscalis 2013' and 'Customs 2013'. 
2. P
OLITICAL CRITERIA  
This section examines 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, human rights and re spect for and protection of minorities. It also 
monitors regional cooperation, good neighbourly relations with enlargement countries and 
Member States, and respect for internationa l obligations, such as  cooperation with the 
International Criminal Tribunal fo r the former Yugoslavia (ICTY). 
2.1. Democracy and the rule of law 
Constitution The Constitution was amended in January to lowe r the threshold for the voter turn-out in the 
second round of presidential elections from 50% to 40%. 
EN 7   EN Parliament  
The work of the parliament proceeded on the basis of dialogue between the governing 
coalition and the opposition, a key priority of  the Accession Partnership. The strengthened 
spirit of consensus resulted in the adoption w ith broad consensus of se veral laws related to 
EU integration. Weekly meetings between the pa rties' parliamentary c oordinators have been 
held, with the presence of th e Deputy Prime Minister for EU  integration for EU related 
matters.  
For the first time the parliament and its bodies examined thoroughly the European 
Commission's Progress Report. The National Council for EU Integration (NCEI) and the 
Committee on EU Affairs continued to prom ote public hearings thus increasing the 
participation of civil societ y. These discussions accompanie d the adoption by the government 
of an Action Plan to address the findings of  the 2008 Progress Report. The NCEI, which is 
chaired by the opposition, continued to meet on a monthly basis, with a high level of 
participation of its members. The NCEI has se cured additional staff which will enhance its 
functioning. 
A new Committee on Local Self-Government was established. The e-parliament was 
introduced which introduces a fully automatised  legislative process from the moment of 
submission of the documents by the Government , and until their publis hing in the Official 
gazette. 
The parliament was in recess from 26 February until 10 April because of the presidential and 
local elections. Following the elections it resu med work promptly. Three new Members of 
Parliament were sworn into office to re place those who were elected as mayors. 
The new rules of procedure of the parliament ha ve increased efficiency and effectiveness in 
handling parliamentary business. Nonetheless,  the Venice Commission has pointed to the 
need to further improve the rules, in partic ular as regards the rights of the opposition. The 
transparency of the legislative process was further improved with the introduction of public 
hearings in parliament. 
Parliament reviewed the annual reports of th e institutions required to report to it. The 
emergency procedure was applied only for a nu mber of laws intended to address the 
consequences of the global economic crisis. Se veral measures from the action plan for the 
parliament were implemented in advance of its adoption, such as establishment of the 
Budgetary Council and the Council for the Parlia mentary TV Channel. Most of the vacancies 
in the new administrative service of the parlia ment have been filled. The budgetary resources 
of the parliament we re increased by 11%. 
A new Law on the Parliament was enacted in A ugust which aims to further strengthen and 
codify the functioning of the parliament. In  particular it creates a legal obligation for 
coordination between the Speaker and the political  parties as well as for relations between the 
Members of Parliament and their constituencies ; strengthens the powers of the Speaker to 
maintain order; establishes a specific budget for the running of parliament; establishes a 
Parliamentary Institute to provide  analysis and research to MPs;  provides for public hearings 
to strengthen oversight over the work of the parliament.  
The Committee on inter-ethnic relations played a limited role in addre ssing issues of concern 
such as the introduction of ethnic shifts in education in some parts of the country. The 
EN 8   EN Committee limited its activity to the application of  double majority ('Badinter majority') rules 
in Parliament for non-majority community related legislation.  
The parliamentary committee for the oversight of  the work of the inte lligence agencies and 
the newly established committee for the ov ersight of implementation of the Law on 
Monitoring of Communications have  held no hearings so far.  
In August, the 'Democratic Party of Albanians'  (DPA), which has 5 Members of Parliament, 
began a boycott of parliament , alleging lack of implementa tion of the Ohrid Framework 
Agreement. 
The investigations of irregul arities in the 2006 parliament ary elections were completed 
without any cases being brought to  court, raising concerns about  impunity of the perpetrators. 
However, progress was made in prosecuting the pe rpetrators of the irre gularities in the 2008 
parliamentary elections. Following the instruction from the President of the Supreme Court to 
give priority to these cases, a total of 29 perpet rators have been sentenced to prison terms by 
the courts. The cases involving 96 perpetrators  are still pending. Seve n police officers were 
dismissed after being sentenced to imprisonmen t. Five cases are being considered by the 
appeal courts.  
The presidential and local elec tions were held in two round s on 22 March and 5 April. The 
OSCE/ODIHR and Council of Europe observati on missions concluded that the elections 
‘…met most OSCE commitments and other interna tional standards for demo cratic elections.’  
Most of the 28 OSCE/ODIHR recommendations i ssued after the parliamentary elections in 
2008 were implemented. A restrained but visibl e police presence contributed to a peaceful 
atmosphere on the election days . The political climate was calm and the conduct of voting 
showed a marked improvement over the 2008 pa rliamentary elections. The elections were 
administered by a three tiered administra tion comprising the St ate Election Commission 
(SEC) the Municipal Elections Commissions (MECs)  and the Election Boar ds at local level. 
Overall, these bodies responded well to the chal lenge of organizing these complex elections. 
The composition of electoral boards reverted to a mixed profession al-political model, 
including one member nominated by the partie s in government and one  by the parties in 
opposition. The State Electoral Commission (SEC) organised training for all involved in 
administering elections. The Ad ministrative Court upheld all ex cept one of the SEC decisions 
when deciding upon complaints against them. Civi l society organisations  fielded a significant 
number of domestic non-party observers. 
However, the number of credible reports of  pressure on or intimidation of citizens, 
particularly public servants, th roughout the election period detr acted from the overall quality 
of the election process. 
The SEC did not handle complaints regardin g the first round of voting within the legal 
deadlines and delayed issuing the final resu lts of the first round, which complicated 
preparations for the second round. It was in consistent in some decisions concerning 
complaints about election material. The Admi nistrative Court sessi ons on election-related 
lawsuits were not open to the public, except du ring the reading of their content, despite a 
requirement in the Electoral Code that d ecisions be taken in public sessions.  
The media, as a whole, generally complied with  the guidelines and regulations issued by the 
Broadcasting Council and allowed voters to make an informed choice. Nonetheless, some media did not provide equal ac cess to all political parties and extensive coverage of 
EN 9   EN government projects during the campaign period amplified the advantage of the incumbent 
parties.  
Certain OSCE/ODIHR recommenda tions were not fulfilled. In particular, the inaccuracy of 
the voter lists, particularly as regards the incl usion of large numbers of citizens living abroad, 
created scope for possible irregularities. Par liament nominated the three remaining members 
of the Broadcasting Council only afte r the elections had taken place. 
Seven candidates took part in the first round of the presidential elections, which saw a voter 
turn-out of 57%. For the first time, one of th e ethnic Albanian candidates received significant 
support from voters across the ethnic spectrum. In the second round face-off between the two 
leading candidates, backed respectively by the 'Internal Macedonian Revolutionary Organisation-Democratic Party for Macedoni an National Unity' (V MRO-DPMNE) and the 
'Social Democratic Union' (SDSM), the requir ed 40% turn-out of voters was achieved by a 
margin of 3 percentage points. The participa tion of ethnic Albanian voters to the second round 
was very low. 
Elections in the 85 muni cipalities in which the country is divided (plus the city of Skopje) 
resulted in 57 mayoral posts for VMRO-D PMNE, up from 21 in 2005. SDSM, in opposition, 
lost 29 municipalities and now governs seven.  The two main ethnic Albanian-dominated 
municipalities (Tetovo and Gostivar) were won by DPA and an independent candidate, 
respectively, while all the othe rs were won by the 'Democratic Union for Integration' (DUI). 
None of the 13 women who ran for mayor were  elected. Five of the 33 candidates from 
smaller communities were elected. 
Overall , as regards political dialogu e, which is a key priority of the Accession Partnership, 
there has been good progress. The political climate has improved and the work of the 
parliament has become more effective, includ ing the legislative process. New parliamentary 
procedures are being implemented and the Law on Parliament was adopted. The National 
Council for European Integration, chaired by the opposition, meets regularly. Continued 
efforts to deepen political dialogue, including on  inter–ethnic issues, would consolidate the 
engagement of all parties. Good progress was made in the conduct of elections, which met 
most international standards. Allegations of intimidation need to be addressed.  
Government  
During its first year, the  government coalition between VMRO-DPMNE and DUI has been 
stable and, overall, has functione d effectively. It has maintained EU related reforms, including 
as regards visa liberalisation, as a high priority . A reshuffle took place in July, with changes 
to five ministerial posts, including the Deput y Prime Minister responsible for European 
integration. However, relations within the government coalition were not strong and 
sometimes suffered from weak in ter-ministerial coordination.  
Cohabitation within the executive remained stra ined, with divergent pub lic stances on how to 
solve the name issue, until a new President backed by VMRO-DPMNE was sworn in for a five-year term on 12 May.  
The government adopted its annual revision of the national plan for adoption of the acquis 
(NPAA), in response to the findings of th e 2008 Progress Report. The Secretariat for 
European Affairs ensured the participation of re levant Ministries in the exercise, notably by 
allowing direct on-line updating. 
EN 10   EN Decentralisation, which is  a basic principle of the Ohrid Framework Agreement, continued. 
The Law on Inter-Municipality Cooperation, whic h is intended to help municipalities exercise 
their powers more effectively, was enacted in June . Another six of the 85 municipalities 
entered phase 2 of the fiscal decentralisation process, which provides for a more substantial 
transfer of competencies to the local level, leaving 17 in phase 1. Municipal tax collection improved. Municipalities received a higher share of the revenue collected from management 
of State-owned land. Efforts were made to st rengthen the capacity of municipalities in the 
areas of property tax administration, public fi nancial management, debt management and 
financial control. Intern al audit units were established in ten more municipalities, bringing the 
total up to 38. In 36 municipalities service centres and their branch offices were established. Staff was trained and working procedures were put in place. Municipalities performed better 
in the field of education. 
However, revenue remains insufficient to allow municipalities to perform their tasks properly. 
Management of State-owned land is still cent ralised. The municipalities which remain in 
phase 1 have sizeable debts. The accounts of 22 municipalities, 12 of which are in phase 2, 
have been blocked by legal proceedings relating to  arrears. There is no consistent set of data 
on arrears accumulated by municipalities. Th e Association of M unicipalities (ZELS) 
continues to hold important res ponsibilities for taking forward the decentralisa tion process. 
The administrative capacity of so me municipalities, particularly the smaller ones, remains low 
in the areas of financial management, tax ad ministration and financial control. In some 
municipalities property tax coll ection is not adequa tely monitored or enforced and the 
databases of taxpayers are not updated. The transparency and accountability of local 
government administrations remain inadequate. In  several instances, trai ned staff of municipal 
service centres was replaced followi ng the election of a new mayor.  
Exchanges of data between the cadastre, the ci vil registry, the Public Revenue Office and the 
municipalities need to be strengthened. The Ministry of Local Self-Government is not 
facilitating the decentralisation process suffi ciently. The local government budget unit in the 
Ministry of Finance lacks capac ity to support fiscal decentra lisation. The inter-ministerial 
working group on implementation of decentralisa tion did not meet for a year prior to August 
2009. 
Overall , the government coalition has been stable and functioned effectively in its first year. It 
maintained EU related reforms, including as regards visa liberalisation, as a high priority. Decentralisation, which is a ba sic principle of the Ohrid Framework Agreement, continued 
with a further transfer of co mpetencies to municipalities. However, increased efforts are 
needed, in particular as regards the financial framework for municipalities. 
Public administration  
Further progress was made in the reform of the civil service, which is a key priority of the 
Accession Partnership. 
A High Committee on public administration re form, chaired by the Prime Minister, was 
established in July with the aim of leading the reform process.  
Subsequently, the amendments to the Law on the Civil Service adopted in September 
significantly improved the legal framework by stre ngthening the role of the Civil Servants 
Agency (CSA) and strengthening merit based r ecruitment in the civil service. The Civil 
Servants Agency has been empowered to draf t by-laws, oversee the internal organisation of 
EN 11   EN the administrative bodies, approve the recruitmen t of civil servants and inspect the progress 
towards equitable representation. The scope of the law on the civil service has been extended 
to include the Public Revenue Office, the State Audit Office and the Customs Office. 
The new recruitment criteria require that state se cretaries must have a minimum of three years 
experience of senior management in public ad ministration. Procedures for recruitment of 
other civil servants have been streamlined a nd made more transparen t: clear dead lines have 
been introduced, all decisions will be publishe d on the CSA website and a re-publication of a 
vacancy may only take place after six months. Fu rthermore, elements of a vertical promotion 
system have been introduced, whereby positions may be filled by means of internal announcements open to career officials. 
The CSA continued to oversee disciplinary proceed ings, which remain at a high level. As a 
result of 121 disciplinary pr oceedings, 42 civil serv ants were fined, 5 were reassigned to 
lower positions and another 5 were dismissed. 
New methods were introduced for strategic planning and preparation of annual work 
programmes to ensure alignment with th e budget and with government EU planning 
documents, notably the national programme for adoption of the acquis . Also, strategic 
planning sectors or units have been  established in every ministry.  
The provisions regarding career-related supplem ents are not being consistently applied. 
A civil servants' training system has been established. The Training Council and the Training 
Department of the CSA are overseeing implementa tion of a three-year training strategy which 
is financed by a specific budget allocation. A larger number of annual training programmes 
were submitted to the Civil Servants Agency on time by the State administrative bodies, thus 
helping improve consistency and effectiveness.  
The capacity of the recently established human re sources units within the ministries began to 
be strengthened by providing in itial training and establishing  a working group to create and 
coordinate a network. New staff have  been appointed to these units. 
The EU sectors in some line ministries were strengthened with a total of 20 additional staff. 
The 2009 version of the NPAA envisages a tota l of 1,168 new civil service posts, for which 
appropriate budgetary provision wa s made. Staff in municipalitie s is gradually being trained 
to implement parts of the acquis  assigned to local level and to manage EU funds.  
The regulatory impact assessment (RIA) procedur e came into force in January, requiring all 
legislative proposals to be accompanied by an RIA.  
The citizens’ charter project is being regularly  implemented in all 15 ministries and 9 State 
administrative bodies. Its effectiveness is analysed regularly. 
Some progress was made on implementing the Law on Access to Information. A training 
programme was given to the information holde rs and a website was created for the public. 
The number of complaints received by the Na tional Commission for Protecting Access to 
Information rose from 350 in 2007 to 670 in 2008, of which 426 resulted in the information 
being made available.  
Cooperation between public bodi es and the Ombudsman remains good. State bodies continue 
to carry out the large majority of the Ombudsman’s recommendations. 
EN 12   EN Further steps were taken to implement the out standing elements of the police reform, a key 
priority of the Accession Partnership. They included making the national coordination centre 
for integrated border management fully operationa l and further decentralising the police, with 
the appointment of mid-ranking officers in the regional headquarters and police stations. Out 
of the 38 police station commanders, four were  replaced at the request of the municipal 
councils by a procedure that formally comp lied with the Law on Police. Until July, the 
absence of a well-developed human resources ma nagement system meant that the procedure 
did not fully adhere to best in ternational standards. Thereafter, the Ministry of Interior 
adopted a rulebook regulating the dismissal of commanders of police which establishes an 
administrative procedure to be followed. Manage ment of the available resources, training and 
budgetary planning improved. Efforts to tackle corruption continued.  
The new Law on Internal Affairs, which regulates  the management of the police service, was 
enacted in July.  It provides for significant progress in the human resources management 
system by introducing a career and appraisal system. It also intr oduces a legal provision that 
prevents police officers from holding office in polit ical parties. Furthermore, it also clarifies 
the distribution of responsibil ities between the Administrati on for Security and Counter-
intelligence of the Ministry of the Interior and the Bureau for Public Security in the fight 
against organised crime. The law also enhances  the accountability of the intelligence agencies 
to parliament. 
(See also Chapter 24 – Justice, Freedom and Security .) 
However, additional efforts are needed to ensure full implementation of the Law on the Civil 
Service. In particular, the capacity of ministries  and municipalities to pe rform staff appraisals 
needs to be strengthened.  Full reporting to the Civil Servants Agency in line with the legal 
obligations is a prerequisite for the transparen cy and accountability of decisions of individual 
administrative bodies on the appointments and promotions of civil servants.  
The Civil Servants Agency reported that si nce September 2008 there have been 77 unlawful 
promotions, out of which 38 were in the Mini stry of Economy. Only one decision has been 
annulled so far, raising concerns about re spect of the Law on the Civil Service.  
The increased recruitment of temporary staff, which does not fall under the Law on the Civil 
Service, undermines merit-base d recruitment. Many of the temporary staff are junior, lack 
appropriate office space and have no clear job descriptions. This practice takes place across 
State administrative bodies (SAB s) and municipalities, and is discouraging for regular civil 
servants.  
Despite the obligation in the Code  of Ethics, no civil servant re ported an illegal act by another 
civil servant during the reporting period. 
Planning of the human resource needs across the en tire civil service needs to be significantly 
strengthened, in particul ar in order to reduce use of temporary staff and ensure a coherent 
approach to equitable representa tion. Availability of appropriate  training facilities needs to be 
ensured at central and local le vel so that the training strate gy may be delivered. Also, a 
framework for effective social dialogue betw een the government and the organisations 
representing civil servants remains to be established.  
Further efforts are needed to im prove accountability in the public  administration, in particular 
in the decision-making process. The capacity to  implement the Regulatory Impact Assessment 
procedures needs to be developed. 
EN 13   EN Overall , some progress was made on implementing public administration reform, including 
reform of the civil service, which is a ke y priority of the Accession Partnership. The 
amendments to the Law on the Civil Service strengthened the provisions aiming to ensure 
merit based recruitment and promotion of civ il servants. A functioning training system has 
been established and some additional staff has been allocated in key areas. However, further 
efforts to ensure transparenc y, professionalism and independen ce of public administration are 
required. Respect for the provisions and the spirit of the law needs to be ensured in practice. 
Further progress has been made as regards reform of the police, which is a key priority of the 
Accession Partnership. All the new local and regional commanders are operational, 
management has improved and the law on internal affairs has introduced a career system into 
the police service. The reform of  the police is well advanced. 
Judicial system  
Progress was made on implementing reform of th e judiciary, a key priority of the Accession 
Partnership.  
Further progress was made towards ensuring the independence of judiciary. Since October 
2008 the Judicial Council appointed  a total of 38 new judges as well as 4 new presidents of 
courts. The first cycle of appraisal of the judge s was completed in June. The Council of Public 
Prosecutors assumed full res ponsibility for appointing new public prosecutors (21) and 
completed extending the expired term of offi ce to over 159 prosecutors elected in 2003 for 6 
years period. 
These appointments were made in line wi th the new procedures  which provide for 
independent appointments by the two Councils. The most recent appointments by the two Councils include also the first successful graduates coming fro m the Academy for training of 
judges and prosecutors.  
Also the Judicial Council completed the first performance appraisal of  the serving judges and 
presidents of courts and found that most of them have performed according to the required 
standards.  
Efforts were made to improve efficiency. The President of the Judicial Council assumed the 
chairmanship of the Court Budget Council and pr omoted better use of the court budget. The 
budget was increased by 8% compared with 2008, which represents a sign ificant rise, despite 
the difficult economic context. The IT centre connec ting all judicial instit utions is operational 
and the automated case management system  has been installed in all courts. 
The administrative court and the co urt of appeal in Gostivar were  established in 2008. Since 
then they have settled approximately 3200 and 2070 cases respectively. The new Higher 
Prosecutor’s Office in Gostivar was established, after some delay, and five prosecutors were 
appointed to it. Amendments to the laws on litigation procedure and on enforcement of civil 
judgments, designed to improve execution of  court rulings, were  enacted in June. 
However, the absence of a human resource management system has slowed down the 
recruitment of graduates from the academy fo r training judges and prosecutors into the 
judiciary. The judiciary continues to face budg etary constraints. The Skopje 2 basic court, 
which is the court with the largest number of cases, and the four courts  of appeal along with 
the administrative court were unable to reduce their backlogs. The administrative court, the 
court of appeal in Gostivar and most of the P ublic Prosecutor’s offices remained understaffed, 
which affected their performance. Not all th e enforcement cases were transferred to the 
EN 14   EN bailiffs by the end of 2008 thus delaying enforcement of a number of court rulings. 
Implementation of the 2006 Law on Mediation has had a limited impact so far. Full 
implementation of the 2007 Law on Public Prosecu tor’s Offices requires parallel changes to 
the Law on Criminal Procedure.  
In April, VMRO-DPMNE, the governing pa rty, questioned the legitimacy of the 
Constitutional Court which had ruled against the in troduction of religious education into state 
schools. The Constitutional Court responded  with a press release denouncing the 
'unprecedented pressure' and 'attempts to harm it s reputation' it was being subjected to. This 
incident raised concerns about the independe nce of the judiciary, although the government 
provided assurance that it would respect the rulings. 
Some documented irregularities re garding recent judicial proceedings have raised questions 
about the independence and impartia lity of parts of the judiciary.  
Overall , further progress was made on reform of the judiciary, which is a key priority of the 
Accession Partnership. The first graduates from the Academy of  Judges and Prosecutors have 
been appointed, the new courts and judicial bodies are being st affed and are taking up their 
activities and the budget has been increased very significantly. Continued efforts are needed 
to ensure the independence and impartiality of the judiciary, in particular through the 
implementation of the provisions regard ing appointments and promotions.  
(See also Chapter 23 - Judici ary and fundamental rights) 
Anti-corruption policy  
Good progress has been made in strengthe ning and implementing the anti-corruption 
framework, which is a key priority of the Accession Partnership. Amendments to the Electoral Code introduced more specific provisions on transparency of election campaign financing. 
Most of the recommendations of the Group of States against Corruption (GRECO) are being 
followed up. The Government Council for monitori ng implementation of the anti-corruption 
action plan met frequently, underlining the political  priority attached to  the issue. Progress 
was made towards establishing a national intelligence database.  
The amendments to the Law on Financing of Po litical Parties were adopted in July. They  
enhance the transparency of donations, strengthe n the provisions against illegal donations, 
tighten reporting obligations of  the political parties and introduce more dissuasive sanctions. 
The supervisory authorities, the Public Revenu e Office and the State Audit Office, have an 
important role to play in ensuring full implementation. 
Amendments to the Criminal Code including new provisions on extended confiscation of 
proceeds of crime, illicit enrichment and crim inal liability of legal persons for trading 
influence were enacted.  
The databases of the State Commission for Prev ention of Corruption (SCPC) and the Public 
Revenue Office were interconnected. This allows  information to be exchanged swiftly and 
more accurate records of asset declarations to be compiled. In 2008, 47 procedures for checking officials’ assets were initiated. 
The SCPC began to implement the action plan  on conflict of interest. Several cases on 
conflict of interest were initiated in the reporting  period. In 11 of them a conflict of interest 
EN 15   EN was found. Amendments to the law on conflict of  interest were adopted in September which 
extend its scope of application and strengthen the control mechanism.  
The SCPC adopted a strategic plan on public relati ons in order to raise public awareness of its 
role. 
Prison sentences were imposed in first instance  court decisions in so me high-profile cases, 
including a former Prime Minist er, a former Deputy Prime Minist er and the former mayor of 
a Skopje municipality. Appeal proce dures are under way in these cases. 
However, the fragmented legal system conti nued to generate difficulties when it came to 
implementation.  
The legislation on financing of political parties and election cam paigns has so far not had a 
substantial impact. In particular, th e mechanism for following up reports and 
recommendations from the SCPC and the Stat e Audit Office is not fully effective. A 
consistent track record on checking asset decl arations, following up irre gularities on election 
finance thresholds and reporting donations has yet to be developed. Interception of 
communications is used in a rather low number  of corruption cases, notably corruption cases 
not connected to organised crime. The capacity of  the specialised anti-corruption units within 
the prosecution service and the Ministry of th e Interior should be further strengthened. 
Sentences were suspended in a high number of court decisions on abuse of office.  
The SCPC should make efforts to be more pro- active in pursuing anti-corruption policy. It is 
limited by the part-time role of its members. P ublic trust in the independence and impartiality 
of the SCPC remains low.  
Overall , good progress was made on implementing an ti-corruption policy. The electoral code, 
the law on financing of political parties and th e law on conflict of inte rest were amended to 
strengthen transparency and ne w provisions on illicit  enrichment were adopted. There were 
further indictments and convictions in high  level cases and coop eration between law 
enforcement agencies improved. Nevertheless, co rruption remains prevalent and continues to 
be a serious problem in many areas. Continued e fforts are needed, in particular as regards 
implementation of the legal framework.  
(See also Chapter 23 – Judi ciary and fundamental rights)  
2.2. Human rights and the protection of minorities 
Observance of international human rights law There was progress on ratification of human  rights instruments . The  Optional Protocol to 
the Convention against Torture was ratified. So too was the Council of Europe Convention on 
Action against Trafficking in Human Beings. Th e European Charter for Regional or Minority 
Languages was signed, but has ye t to be ratified. Revised Prot ocol No 2 to the European 
Social Charter was not ratified.  
The European Court of Human Rights (ECtHR) found that the former Yugoslav Republic 
of Macedonia had violated the European Conve ntion on Human Rights in 13 cases. A total of 
501 new applications were made to the EC tHR since October 2008. As of September 2009, 
there were 1093 cases pending be fore the ECtHR rega rding the former Yugoslav Republic of 
Macedonia, mostly related to tria l in a reasonable period of time.  Two new laws were enacted 
EN 16   EN – one on representing the country before the ECtHR, the other on enforcement of ECtHR 
judgments. 
The legal and institutional framework for the protection of human ri ghts and minorities is 
broadly in place. The Office of the Ombudsman c ontinues to make a valuable contribution. 
However, limited further progress was made on promotion and enforcement of human 
rights. The officials in the law enforcement agen cies are receiving continuous training on 
human rights. The parliamentary permanent oversight committee on hu man rights tackled a 
wide range of issues with relevant stakeholde rs, but its work has not yet been followed up by 
the government. The inter-ministerial body for protection of human rights made limited 
progress on promoting the human rights age nda. The country remains without a focal 
institution for protecti on of human rights.  
Civil and political rights 
With regard to prevention of torture and ill-treatme nt and the fight against impunity, in 
2008  the Sector for Internal Control and Professional Standards in the Ministry of the Interior 
dealt with 34 cases of ill-treatment, far fewe r than in 2007, when there were 52. There was  no 
case of illegal arrest. Criminal charges were brought against 75 police officers. The number of written complaints received fr om the public rose to 594, from 496 in the previous year. The 
number of anonymous complaints to the Sect or for Internal Control and Professional 
Standards dropped from 104 in 2007 to 67 in 2008.  
The Ministry of the Interior’s decision to disb and temporarily all special "Alpha" police units, 
save the one in Skopje, brought a drastic decrease in complaints of ill-treatment, as confirmed 
in the Ombudsman’s report. Control over the police in general, and special units in particular, 
was more effective, partly because of increa sed use of internal audits to ensure that 
professional standards were resp ected. Investigations were carried out in accordance with 
international standards, which ha ve already been largely transpos ed in the national legislation 
and practices. An independent external mech anism to monitor cases of police misconduct is 
still missing, although oversig ht of police work has been  further improved, notably by 
strengthening the powers of the Public Prosecutor in the investigative phase. The decisions of 
the European Court of Human Rights  were not implemented. 
Access to justice remained  limited, as the Law on Legal Aid was not enacted. The duration of 
court cases was shortened: the basic courts resolved 39% of cases within three months and 
another 45% within a year. The second instan ce government commissions which decide on 
complaints about decisions by ad ministrative bodies were, as in previous years, the least 
responsive to the Ombudsman’s instructions.  
Some progress was made with the prison system . Some steps were taken on long-term 
planning. The government adopted an action plan for construction, refurbishment and 
maintenance of prisons for 2009. The refurbishment works for the section for chronically ill and disabled detainees within Idrizovo prison were finalised and a new remand wing in the 
Skopje prison was completed. The Ombudsman’s mail-box system installed in prisons proved 
effective. Somewhat more account was taken of  merit-based criteria in the appointment of 
prison directors. 
However, additional efforts are needed to address the dire state of some prisons, notably 
Idrizovo, where inhuman and degrading condi tions persist. Overcrowding remains a major 
problem. The healthcare system in prisons is inadequate. In 2008 there were eleven deaths 
EN 17   EN including four suicides in pr isons, compared with eight an d two respectively in 2007. The 
Council of Europe’s Committee for Prevention of  Torture has repeatedly raised concerns 
about ill-treatment of inmates and th e deleterious conditions in prisons. 
No effective mechanisms are in place to prev ent and combat corrupti on among prison staff. 
Political interference in appointments to some prison management positions persists, which disrupts the continuity and sustainability of strategic planning. Prison staff is not 
systematically trained. The tr eatment of vulnerable prisone rs is not satisfactory. The 
procedures for dealing with allegations of ill- treatment of prisoners are still not effective. 
Little progress was made in improving the liv ing conditions in the Tetovo Correctional and 
Educational Centre (located since 2001 in Skopje prison). The juveniles continue to mix with 
adult prisoners. Access for juveniles to vocational training is poor. The conditions of detention cells in many police st ations remain sub-standard.
  
The European Parliament’s recommendation to follow up the Khaled El-Masri case of alleged 
extra-judicial detention has still not been responded to. 
With regard to  freedom of expression , overall the situation is sa tisfactory. However, the 
public broadcaster still lacks fina ncial independence, as the rate  of collection of the viewing 
licence fees is close to zero. The Broadcasting Law still allows the public service broadcaster 
to be declared bankrupt or liquidated at any moment. The ownership of the printed media is 
still highly concentrated and non-tr ansparent. Political interference in  the media is a source of 
concern as it leads to self-censors hip and limits freedom of expression.  
(See also Chapter 10 – Information society and media) . 
With regard to freedom of assembly and association,  the overall situation is satisfactory.  
However, there were two occasions when peaceful and legal public events were violently disrupted. One was a
 student protest in Skopje against the government’s plan to build a 
church on the main square, the other a deba te in Struga organi sed by a civic group.  
Involvement of civil society organisations in policy-making and in legislative drafting 
progressed moderately. The government introdu ced mechanisms for consulting civil society 
organisations. Changes in the government’s ruleb ook stipulate that draft legislation should be 
accessible on the relevant ministry’s webpage for public consultation and that civil society 
can participate in working groups for drafting laws. A ne w government decision improved 
selection procedures and evaluation criteria for public financing of civi l society organisations. 
An evaluation grid, a scoring syst em and an obligation to inform all applicants of the outcome 
were introduced.  
However, progress on implementing the gove rnment’s strategy and action plan for 
cooperation with civil society organisations  slowed. Implementation of the Law on 
Sponsorship and Donations progressed slowl y, because of the complex administrative 
requirements and lack of public awareness. Ci vil society organisations remained heavily 
dependent on foreign funding. The lack of suffic ient financial resources continued to be a 
serious constraint. The government only part ially respected the existing consultation 
mechanisms and, overall, failed to engage in a m eaningful dialogue with civil society. Most of 
the draft legislation and regulat ory impact assessment forms were  not available to the general 
public for review. There is no systematic a nd transparent mechanism for consulting civil 
society on national development policies, le gislation, programmes or other strategic 
documents.  
EN 18   EN As regards freedom of religion , implementation has begun of  the 2008 Law on the Legal 
Status of Churches, Religious Communities and Religious Groups. However, several religious 
communities or groups, including the Bektashi, remained without any regulated status. The 
Constitutional Court annulled the provisions on religious education in the Law on Primary Education, finding them contrary to  the principle of separation of  church and State. According 
to the Court, the Constitution guarantees the right to  practise a religion,  but citizens should 
not be influenced by the state as to whether or how to practise a religion.  
Overall , some steps have been taken to strengthen civil and politic al rights, in particular to 
address allegations of ill-treatm ent by police. However, further significant efforts are needed, 
in particular as regards the prison system a nd transparency and inde pendence of the media. 
The country is moderately advanced in this area. 
Economic and social rights 
As regards women’s rights , efforts were made to deal with the problem of domestic violence. 
A national body was set up to coor dinate implementation of th e national strategy against 
domestic violence (2008/2011). Implementatio n of the strategy has started, but some 
ministries show little interest in it. Progress was made towards coordinating the fight against human trafficking better  at national level. Coordination remains weak at local level.  
The participation of women in political life is  limited. No woman was elected for one of the 
85 vacant positions as mayor in the recent local elections, compared to 3 under the previous elections.  
A strategic approach to equal opportunitie s is missing. Little progress was made on 
implementing the Law on Equal Opportunitie s between Men and Women, although specific 
funds were allocated for the fi rst time in 2009 for the work of the Department of Equal 
Opportunities. 71 coordinators have  been appointed at local level, plus 13  within ministries. 
Most of them lack experience in the field a nd are not familiar with equal opportunities policy. 
Despite the requirement in the law, no mediat or has been appointed yet to deal with 
complaints about unequal treatment. The nati onal action plan for gender equality lacks 
coherence. (See Chapter 19 – Social policy and employment)  
The national action plan for Roma women rece ived no dedicated funds for 2008. As is the 
case with the Equal Opportunities Law, the realis ation of the operational plans largely depend 
on external contributions. The Department fo r Equal Opportunities doe s not have adequate 
capacity to fulfil its responsibility to monitor ministries and its inte r-ministerial role in 
coordinating gender issues. The practice of fa mily voting, along with other discriminatory 
customs, traditions and stereot ypes are still widespread and undermine women’s basic rights. 
Little has been done to address women’s rights in rural areas. Insufficient attention is paid to 
women’s health, discrimination in the workpl ace and sexual harassment. Roma women and 
girls still suffer from both r acial and gender discrimination. 
As regards children’s rights , an action plan has been adop ted on preventing and combating 
sexual abuse of children and paedophilia for the period 2009/2012. Attendance in primary and secondary schools has increased, accompanied by increased investments; 94% of primary 
school pupils go on to attend secondary school. However, disparities persist, affecting 
children from vulnerable groups. Roma children have  the lowest literacy rate and still a very 
low rate of enrolment, attendance and completion of both primary (61%) and secondary 
education (17% according to recent study in 2008). The Council of Europe Convention on the 
EN 19   EN Protection of Children against Sexual Exploita tion and Sexual Abuse has not been ratified. 
Reforms in line with international instrument s such as the UN Convention on Rights of the 
Child are not being implemented. Implemen tation of the 2006/2015 action plan for the 
protection of children’s rights remains slow.  
The number of reported cases of physical an d sexual abuse of children and paedophilia 
increased. The number of some 1000 street ch ildren has not decreased, 95% of them are 
Roma. Children with disabilities are highly disa dvantaged: appropriate social services are 
lacking and these children are not integrated into formal education and regular recreation 
programmes. Poor physical access also seriously constrains th eir integration into society. 
Juvenile delinquency remains very high, partic ularly among Roma. So me progress was made 
on implementing and monitoring the action plan on juvenile justice. However, the funds 
allocated to this action plan are still insuffici ent. The law on juvenile justice which had been 
adopted in July 2007 entered into force in J une 2009. The law establis hes the institutional 
framework for the juvenile justice system, ba sed on modern principles. However, further 
efforts are needed to prevent juvenile delin quency and to increase the capacity of law 
enforcement agencies to deal with juveniles.   
As regards socially vulnerable people and people with disabilities, reforms are under way 
in line with the prior ity goals set in the 2008/ 2018 national strategy to de-institutionalise the 
system of social care. The de -institutionalisation process is slowly being reinforced and 
financial resources are being pr ovided, but remain inadequate. Provision of services via non-
institutional forms of social care, such as day-care centres, small communal houses and 
support for families accepting people with disa bilities, has been initiated. The first 
partnerships in social care pr ovision between the national and local authorities, civil society 
and the private sector were set up. However,  the staffing and facilities for treatment of 
patients in community health in stitutions have not improved . The  allegations of  ill-treatment 
of patients in the Demir Kapija psychiatric hospital reported in 2008  were not followed up. 
Municipalities have insufficient administra tive capacity to fulfil the social policy 
responsibilities that were transferred to them as part of the second pha se of decentralisation. 
In general, social integration of people with  disabilities has not improved; their access to 
education, employment and public services remains limited. Overall, long term social 
inclusion policies for the socially  vulnerable, including people with  disabilities, have not been 
initiated and participation by rele vant stakeholders  is lacking. 
Little progress can be re ported in the field of labour rights and trade unions.  Members of 
the Joint Consultative Committee with the EU Economic and Social Committee have been nominated. The first meeting Joint Consulta tive Committee was held on 25 September.  The 
criteria for membership of the Economic and So cial Committee have not been clarified, and it 
still does not fulfil it s role. Tripartite, bipartite and social dialogue  remained very weak. The 
capacity of the social partners remained low. An all-inclusive social dialogue remains to be 
established.  
Little progress has been made in the area of anti-discrimination policy . Mechanisms to 
identify, pursue and criminalise all forms of  discrimination by State and non-State bodies 
against individuals or groups do not yet exist. A framework law on anti-discrimination 
remains to be adopted. Discrimination based on sex, ethnic origin, disability and sexual 
orientation persists. Minorities, the Roma community and people w ith disabilities, particularly 
children, suffer most from discrimination in various walks of  economic, social and cultural 
life. Neither the Constitution nor the existing legisl ation identifies sexual orientation as a basis 
EN 20   EN of discrimination. Lesbian, gay, bisexual and tr ansgender (LGBT) peopl e are not protected 
against direct or indirect disc rimination and are stigmatised, pa rticularly in rural areas.  
As regards property rights , the process of returning propert y confiscated during the period of 
the Socialist Federal Republic of  Yugoslavia is yet to be completed. A rulebook on internal 
organisation of the cadastre put in place a ne w structure. Administrative capacity was 
strengthened with the aid of some training. However, progress on dealing with restitution 
claims was slow. Property dispute proce dures tended to be delayed beyond the legal 
deadlines, and in some cases both the decision on a claim and the appeal against it were dealt with by the same people. There has again been no pr ogress on returning pr operty of religious 
communities. 
Overall , some steps have been taken to strength en social and economic rights. However, 
further significant efforts are needed, in part icular as regards child ren's rights and anti-
discrimination policies. Domestic violence re mains a cause for concern. The protection of 
women against all forms of violence needs to be strengthened.
 Commitment to relevant social 
inclusion policies and stakeholde r dialogue are still lacking. Th e country partially meets its 
objectives in this area. 
Minority rights, cultural right s and protection of minorities  
In the field of cultural rights,  there has been some progress on implementing the Law on Use 
of Languages spoken by at least 20% of the citizens. As provided for by the law, some 
chairpersons of parliamentary committees be gan using Albanian. Li ttle progress can be 
reported regarding use of the languages of the sm aller ethnic communities. There is a lack of 
facilities for teaching in their mother tongue. 
As regards minorities , inter-ethnic tensions were generally low. They intensified at times, in 
particular in schools. The Ohrid Framework Ag reement remains a crucial guarantee of the 
rights of the non-majority communities3 in the country.  
The capacity of the Secretariat for the Impl ementation of the Ohrid Framework Agreement 
needs to be strengthened so that it may coordinate effectively the implementation of policies 
such as equitable representation and the provisi ons on the law on languages. It also needs to 
provide more regular and comprehensive in formation about progress in implementation. 
As provided for in the Law on Protection and En hancement of the Rights of Ethnic Minorities 
which represent less than 20% of the population, a specialised agency for protecting the rights 
of these minorities was set up as an indepe ndent State administra tive body. The agency is 
intended to act as an advisory body to th e government on minority issues. Already two 
successive directors have been appointed and the agency is still not operational, in the absence 
of adequate staff and budget. 
Committees for inter-ethnic relations have been set up in most municipalities where they are 
required by law and also in 14 other muni cipalities with sizeable minority populations. 
However, elections of members were often no t transparent and the effectiveness of these 
committees is limited by poor oper ational capacity, unclear comp etences and weak status. The 
public are largely unaware of their role and th eir recommendations are often disregarded by 
                                                 
3 Albanian, Bosniak, Roma, Serbian, Turkish and Vlach. 
EN 21   EN the municipal councils. In seve ral municipalities, the composition of the committees does not 
reflect the ethnic structur e of the local population. 
Initial steps were taken to enhance cooperation between the Parliamentary Committee for 
inter-ethnic relations and the committees for inter-ethnic relations in the municipalities. 
Some progress was made on implementing the stra tegy for equitable re presentation of ethnic 
communities in the public sector. The law on civ il servants establishes an obligation on public 
bodies to comply with their annual recruitment targets for non-majority communities. The 
number of civil servants from the non-majori ty ethnic communities increased to 26% at 
central level by September 2009. However, recruitment targets for non-majority communities in the public administrations have not yet been met; no sanctions are provided by the regulatory framework. The ethnic  Turkish and Roma communities  are still particularly under-
represented. A single data collection system for the entire public sect or has not yet been 
established.  
There is no strategic human resour ces planning to ensure gradual fulfilment of the recruitment 
targets for non-majority communities. In order to meet these targets, a number of civil servants from non-majority communities were recruited irrespective of  the SABs’ needs and 
failed to meet the required criteria. Some were not provided offices or equipment.  
The high schools in Struga municipality, wher e ethnic shifts were introduced following 
fighting between pupils from different ethnic communities, partly restored ethnically mixed education at the start of the 2009-10 school year. 
Nonetheless, several other municipalities are ma intaining separate ethnic shifts. This raises 
concerns about long term dama ge to inter ethnic- relations . The recommendations of the 
OSCE High Commissioner for Natio nal Minorities, which aim to support integration of ethnic 
communities through education, should be fully taken into account.  
The authorities have taken practic al measures to address the issu e of social inclusion of Roma, 
but with limited results so far. Between 3,000 to 5,000 Roma, ethnic Albanians and ethnic 
Turks still lack personal docum ents, such as birth certificat es and medical insurance or 
employment cards, which are necessary to benefit from social insurance,  healthcare and other 
social services.  
A broad consensus on implementation of the C onstitutional Court decision to annul some 
provisions of the Law on Use of Flags of the Communities has not emerged. 
In July 2009 there were about 1,700 refugees/asylum-seekers in the country, of whom the 
v a s t  m a j o r i t y  w e r e  R o m a  f r o m  K o s o v o
4: 25 were recognised refugees, 1,093 were under 
humanitarian protection and, by decision of the Mi nistry of the Interior, are being transferred 
to subsidiary protection, 93 were asylum-seek ers and 481 were from minorities from Kosovo 
whose asylum claims had been rejected or whose humanitarian protection status had been 
terminated by a final decision. In 2008 the num ber who had received recognised refugee 
status reached 36. A new Law on Asylum and Temporary Protection brought national 
standards even closer to European ones. Th e government commission he aring appeals against 
first instance decisions on refugee status was abolished and the administrative court became 
the final instance body on refugee status. Yet ther e are shortcomings in its procedures for 
                                                 
4 Under UNSCR 1244/99. 
EN 22   EN decisions on appeals, notably on decisions on terminating te mporary protection status for 
people from Kosovo and on the period for wh ich residence is granted to people under 
subsidiary protection.  
The number of registered internally displaced persons (IDPs) decreased from 778 in 2007 to 
736 in 2008.  
Little progress can be reported regarding the Roma . The four action plans in the framework 
of the 2005-2015 Decade of Roma Inclusion we re recently revised and continued to be 
implemented slowly. State funds were a llocated to implemen t the action plans. 
Implementation of the Roma strategy and of the 2005-2015 Decade of Roma Inclusion has 
been placed under the responsibility of a new unit within the Ministry of Labour and Social Policy and is coordinated by a Roma minister  without portfolio. SABs initiated several 
projects related to the priority  fields of the Roma strategy.  
However, the commitment on the part of line ministries and of m unicipalities is still 
insufficient. The inter-ministerial coordinati on working group on implementation of the Roma 
strategy was not operational for most of the re porting period. Adequate fi nancial resources for 
implementation of the action plans were lacking. The administrative capacity of the office of 
the Roma minister without portfolio and of th e unit for implementation of the Roma strategy 
and the 2005-2015 Decade of Roma Inclusion needs to be significantly strengthened. Representation of Roma in many areas of pub lic life, at both local and national levels, 
remained low. 
Roma continued to be the most disadvantag ed ethnic group. Unempl oyment among Roma 
was still the highest (as high as 73% compared to around 30% among the general population). 
Roma continued to have the lowest incomes (about 63% live below the poverty line) and the highest mortality rate. An estim ated two thirds of Roma hous eholds live below the poverty 
line. The number of Roma child ren attending school was still lo w and the drop-out rate high. 
Segregation of Roma pupils wa s still practised. The practice of sending Roma children with 
learning difficulties to special institutions for mentally disa bled children continued. The 
number of Roma street children is growing. No cases of police violence or targeting of Roma 
were reported through official  channels. Reportedly, Roma suffer disproportionately from 
police abuse, but are reluctant to lodge complain ts. There are no disaggr egated data on Roma.  
Overall , there has been some progress with cultural rights and minority ri ghts. There has been 
some progress on equitable representation an d the government undertook initial steps to 
address the issue of implementation of the law on languages and to foster inter-ethnic 
integration in the education system. Nonethel ess, integration of ethnic communities remains 
limited. Effective implementation of the Ohrid Framework Agreement needs to be maintained, in a spirit of consensus. The c oncerns of the smaller ethnic communities should 
be more thoroughly addressed. Little progress can be report ed regarding th e Roma. They 
continue to face very difficult living condition s and discrimination, particularly regarding 
access to personal documents, education, social protection, healthcare, employment and adequate housing.  
(See also Chapter 23 – Judiciary and fundamental rights)  
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) . No decision has yet 
EN 23   EN been taken on the ICTY prosecutor’s  appeal against the acquittal of a former Minister of the 
Interior, in the Ljuboten case in 2008. Of the fo ur cases that the ICTY referred back to the 
national authorities, thre e have reached the domestic court system. Two of these cases are still 
with the investigative judge. The third case we nt to trial, but has encountered numerous 
procedural obstacles. The fourth case, which relates to senior members of DUI remains 
extremely sensitive and is still in the Offi ce of the Public Prosecutor. Ethnic Albanian 
political parties assert that all the ca ses are covered by the 2002 Amnesty Law. 
The former Yugoslav Republic of Macedonia still 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  form an essential part of the process 
of integrating with the European Union. The count ry has continued to ac tively participate in 
regional initiatives, including the South-East  European Cooperation Process (SEECP), the 
Regional Cooperation Council (RCC), the Centra l European Free Trade Agreement (CEFTA), 
the Energy Community Treaty and the Eu ropean Common Aviation Area Agreement 
(ECAAA). The country continued to contribute to the EU A LTHEA mission in Bosnia and 
Herzegovina. 
As regards bilateral relations with other enla rgement countries and neighbouring 
Member States , relations remained good with Albania,  Bosnia and Herzegovina , Croatia , 
Montenegro  and Turkey . Several high-level visits involv ing these countries took place. 
Implementation of the agreement with Albania  on the free movement of citizens without visas 
has started and the agreement on joint patrolling of common borders entere d into force. With 
Bosnia and Herzegovina  an agreement on cooperation on security matters and a new 
readmission agreement were ra tified. An agreement with Croatia  on the exchange and mutual 
protection of classified data was ratified. Cooperation with Montenegro has been 
strengthened. An agreement on dual citizenship was signed, as were agreements on cooperation on EU affairs, air traffic, tourism,  agriculture and protec tion in the event of 
natural disasters. Defence c ooperation has been intensified. Negotiations on an agreement on 
social security are ongoing.  
A strategy was signed to intensify bilateral relations with Turkey , providing for closer 
cooperation in the areas of security, defence, customs, economy, trade, education and culture.  
Relations with Serbia  improved, following difficulties linke d to the country’s recognition of 
Kosovo
5’s independence. A new ambassador to Belgra de was appointed in April. There have 
been several high-level visits involving th e authorities of bot h countries. Economic 
cooperation is continuing to improve. Unresolv ed issues concerning relations between the 
Orthodox churches in the two countries had no major political implications.  
The demarcation of the former Yugoslav Republic of Macedonia's border with Kosovo  has not 
yet been fully completed, but the authorities have maintained a constructive approach throughout the process. (See also Chapter 24 – Justice, freedom and security).  
                                                
 
5 Under UNSCR 1244/99. 
EN 24   EN Relations with Greece  continue to be close, notably in the form of trade, investment and 
tourism, but relations between the two govern ments were affected by the unresolved name 
issue. The country is engaged in talks under the auspices of the UN on resolving it. The 
government initiated legal proceedings agains t Greece before the International Court of 
Justice in The Hague regarding the bilatera l interim accord of 1995. The government named a 
motorway which forms part of trans-Europ ean transport corridor X after ‘Alexander of 
Macedon’. This was received as a provocation by Greece, which consequently suspended its 
financial contribution towards construction of the motorway. Actions and statements which 
could negatively impact on good neighbourly re lations should be avoi ded. Maintaining good 
neighbourly relations, including a negotiated a nd mutually acceptable solution to the name 
issue, under the auspices of the UN, remains essential.  
Relations with Bulgaria  have remained good, with several m eetings at senior  political level. 
However, some controversial issues arose, rela ted to ethnic self-identif ication of individuals 
and political representation of groups on an ethnic basis in the two countries.  
Overall , the former Yugoslav Republic of Macedoni a is participating actively in regional 
cooperation and further developing its bilateral relations with its  neighbours. The name issue 
continues to affect relations with Greece. 
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  The country is participating in the EU pre-accession fiscal survei llance procedure. It presented 
its third Pre-accession Economic Programme in Ja nuary 2009 and submitted its fourth fiscal 
notification in April 2009. However, the pr ogramme and its assumptions quickly became 
outdated, as a result of the rapidly changing in ternational environment.  Another corner-stone 
of the country’s economic policy framework has been cooperation with the World Bank. 
Furthermore, a number of medium-term strategi es define the policy framework, such as the 
national development plan, the public inve stment programme for 2009-2011 and the public 
debt strategy for 2009-2011. Although the government  was geared strongly to the local and 
presidential elections, structural re forms continued in a number of areas. Overall , a broad 
political consensus on the fundamentals of  economic policy has been maintained. 
Macroeconomic stability  
GDP growth decelerated from 5.9% in 2007 to 5%  in 2008. However, after strong growth in 
the first three quarters of 2008 of nearly 6% on average, output growth dropped to 2% in the 
fourth quarter, reflecting the negative impact of  the global financial crisis. Economic activity 
continued to slow down in the first half of 2009, with a year -on-year output drop by 1% and 
1.5% in the first and second qua rters. Production and employm ent in key export-oriented 
industries, such as steel and text iles, have started to decline. Exports declin ed markedly in late 
EN 25   EN 2008 and early 2009, while investme nt and imports began to d ecline substantially in the 
second quarter only. Industrial production d eclined by an average of around 11% during the 
first half of 2009, mainly as a result of lower output of ba sic metals. Average per-capita 
income (in PPS) has increased, from 31.2% of the EU-27 average in 2007 to 32.5% in 2008. 
Overall, after strong growth in the first th ree quarters of 2008, econo mic activity slightly 
contracted in the first half of 2009, mainly re flecting lower external de mand. However, so far 
the slowdown has been limited.  
The current account deficit declin ed from some 16% of GDP in the first of half of 2008 to 
about 14% in the first half of 2009. The main reason was a significant d ecline in imports, in 
particular in mid-2009, while the drop in exports remained limited. However, falling private 
transfers from abroad prevented a stronger declin e in external imbalanc es. At the same time, 
capital inflows, such as FDI declined . Overall, external imbalances remained elevated, as 
strong public spending during the first months of  the year kept imports high, while capital 
inflows were affected by the global crisis. Th is contributed to pressure on the country’s 
foreign exchange reserves.  
The official reserve assets of the National Bank of the Republic of Macedonia  (NBRM) 
dropped sharply in early 2009 but recovered by July to about €1,4 bn (20% of GDP). This is some 20% below their peak in September 2008. The import coverage has dropped to around 
five months of imports. Major factors driv ing this decline were  dividend payments, 
government purchases of equipment, foreign ex change withdrawals by private households in 
spring 2009, reflecting increased uncertainty, and Central Bank interv ention to defend the de 
facto  peg to the euro. Gross external debt ha s continued to rise (from 51% of GDP in 
September 2008 to 53% in June 2009), mainly reflecting increased borrowing abroad by 
private companies. In July, the authorities i ssued an €175 million eur obond (2.5% of GDP), in 
order to strengthen foreign exchange reserves and to cover public sector financing needs. 
External vulnerability has incr eased, as exports and capital inflows droppe d while substantial 
public spending boosted imports. Public borro wing on the domestic financial market has 
contributed to a rise in lending rates, while  private and public borrowing on foreign capital 
markets has increased the country’s external in debtedness. Overall, the crisis and increased 
public spending had a negative imp act on level of foreign exch ange reserves and external 
debt.  
Unemployment remained very high. It dropped slightly from 34.9% on average in 2007 to 
33.7% in 2008. The Labour Force Survey (LFS) a nd national statistics point to a slight 
decline in unemployment when compared to a year before. For example, unemployment rates 
dropped from 34.8% in the first quarter of 2008 to 32.8% in th e first quarter of 2009, while 
until May 2009, the number of registered and actively labour seeking unemployed is below 
the previous year levels. However, data fr om June and July indicate a increase in 
unemployment, probably related to the cris is. Recent government measures to fight 
unemployment have focused on youth unemploymen t and may have contributed to the slight 
drop in the unemployment rate. In the age gr oup of 15-27 years, unemployment has declined a 
bit faster than in other age groups, from 58.4% in  the first quarter of 2008 to 54.4% in the first 
quarter of 2009. The existence of a substantial informal sector sti ll seems to lead to significant 
over-estimation of actual unemplo yment. However, even when ta king this factor  into account, 
very high unemployment remains an important  issue, in particul ar among young people and 
the less educated. Overall, the trend towards a slightly improving labour market situation, 
notably among youth, seems to have continued. Howe ver, the level of unemployment of some 
33% remains very high. 
EN 26   EN Monetary and exchange rate policy have rema ined stability-oriente d. The Central Bank has 
managed to maintain the de facto  peg, keeping the exchange rate  stable at 61.2 denar to the 
euro. In April the Central Bank raised interest rates for short-term Central Bank bills from 7% to 9%, largely to neutralise the impact of th e government’s expansiv e fiscal policy. Private-
sector weighted interest rates started to rise  in spring 2009. Rates for denar loans increased 
from 9.6% in August 2008 to 10.2% in July 2009, while the rates for de nar deposits rose in 
the same period from 6.0% to 7.2%. Spreads ha ve continued to narrow, from 3.6% in August 
2008 to 3.0% in July. The originally high growth in credit to the private sector decelerated 
from 38.4% in September 2008 to 14.2% in July 2009, reflecting lower growth in deposits but 
also Central Bank measures to tighten credit expansion. Overall, the exchange rate and 
monetary policy have remained sound, notably by maintaining the level of the de facto peg to 
the euro, which has helped to maintain confiden ce in the stability of the financial system.  
Inflation reached 8.3% in 2008 compared with 2.3% in 2007. Ho wever in the first eight 
months of 2009, the average price level was 0.3% below the level a year before, mainly due to 
lower prices for food and transport. This prof ile is in line with the decelerating economic 
activity. Overall, inflation has decelerated markedly. 
The fiscal policy stance has become more expansionary, envisaging a further increase in the 
deficit from an actual deficit of 0.9% of GDP in 2008 to a targ et of 2.8% in 2009. In the last 
quarter of 2008, the government embarked on a large spending programme, which turned the 
previously accumulated surplus of some 2% of  GDP into a year-end deficit of close to 1%. 
The main spending measures at the end of 2008 were  income transfers to farmers, subsidies to 
the State-owned electricity companies and ad ditional budgetary allocat ions to other policy 
areas. Between December 2008 and May 2009, the gove rnment announced three crisis-related 
packages. The first consisted mainly of a pa yment amnesty of accrued tax arrears and the 
transformation of tax arrears of three former State-owned enterprises into State shares. In 
addition, reinvested earnings we re exempted from profit taxa tion, which lowered tax revenues 
by some 1% to 2% of GDP. Furthermore, dead lines for tax collection were eased. In March 
the authorities announced thei r annual update of th eir five-year investment programme, 
planning to raise public investme nt from some 3% of GDP to  about 7%. In May and August 
the authorities responded to lower than exp ected revenue by submitting to parliament two 
rebalancing budget proposals, cutting public sp ending in total by some 12% compared with 
the initial budget proposal. Howe ver, compared with the actual spending in 2008, the revised 
budget still envisages substantial spending increas es. The impact of automatic stabilisers is 
likely to be very limited. General government debt declined from 26% of GDP in 2007 to 
21% in 2008. The main factors behind this de cline were strong nominal GDP growth and a 
low fiscal deficit. However, as  a result of deficit financing, public debt increased to about 
25% of GDP by mid-2009
6. Overall, increased public spendi ng coupled with a crisis related 
decline in revenues led to a significantly higher public sector  financing gap and increased 
public debt.  
In the area of fiscal reforms, the governme nt proceeded with lowering the tax wedge on 
labour by reducing social cont ributions and simplifying collection. Furthermore, the 
authorities have continued to improve the effici ency of tax administration and to simplify the 
tax system. Fiscal decentralisation has continue d. The legal framework for local cooperation 
and also for auditing has been strengt hened. However, the central government’s 
                                                 
6 Public-sector data are not yet presented in accorda nce with the European st andard (ESA 95), thus 
limiting comparability. 
EN 27   EN administrative capacity for monitoring and audi ting fiscal decentralisation remains limited. 
The new responsibilities continue to pose signi ficant challenges to the municipalities and 
require close monitoring by the central authori ties. Overall, the quality of public finances 
continues to be hampered by weaknesses in  medium-term budget planning and priority-
setting, leading to a high proportion of discre tionary and short-term spending decisions.  
The overall macroeconomic policy mix suffer ed from the low quality of government 
spending, with many measures geared more to election-related promises  than to combating 
the crisis. Some spending contributed to an in crease in the trade deficit. As a result, the 
country’s external vulnerability increased and the de facto  peg of the denar to the euro –
 which is the core monetary policy anchor - came under pressure. Inflation decelerated, 
reflecting declining international energy and commodity prices. Additional measures to address structural unemployment, which is a ke y Accession Partnership pr iority, seem to have 
produced some initial positive results. Howeve r, the very high level of unemployment 
remains a key challenge. Overall , the expansionary fiscal policy was poorly targeted and 
contributed to the pressure on external balan ces and the foreign exchange anchor. However, 
macroeconomic stability was maintained. 
Interplay of market forces  
Privatisation is largely completed and the economy is mainly driven by market forces. The 
private sector accounts for so me 82% of total output genera tion and some 77% of total 
employment. However, during the last year some of  the anti-crisis measures led to an increase 
in the State’s involvement. For example, the m easure to offer debt-equ ity swaps to troubled 
companies with substantial payment arrears in creased the number of companies under State 
ownership from 58 to 70 (15%), leading to a ri se in the share of State capital from 11% of 
GDP in mid-2008 to 13% in mid-2009.  
More than 90% of the State capital is concentrat ed in five companies, mainly public utilities, 
such as for electricity production and transmission. The persisting practice of setting 
electricity prices below cost recovery is a significant burden on public spending and distorts 
the domestic price structure. Overall , the State’s role in the economy has increased slightly as 
a result of some of the anti-crisis measures. Ho wever, market forces are still the predominant 
feature of the economy.  
Market entry and exit 
The government has continued improving legislat ion on market entry and exit. The second 
phase of establishing a ‘one-stop shop’ for bus iness start-ups has been launched, focusing on 
facilitating the exchange of info rmation between the various data -collecting institutions, such 
as the central registry, the Employment Agency  and the health insurance funds. Updating the 
legal framework for electronic registration and reporting has been anothe r important step. The 
costs of registration have been reduced fu rther. The second phase of the ‘regulatory 
guillotine’ to reduce unnecessary administrative burdens has been completed, adopting measures to accelerate and simplify customs procedures. With regard to closing enterprises, voluntary liquidation has been intr oduced and the backlog of ove rdue cases has been reduced 
further. However, the number of newly create d enterprises dropped by some 20% in the first 
eight months of 2009, compared with the sa me period the year before. The number of 
enterprises exiting the market has increased. This  reflects to a large extent impact of the 
international financial crisis. However, the num ber of new bankruptcies was lower in the first 
eight months than a year before. The averag e duration of bankruptcy procedures has fallen 
EN 28   EN slightly, from two years and two months to  around two years. The backlog in bankruptcy 
cases has been further reduced. Overall , further progress has been made on reducing barriers 
to market entry and exit.   
Legal system 
Some further measures have been taken to im prove the business environment, which is a key 
Accession Partnership priority. The legal system  for a functioning market economy is largely 
in place. Good progress has cont inued to be made with regist ration of property rights, by 
further extending the coverage of the real estate  cadastre to more than 90% of the country’s 
territory compared  with 82% in September 2008. The back log of unresolved property disputes 
has been reduced further, from some 7,500 in autumn 2008 to some 2,400 by September 
2009. However, in general, legal procedures are still slow and sometime s the quality of court 
decisions is low. This is continuing to ha ve a negative impact on legal certainty and is 
impeding the proper functioning of market m echanisms, with an adverse impact on the 
business environment and the country’s attracti veness to foreign investment. The financial 
independence and administrative capacity of re gulatory bodies were strengthened. However, 
some regulatory and supervisory ag encies are not yet fulfilling their role as guardians of the 
rule of law and providers of a level playi ng field for all economic  operators. The large 
informal sector is fuelled by weaknesses in tax and expenditure policies, as well as in law enforcement, including the fight against corrupti on and organised crime. The informal sector 
remains an important challenge, as it reduces the tax base and the efficiency of economic 
policies. Overall , clarification of propert y rights has further adva nced. However, weaknesses 
in the judiciary, includin g slow procedures and insufficient resources, are continuing to have 
an adverse impact on the business environmen t, for example in the area of contract 
enforcement. Corruption has been addressed by policy measures, but remains prevalent in many areas.   
Financial sector development 
The financial sector remained stable a nd so far has withstood well the turbulence on 
international financial markets. Deposits are th e sector’s main source of liquidity. The value 
of its financial assets declin ed slightly, from 65% of GDP in September 2008 to 63% in mid-
2009. The volume of credits rose slightly, from  41% of GDP in Sept ember 2008 to about 42% 
in mid-2009. Deposits have declined as a share of GDP, from 45% in September 2008 to 41% 
in mid-2009. As a result, the coverage of credits  by deposits has declined, but is still slightly 
above 100%. Two voluntary pension insurance funds started operati on in 2009, but overall, 
financial intermediation by the non-banking sector  has remained very low. After a strong 
decline in 2008, the capitalisation of bond and stock markets has recovered slightly in recent months, reaching some 29% of GDP (stocks 25% and bonds 4%), which is  the level recorded 
at the end of 2006.  
The structure of the sector has remained la rgely unchanged. However, the share of foreign 
capital in it has increased, due  to foreign investments in th ree domestic banks. The share of 
State ownership in the sector remains low, at so me 6.5% of the sector’s assets. The main State 
assets consist of a majority share in the country’s only development bank and a limited number of remaining minority sh ares in other private banks. 
There are 18 banks and 11 saving s banks operating in the market, with the five largest banks 
accounting for some three quarters of the secto r’s assets and deposits. The efficiency of 
financial intermediation has increased, as in dicated by the continue d narrowing of spreads 
EN 29   EN between lending and borrowing rates, from 3.5 percentage points in September 2008 to 3.2 
percentage points in April 2009. Following the out break of the crisis, profitability in the 
sector dropped sharply, with the average return  on equity declining from 16.5% in September 
2008 to 1.8% in March 2009. The return on assets  declined from 1.9% in September 2008 to 
0.2% in March 2009. In order to contain the origin ally rapid expansion of credit and to lower 
the pressure on foreign exchange reserves , the Central Bank introduced a number of 
administrative measures.  
Despite increased 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. The exposure of the banking sector to no n-performing loans rose slightly in the first 
half of 2009. Their share in tota l loans rose to 7.5% at the en d of March 2009, compared with 
6.6% in September 2008, thus returning to the level recorded in 2006. Loans with a foreign 
currency component remained largely stable at so me 54% of total loans.  The capitalisation of 
the banking sector remained high, with an average capital adequacy ratio of 17% in the first quarter of 2009. Large banks reported an aver age capital adequacy ratio of 14% and small 
banks as high as 60%. Overall , the financial sector maintained a sound performance, 
weathering relatively well the negative impact of  the global financial crisis. The size of the 
sector remained stable, w ith total assets accounting for some 60% of GDP.  
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 negative impact of the 
global financial turbulence. Further progres s has been made on improving conditions for 
market entry and exit, registra tion of property rights and addressing impediments to job 
creation. However, the slow pace of judiciary pr ocedures and the at times deficiencies of 
supervisory and regulatory agencies are st ill hampering the functioning of the market 
economy, in particular with resp ect to contract enforcement and establishment of a level 
playing field for market partic ipants. Structural unemployment  remains very high, pointing to 
structural weaknesses, such as skills mismat ches, and insufficient functioning of the labour 
market.  
Human and physical capital  
The authorities maintained their efforts to provide  education to a greater number of pupils and 
to improve vocational training for adults. Budgeta ry allocations for education increased, from 
around 3% of GDP in 2007 to about 4% in 2008. A significant share of the additional 
spending has been on renovation and construction of school buildings a nd the purchase of IT 
equipment. The number of teachers in primar y and secondary schools has been increased by 
some 4%, in particular in the area of prim ary education. However, there is still room for 
improvement in the efficiency of public spendi ng on education and the quality of education. 
Despite these efforts, the overall  level of education and traini ng of the labour force is still 
relatively low and the mismatch between the qua lification profile of the labour force and the 
requirements of enterprises still seems substantial. Overall , measures to improve the level of 
qualification have continued. However, further sustained efforts are necessary .  
The country’s capital endowment has remained rela tively low and its quality is still suffering 
from previous periods of under-investment.  Some further progress has been made on 
EN 30   EN improving the electricity network and upgradi ng further parts of European North-South 
transport corridor - Corridor X. Largely as a co nsequence of the crisis , inflows of FDI have 
decelerated after relatively strong growth in rece nt years, falling to some 5% of GDP in the 
first quarter of 2009, compared with about 12% th e year before. In some cases, persistently 
slow legal procedures and fragmentation of  responsibilities betw een central and local 
governments are an impediment to FDI. Overall , the country’s capital stock remains relatively 
low, in particular in the light of the need to  accelerate growth. Infras tructure continues to 
require repair and modernisation. 
Sectoral and enterprise structure 
In terms of output generation, the overall  trend towards a larger contribution by 
manufacturing, construction and trade in servic es and a declining share of agriculture has 
continued. In terms of employment, services a nd agriculture grew in importance, while in 
terms of enterprise creation the trading sector appears to be the most dynamic. To a certain 
extent, this increase in trading companies might  reflect a relative re duction in unregistered 
economic activities more than a structural change. However, th is overall picture could also 
point to a trend of increasing employment in activities with low capital and skill requirements but also low value added and, th us, also low income. The info rmal sector remains large, 
although there are indications th at it has been reduced somewhat, for example by improving 
tax collection, lowering the tax burden, reforming collection of social se curity contributions 
and providing financial in centives for registration.  Liberalisation of the telecommunication 
industry continued. However, gas and electricity markets remain dominated by single 
suppliers, undermining effective competition. Overall , limited progress has been made on 
structural change towards dive rsification and activities with  higher value-added. Competition 
in network industries remains constrai ned by dominant incumbent suppliers 
State influence on competitiveness 
Direct State influence on competitiveness is lo w but has increased, partly as a result of 
government intervention to shield troubled comp anies from the negative impact of the crisis. 
Indirect State aid is still  leading to distortion in relative pric es, in particular in the electricity 
sector.
 Energy prices still do not cover the full costs,  which distorts the price structure, leads 
to substantial losses on the part of State- owned energy providers and requires significant 
budgetary transfers. Official data on State ai d point to a low level of about 1% of GDP. 
However, this figure is not comparable to State aid data compiled in accordance with EU 
standards. Overall , State influence on competition is low in most areas.  
Economic integration with the EU 
The country has a small, open ec onomy, with total trade in goods  and services accounting for 
some 130% of GDP in 2008. Trade integration w ith the EU is advanced, with about 60% of 
all exports being directed to and about 50% of imports originating from EU-27. CEFTA is the 
country’s second most important trading partner,  with about 37% of e xports and about 11% of 
imports. The importance of CEFTA as an export  destination has continued to increase. The 
export structure remains highly concentrated on a limited range of products, with textiles and 
clothing accounting for about 24% of total exports and manufact ured iron products for some 
26%. Overall , trade integration with the EU is well advanced, but the commodity mix remains 
concentrated on a few price-sensitive products. 
EN 31   EN International price competitiven ess remained unchanged. The exch ange rate against the euro 
has remained stable in nominal terms, while de facto  wage increases took into account 
international price developments.  
4. ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP  
This section examines the former Yugoslav Re public of Macedonia's ab ility 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 ca pacity 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 duri ng the reporting period and summa rises the country's overall 
level of preparations.  
4.1. Chapter 1: Free movement of goods 
There has been some progress in the area of general principles.  An action plan for achieving 
compliance with Articles 28 to  30 of the EC Treaty was a dopted by the government in 
August. Activities for its implemen tation still need to be launched. 
Some progress can be reported on horizontal measures.  A working group for development 
and implementation of framework laws and rela ted implementing legislation was established. 
The framework legislation is still not fully aligned with the acquis . A comprehensive strategy 
with milestones for implementation of the acquis  for the relevant horizontal institutions has 
yet to be prepared. Separation of tasks has improved, but very few independent bodies for 
testing, certification a nd inspection exist.  
In the area of standardisation , the pace of adoption of European standards (ENs) has 
accelerated, but the country is sti ll far from the target set for 2010.  By August 2009 a total of 
6,011 European and international standards had b een adopted as national standards, mostly by 
endorsement. They relate mainly to the new ap proach directives regulating electromagnetic 
compatibility, machinery and construction prod ucts. A total of 3,300 national standards give 
presumption of conformity, following the new a pproach directives. Of these, 326 relate to 
construction products.  
The number of technical committees within the Institute for Standardisation (ISRM) has 
increased to 32 and the membership of the ISRM  assembly has risen to 70. The administrative 
capacity of the institute was strengthened by recruiting six new member s of staff, making a 
total of 19, but this is still not sufficient. In order to ac celerate the process of adoption of 
standards, two ad hoc techni cal boards were established. No further progress was made 
towards full membership of the Europ ean standardisation organisations.  
The Ministry of Economy authorised  six legal entitie s to undertake conformity assessment  of 
motor vehicles and two to undertake conformity assessment of lifts.  
Operation of the Institute for Accreditation  (IARM) was enhanced by changes to a number of 
internal acts regulating the accreditation procedure. Six new technical committees and a training centre were established. The number of  full-time staff rose to 13, which is still 
insufficient. The institute also draws on the expertise of 12 lead as sessors, 51 technical 
assessors and 44 experts. So far 36 conformity assessment bodies have been accredited by the IARM. The Institute for Accreditation became an associate member of International 
EN 32   EN Laboratory Accreditation Coope ration (ILAC) and signed coopera tion agreements with the 
accreditation bodies of Bulgaria and Kosovo. In February 2009 it applied to sign the 
European co-operation for Accreditation (EA) multilateral agreement covering testing laboratories, inspection bodies and product certif ication bodies. 
In the area of metrology , a rulebook on maintenance a nd preservation of national 
measurement standards and reference standard s as well as a rulebook on requirements for pre-
packaging were adopted. The capacity of the Bu reau of Metrology was st rengthened with the 
aid of a new organisational structure, includin g sectors for calibration, for verification of 
measuring instruments and for type-approval of vehicles and a unit for human resources. The 
number of staff rose to 37. The bureau signe d a bilateral cooperation agreement with the 
national metrology institutes of Albania, Bulgaria and Slovenia, and memoranda of understanding with the IARM and ISRM. Th e bureau does not have enough laboratory 
equipment or trained sta ff to function efficiently. 
Market surveillance  remains weak. The State Market  Inspectorate (SMI) improved its 
organisational structure by establishing three ne w specialised departments for product safety, 
human resources and misdemeanours which, however , still lack adequate staffing. The SMI's 
operational capacity was strengthen ed with IT equipment. In the first semester of 2009 the 
SMI undertook 365 inspections related to the La w on General Product Safety and 85 related 
to the Law on Construction Products. The wide  scope of responsibil ities, understaffing, 
inadequate powers of the inspectors and poor funding seriously limit the ability of the SMI to 
conduct checks on technical comp liance of products and to de tect potentially defective 
products. The State Technical Inspectorate, too, is understaffed (it has 12 employees, of 
whom only seven are inspectors) and under-equ ipped. The functioning of the coordination 
body for market surveillance has improved since a new chairperson was appointed. However, 
its administrative capacity remains insufficient.  
Preparations in the area of horizontal measures are moderately advanced.  
There has been some progress in the old approach product legislation . A Law on Motor 
Vehicles and secondary legislation in the form  of twelve rulebooks have been adopted to 
transpose part of the relevant acquis . In addition, a number of manuals have been issued, 
notably on hazardous chemicals, pharmaceuticals and homeopathic medicine. They aim to 
transpose the relevant EC directives; their alignment  remains to be confirmed. In the case of 
the old approach product legislation, the country is slowly advancing.  
Some progress can be  reported in the new and global approach  product legislation.  Further 
alignment with the sector-specific acquis continued, with the a doption of implementing 
legislation on medical devices, electromagnetic comp atibility and safety of lifts. In the case of 
the new and global approach pr oduct legislation, the country is also advancing slowly. 
There has been no progress in the area of procedural measures.  
Conclusion 
Some progress has been achieved in the area of free movement of  goods. A significant part of 
the horizontal and sectoral acquis has yet to be transposed. The administrative infrastructure 
and capacity are still inadequate for full and e fficient implementation and enforcement of the 
legislation. 
EN 33   EN 4.2. Chapter 2: Freedom of movement for workers 
Little progress can be reported on access to the labour market . No progress has been made 
concerning employment of EU c itizens in the public service a nd exercise of public authority. 
Preparations in this  area are starting.  
There has been some progress towards preparing for participation in the EURES (European 
employment services) network. Implementing legislation was adopted that allowed the 
Employment Agency to bring into operation an  electronic system ensuring on-line access to 
all job vacancies communicated to the agency. The classification of vacancies complies with 
the EURES requirements. However, the huma n resources available are insufficient to 
implement the system. Preparations in the area of EURES are on track.  
There has been progress in the area of coordination of social security systems . Bilateral 
social security agreements with Belgium and Luxembourg were ratified, bringing the total to 
ten. However, the capacity available remains insufficient to coordinate social security schemes. In this area, the count ry is moderately advanced.  
Progress can be reported to wards introduction of the European health insurance card . 
Agreements on applying the card were concluded with Bulgaria, Poland and Germany, bringing the total to five. Howeve r, the capacity available remains insufficient to introduce the 
card. Preparations for introduction of the European health insurance card are at an early stage. 
Conclusion 
There has been some progress in the area of freedom of movement for workers. Alignment 
with the acquis  is at an early stage. The administrativ e capacity is insufficient for participation 
in EURES, for coordination of social security systems and fo r introduction of the European 
health insurance card.  
4.3. Chapter 3: Right of establishment and freedom to provide services 
Some progress has been made on the right of establishment . Efforts have been made to 
increase the transparency and objectivity of d ecisions granting authoris ations, although some 
decisions, particularly in certain sectors, are de layed or reversed. In this area the country is 
moderately advanced.  
Little progress can be reported on the freedom to provide cross-border services . The 
legislative requirements which impose nationalit y, residence and establishment requirements 
for some service activities have been removed. However, not enough work has been 
undertaken to differentiate between the treatm ent of foreign operators providing many cross-
border services and of those providing services via a permanent establishment in the country. . 
The administrative capacity of th e various authorising bodies is not satisfactory . Coordination 
between them needs to be reinforced. In the area  of cross-border services the country is not 
yet prepared. 
Good progress can be reported in the area of postal services . Legislation implementing the 
new Postal Law has been adopted with the aim of aligning with the first two Postal 
Directives. Alignment remains to be confirme d. The Postal Agency became fully operational 
and self-financing. Its administra tive capacity has been strength ened with the employment of 
four additional experts raising th e total number of staff to eleven . The agency has signed a 
memorandum of understanding with the Commi ssion for Protection of Competition. The 
EN 34   EN Postal Agency performs the duties of regulating the postal market and enforcing postal 
legislation independently. It ensures transpar ent and non-discriminatory application of the 
postal legislation. Preparations in the area of postal services are advanced. 
No progress has been made regarding mutual recognition of professional qualifications . 
Work on alignment of training with the requirements of Directive 2005/36/EC on the recognition of professional qualifica tions has started, but tangible results have yet to be seen. 
Preparations for recognition of foreign prof essional qualifications are being launched. The 
Ministry of education has published the proc edures and the format for registration of 
professional qualifications obtained abroad. No  procedure has been set as regards the 
recognition of professional qualif ications and its differentiation from the recognition of 
academic qualifications.
 The current administrative structures allow academic recognition of 
foreign professional qualifications only. Nationa lity and reciprocity clauses still exist. 
Alignment with the Lawyers’ Directives (77/2 49/EEC and 98/5/EC) has yet to be achieved. In 
the area of mutual recognition of  professional qualifications, th e country is not yet prepared. 
Conclusion 
Progress in this chapter has been  partial and mainly confined to  postal services and right of 
establishment. No substantial progress can be reported on mutual recognition of professional qualifications. There is a lack of coordination between the va rious bodies responsible for 
authorising cross-border services. 
 
4.4. Chapter 4: Free movement of capital 
Some progress was made in the area of capital movements and payments . The country 
already met the requirements of the first stag e of the SAA in 2008. Some of the implementing 
legislation on foreign-exchange operations ha s been adopted. It partly transposes the acquis . 
Amendments to the Law on Pension Insurance s lightly eased the stringent restrictions and 
requirements regarding the type and volume of domestic securities in which pension funds 
may invest. EU citizens are allowed to purchase building land, but restri ctions remain on the 
purchase of agricultural land. There are ce ilings on the amounts that non-residents can 
transfer through their denar and foreign exch ange accounts. The Law on Foreign Exchange 
Operations imposes some restrictions on the amount of cash that may be carried across the 
borders which are not fully aligned with the acquis . Nationals are still not allowed to buy 
shares in non-domestic companies, to open ac counts in foreign banks or to purchase real 
estate abroad. As provided for by the Foreign Ex change Act, the remaining restrictions on 
residents regarding portfolio investments will be removed automatically when the second 
stage of the Stabilisation and Association Agreem ent begins. Overall, preparations in the area 
of capital movements and payments are advanced. 
There was no further progress in the field of payment systems . A new Payment Services Law 
was adopted, but it is not aligned with Dir ective 2007/64/EC. Full implementation of the law 
was postponed, as the Ministry of Finan ce amended the regulations on the payment 
instruments and prolonged the deadline for thei r implementation in the country from 1 August 
2009 to 1 January 2010. The definition of ‘globa l electronic money system’ in the Law on 
Fast Money Transfers creates an effective barr ier to entry to the money remittance market. 
The charges for cross-border electronic paymen t transactions are sti ll disproportionate to 
those for domestic electronic payments. In the area of payment systems, the country has only 
partly met its targets. 
EN 35   EN Some progress has been made in the fight against money-laundering . Relevant 
implementing legislation has been adopted. Th e central bank issued a manual on the setting 
up and implementation of the anti-money-launde ring programme, requiring each bank to 
adopt a programme on combating money launde ring, including a centralised database and 
continuous training to releva nt staff. The Council of Europe Convention on Laundering, 
Search, Seizure and Confiscation of the Pr oceeds from Crime and on the Financing of 
Terrorism (the ‘Warsaw Convention’) was ratifie d and entered into fo rce in September. A 
new three-year strategy, covering the period 2009-2011, wa s adopted on prevention of 
money-laundering and financing of terrorism. It includes measures to implement the 2008 
Moneyval recommendations issued to the c ountry. The Office for Prevention of Money-
Laundering and Financing of Terrorism has a dopted several implementing measures which 
tighten up the reporting requirements and has enha nced the database and connectivity with the 
reporting institutions. The office developed guidelin es for supervision of the reporting entities 
for the purpose of detecting and reporting susp icious transactions. It signed memoranda of 
cooperation on sharing information with its coun terparts from the United Kingdom, Portugal, 
Belgium, Monaco, Turkey and eight other non-EU -Member States, bringing the total of such 
memoranda to 31. The administrative capacity of the office has been reinforced by recruiting 
four new members of staff. The awareness of so me of the reporting institutions is still not 
adequate and the office does not have sufficient access to the databases of some of them. The 
number of reports of suspicious transactio ns was very low and there is no credible 
enforcement record. More than half of the empl oyees in the office are on a temporary contract 
and it is not clear for how long they will be employed. Overall, th e preparations in the area of 
money laundering are moderately advanced. 
Conclusion 
Progress in the area of free move ment of capital was uneven and mainly confined to the fight 
against money-laundering. The obligations st emming from the first stage of the SAA 
regarding free movement of capital were met in 2008. There are restric tions on short-term 
capital movements and on cross-border transf ers and no progress was observed as regards 
payment systems. The legislative preparedness and administrative capacity to combat money-
laundering have increased, but there is no pr oper feedback on enforcement by the courts. 
4.5. Chapter 5: Public procurement 
Progress has been made as regards general principles . The Law on Public Procurement 
(LPP) was amended. It is fundamentally aligned with the acquis,  although it does not reflect 
the full flexibility of the arrange ments on utilities permitted under the acquis . The current 
Law on Concessions and Public-Private Pa rtnerships is not aligned with the acquis and 
diverges from good international practice. The Public Procurement Bureau (PPB) cooperates 
with the State Audit Office, the State Comm ission for Prevention of Corruption and the 
Commission for Protection of Competition. Ho wever, several major tenders have been 
cancelled or failed. Statistics on corruption cases related to public procurement handled by the 
courts are missing. The general le vel of awareness as regards c onflicts of interest is still 
insufficient. The unit responsible for concessions  in the Ministry of Economy responsible for 
concessions lacks sufficient human and budgetary re sources. In the area of general principles, 
the country is well on track. 
Progress has been made on award of public contracts . The legislation implementing the LPP 
was adopted in full, including the common procur ement vocabulary. The le vel of alignment of 
the adopted legislation has yet to be confirmed. A unified no menclature for public tenders 
EN 36   EN above certain thresholds became obligatory for a ll State institutions and all public companies. 
The PPB became a separate legal entity. It was moved to suitable premises and recruited two 
new members of staff, but the staffing remains insufficient. The administrative capacity of the contracting authorities and ec onomic operators has increased and the electronic system for 
public procurement is used more frequently. Standard tender documentation and user-friendly 
manuals are available on the website of th e PPB, which is regularly updated. Numerous 
training courses were provided fo r contracting authorities and economic operators. A training 
centre for public procurement has been establis hed and approximately 40 trainers have been 
trained. Activities to raise awareness on conflicts of interest are needed. 
Progress can be reported as regards the remedies system. The State Appeals Commission 
(SAC) has been established. The president and four members were appointed by parliament, 
after an open competition, for a five-year term  of office and five staff were recruited. 
However, the SAC’s move to its new premises  was delayed and it has a limited budget which 
does not cover expenses for technical advice fr om external experts. Alignment with the 
amended EC Remedies Directives has yet to be achieved. A fee for filing complaints was 
introduced, but the number of complaints s ubmitted remained high. The SAC holds weekly 
sessions. Decisions are taken at  a satisfactory pace and publishe d on the website of the PPB. 
However, the perception of economic operators is that decisions focus on procedural issues 
and are biased in favour of the contracting au thorities. Overall, as regards the remedies 
system, the country has started to ad dress the most urgent priorities.  
Administrative capacity and coordination mechanis ms of the main stakeholders in the public 
procurement system still need further strength ening, in particular to reduce the scope for 
corruption. 
Conclusion 
Good progress has been made in the area of pub lic procurement. Significant steps have been 
taken towards aligning the legislation with the acquis.  However, further work is needed on the 
legislation on concessions and public-private part nerships. Contracting au thorities have been 
making increasing use of the e-procurement sy stem. The work of the Public Procurement 
Bureau is well perceived by stakeholders, but th e success of the remedies system depends on 
an authoritative track record of  review decisions. Further work  is required to enhance the 
administrative capacity at all levels. 
4.6. Chapter 6: Company law 
There has been good progr ess in the area of company law . Links between the central registry, 
the employment agency and the health, pensi on and disability funds are operational. A 
disaster recovery system was put in place by th e central registry. However, the provisions in 
the Company Law on approval of interested-party  transactions and cross-border mergers have 
still not been amended.  
Little progress was made on corporate accounting . A rulebook on the requirements for 
submitting annual accounts in electronic form was adopted. Soft and hard copies of the annual 
accounts are now submitted via the central registr y, either electronically or directly. The 
Department for Financial Systems in the Minist ry of Finance is now sufficiently staffed to 
prepare instructions and properly enforce acco unting and financial reporting requirements. 
The delays in translating and transposi ng international account ing standards (IAS), 
EN 37   EN international financial reporting st andards (IFRS) and the accounting acquis  have persisted. 
The 2003 edition of the IFRS and the 2004 edit ion of the IAS were still being used. 
No progress can be reported as regards auditing.  The provisions of the Directive on Statutory 
Audit regarding the public over sight system have yet to be transposed. Chartered auditors’ 
qualifications obtained abroad are still not reco gnised. The Institute for Chartered Auditors 
(ICA) now has two full-time employees, but re mains understaffed. Overall, in the area of 
accounting and auditing the country has started to meet its priorities. 
Conclusion 
Good progress has been made in the area of company law. Howe ver, alignment of the legal 
framework for accounting and audi ting is lagging behind. The admi nistrative capacity of the 
Institute for Chartered Auditors is still not sati sfactory and no public oversight system aligned 
with the acquis  has been established yet. 
4.7. Chapter 7: Intellectual property law 
Some progress has been made on copyright and neighbouring rights . The amendments to 
the Criminal Code regarding breach of copyr ight and increasing the maximum prison term 
have had a positive impact. The number of court proceedings has increased. They lasted between one month and about three years. The website on copyright prot ection established by 
the Ministry of Culture is not regularly updated. 
The administrative court instru cted the second-instance co mmission to annul within one 
month its decisions suspending th e activities of two of the three collective rights management 
societies. However, this has yet to be done. The Constitutional Court annulled some provisions of the rulebook on the levy scheme a nd the rulebook on the calculation of royalties 
of the Association for Protec tion of Copyright on Musical Wo rks (ZAMP). Concerns have 
been expressed about this deci sion, which relates to interpretation of Article 146(6) of the 
current Copyright Law. The court stated that copyright royalties shoul d be calculated only on 
the profit, not on the income, from  using a copyright work. Overa ll, in the area of copyright 
and related rights the country is moderately advanced. 
There has been good progr ess in the area of industrial property rights . The country became 
a member of the European Patent Organisa tion. The State Office for Industrial Property 
(SOIP) is responsible for implementing the Eu ropean Patent Convention (EPC). A new Law 
on Industrial Property provides the basis for impl ementing the EPC. Alignment has yet to be 
confirmed. Several pieces of legislation implementing the new Law on Industrial Property 
have been adopted. 
A Law on Plant-Breeders’ Rights was enacted.  Alignment has yet to be confirmed. The 
International Convention for Protection of New Varieties of Plants ha s been ratified. More 
staff were recruited to the SO IP, bringing the total number to 34. The SOIP and the Ministry 
of Economy undertook a number of public awar eness-raising activ ities. The SOIP, in 
cooperation with the European Pa tent Office, organised seminars  on patent applications and 
drafting patent claims. Alignment of the trademark law is not satisfactory. Overall, in the area 
of legislative alignment on industrial property rights th e country is advanced.  
There has been good progress on enforcement , both at the borders and throughout the 
country. However, piracy and counterfeiting re main widespread. A national strategy and an 
EN 38   EN action plan for building up the capacity needed to implement and enforce the acquis  in the 
area of copyright, related rights and industrial proper ty rights was adopted.  
The Coordination Body for Intellec tual Property (CBIP) was activ e, taking frequent and well-
coordinated action across the country. The gove rnment was informed about CBIP activities 
twice a month and provided support. Appropria te criminal and misdemeanour procedures 
were initiated and outlets were closed. Seized  goods that had been the subject of a court 
decision were publicly destroyed with media coverage. However, the efforts made to combat 
counterfeiting are not sufficient. The goods seiz ed were mainly audio/video CDs, clothing, 
cigarettes and alcohol. Equipment used to  produce counterfeit goods and computers running 
unlicensed software are confiscated but not destroyed. Cooperation with the Agency for 
Managing Confiscated Property has yet to be established. 
Some progress was made on the awareness, e xperience and qualificati ons of inspectors and 
judges. The State Market Inspectorate was provided with extensive IT equipment to 
strengthen its capacity and rece ived training on intellectual prope rty rights (IPR). The customs 
administration increased its IPR enforcement ac tivities. IPR protection has been made an 
integral part of the training curriculum of the academy for training judges and prosecutors 
from the 2009-2010 academic year on. 
The Ministry of Justice has supported the work of the specialised IPR departments of the 13 
basic courts and submitted monthly statistics on IPR-related court proceedings to the SOIP. The number of misdemeanour, civil and crimin al proceedings is unsatisfactory. About 40 
copyright and industrial propert y cases were completed in 2008. Fines and other sanctions 
were imposed in about half of them. Howeve r, fines were not imposed effectively and 
averaged €250, ranging from €15 to €10,000. A reliab le enforcement record has yet to be 
established and the method for collecting stat istical data on enforcement is weak. Some 
awareness-raising activities have been carried out, but the overall level of awareness about 
IPR is still unsatisfactory. Although the countr y has started to address its priorities, the 
resources allocated are still insufficient for proper IPR enforcement. 
Conclusion 
Some progress has been made towards stre ngthening the legal framework and enhancing 
administrative capacity and institutional cooperati on in the area of intellectual property law. 
The track record regarding the number and va lue of goods seized and destroyed and the 
number of court proceedings initiated and completed is not  yet satisfactory. Overall, 
enforcement, though improving, is not yet satisfactory. 
4.8. Chapter 8: Competition Policy 
Some progress can be reported in the area of anti-trust, including mergers . Amendments to 
the Criminal Code were enacted that include  separating the powers of the Commission for 
Protection of Competition (CPC) from those of the public prosecutor’s office in cartel cases. 
The CPC issued three more manuals necessary  for implementing the Competition Law. The 
enforcement record in mergers has been strengthened, whilst it remains low in the area of cartels. However, the administrative court annulle d most of the CPC’s decisions on abuse of 
dominant positions. The pace at which the administrative court takes these decisions varies. Delays tend to occur in misdemeanour cases  only when decisions are not likely to be 
favourable to the company concerned. The suspension clause for sanctions under both 
EN 39   EN administrative and misdemeanour decisions has st ill not been removed, which diminishes the 
deterrent effect of the sanctions. 
The number of staff in the CPC dealing with an ti-trust and mergers has increased by two, but 
capacity remains weak. Some trai ning was given, but this was not sufficient to respond to the 
complex task of ensuring fully transparent and non-discriminatory application of the 
Competition Law. The CPC moved to more suita ble premises. It continued to perform its 
duties independently, although its budget for 200 9 was further reduced. The number of judges 
in the administrative court working on competition cases is adequate, but they have not been included in the regular training programmes on co mpetition policy. Preparations in the area of 
anti-trust, including mergers, are advancing. 
There has been some progress in the field of State aid . The regional aid map was adopted. 
Amendments to the Law on Technological-Industr ial Development Zones, aimed at bringing 
it in line with the acquis, were adopted by the government and submitted to the parliament for enactment in September. The number of ex ante  State aid decisions increased. Efforts have 
been made to establish an effec tive and comprehensive system for ex ante control of State aid. 
The number of reporting instituti ons has increased. However, the ex ante  control of State aid 
is partial and confined to a few large State aid providers. Some institutions, in particular those 
providing indirect aid, are still re luctant to send notifications to the CPC. The awareness of 
State aid regulations among government institu tions, business and the general public has 
somewhat increased, but remains inadequate. Th e administrative capacity of the CPC, though 
increased, still needs to be stre ngthened to ensure proper monitori ng of State aid. In the area 
of State aid the country is advanced. 
There has been some progress on market liberalisation in network industries. The CPC 
signed a memorandum of cooperation with the Postal Agency.  
Conclusion 
Some progress was made in the areas of an ti-trust, mergers and State aid. A credible 
enforcement record has been built up, in particul ar in the fields of concentrations, although 
the fight against cartels needs to  be strengthened. The number of ex ante  State aid decisions 
increased. The human and financial resour ces of the CPC are still inadequate. 
4.9. Chapter 9: Financial Services 
There has been progress in the area of banks and financial conglomerates . Legislation 
implementing the Banking Law came into force, including decisions on the credit registry, 
exposure limits, liquidity risk and currency ri sk. The central bank (NBRM) has transposed 
further parts of the Basel II framework, which is implemented in the EU by the Capital Requirements Directive. A deci sion on managing interest rate  risks in the banking book was 
adopted and will enter into force in 2010. A decision on the method for determining capital 
adequacy was amended and rules on allocating capital for operational risk were introduced. 
Those provisions will enter into force from th e end of 2011. Use of external ratings will be 
tested in 2009-2010. Standardised approaches fo r determining capital requirements for credit 
risk are not expected to be available before  2011 and advanced approaches not before 2013. 
Since 1 January 2009 banks have been under an obligation to a pply most of the 2004 edition 
of the international financial reporting standards. Alignment with the acquis  on financial 
conglomerates and deposit guar antee schemes has yet to be achieved. Transposition of the 
Capital Requirements Directive has not yet been completed.  
EN 40   EN Since 2008 the NBRM has been applying risk-based supervision and using s upervisory 
reviews. The administrative capacity of th e supervisory department in the NBRM is 
satisfactory, in terms of number of staff and training, for the current level of banking 
regulation in the country. However, it will not  be sufficient to implement advanced banking 
regulations. Consumer protectio n is not sufficiently addresse d. In the area of banks and 
financial conglomerates the count ry is moderately advanced.  
In the cases of insurance and occupational pensions, limited progress can be reported on 
pensions. The guarantee funds of the insurance companies have been increased to €3 million. Transposition and implemen tation of the relevant acquis  are lagging behind. The insurance 
market is not properly regulated and superv ised. The management of the independent 
supervisory authority has been appointed, but it  is not yet operational.  The regulatory function 
is still the responsibility of the sector for financ ial services in the Mini stry of Finance, whose 
capacity remains poor. In 2008 it performed six on- site inspections and imposed sanctions on 
four entities. The IT system necessary for off-site supervision has not been set up yet. There are no memoranda of understanding with other s upervisors in the financ ial sector and with 
foreign insurance supervisors. Some insurance co mpanies still lack adequate reinsurance. As 
regards car insurance, the legislation implem enting the Law on Road Safety has not been 
adopted yet. The provisions in the Law on Compulsory Insurance of Road Vehicles 
authorising the Ministry of Finance to set th e premiums create an effective barrier to 
competition between insurance companies. The proportion of uninsured vehicles has 
decreased from 30% to 17%. According to impl ementing legislation, adopted by the Ministry 
of Interior, as from July 2010 al l vehicles registered in the c ountry will be obliged to carry 
stickers once they have passed the regular technical inspection. 
As regards pensions , amendments were enacted to the La w on Pension Insurance, raising the 
ceiling on the proportion of their capital that pension funds may invest in non-domestic 
securities from 20% to 30%. However, in September 2009 MAPAS amended several manuals 
on pension insurance, thereby postponing the liber alisation of the investments by the pension 
insurance funds due to the global financial cr isis. The Agency for Supervision of Fully 
Funded Pension Insurance (MAPAS) has issued the relevant legislation implementing the 
law. Two voluntary pension insurance funds  are now in operation. The operational and 
financial independence of MAPAS is not secured.  The director and the supervisory board are 
appointed by the government. The government a pproves the annual report and then sends it to 
parliament for information only. The budget of MA PAS is part of the b udget of the Ministry 
of Finance. Preparations in the area of insurance, with the excep tion of pension insurance, still 
need to be launched. 
No progress has been made on financial market infrastructure . The country is at an early 
stage with transposition of the Settlement Finality Directive and the Financial Collateral Directive. Preparations in the area of financial market infras tructure have not yet started. 
Good progress has been made in the area of securities markets and investment services . A 
new Law on Investment Funds entered into forc e. It reflects the basic principles of the acquis  
on undertakings for collective investment in tr ansferable securities (UCITS) regarding the 
structure and operational requir ements of UCITS and management companies. The Securities 
and Exchange Commission (SEC) issued 22 pieces of legislation implementing the Law on Securities, including me asures transposing the acquis  on prospectuses. Alignment remains to 
be confirmed. The SEC has signed memoranda of understanding with the financial police, the 
Office for Prevention of Mone y-Laundering and Financing of  Terrorism and the Public 
Revenue Office and also a memorandum of coope ration with its counter part in Serbia. The 
EN 41   EN SEC became a signatory of Annex B to the International Organisation of Securities 
Commissions (IOSCO) Memorandum.  E-trading was introduced to improve transparency on 
the market. The SEC is self-financing, whic h ensures its operationa l independence. The 
number of employees is now sufficient. The me mbers of the SEC have not become full-time 
employees of the SEC, contrary to the Law on Securities. The IT syst em of the SEC, though 
upgraded to ensure electronic c onnectivity with all st akeholders on the securities market, is 
not adequate. The overlap between  the responsibilities of the NBRM and the SEC in the area 
of licensing and supervision of  trading in securities has not  been addressed. The NBRM 
issued new legislation which furt her overlaps with responsibilitie s of the SEC. In the area of 
securities markets and investment servi ces the country is moderately advanced. 
Conclusion 
There has been some progress in the area of fi nancial services, mainly related to legislative 
developments on the banking sector, securities markets investment services and pensions. 
However, the insurance market is not yet properly regulated and supervised. 
4.10. Chapter 10: Information society and media 
There has been good progr ess in the area of electronic communications and information 
technologies. The concession contracts with operators with significant market power were 
terminated in accordance with the Law on El ectronic Communications. Parliament adopted 
the national strategy on the next generation of  broadband internet. De utsche Telekom sold 
Cosmofon, thereby complying with a request  from the Commission for Protection of 
Competition to put an end to the dominant position that had resulted from its purchase of Cosmofon’s parent company, OTE/Cosmote. Th e emergency number 112 has still not been 
introduced.  
The director of the Agency for Electronic Communications (AEC) was appointed following 
an open competition and after several failed attempts. The AEC recruited additional staff. The administrative capacity of the AEC is now sa tisfactory, but the AEC has not yet allocated 
sufficient resources for conducting market  analyses. The AEC signed memoranda of 
cooperation with the Commission for Protec tion of Competition and the Broadcasting 
Council. It also adopted an amendmen t to the manual on number portability, inter alia  
reducing to two days the time within which op erators have to subm it requests for number 
portability to the new operator, together with porting fees Requests for number portability in 
both the fixed and mobile telephony sector s increased. The AEC adopted implementing 
legislation on retail tariffs, bit-stream access and wholesale line rental. It also granted 
authorisations for transmission of digital te levision services via the public communication 
network (DVB-T) and for a second 3G licence and for radio frequencies for broadband wireless internet access. The administrative capacity of the competent Ministry is not 
sufficient. The laws regulating issues related to  authorisation of cons truction works and right 
of way are unclear, particularly  the division of responsibilit ies between the Ministry of 
Transport and Telecommunications and munici palities. This hinders investment in 
telecommunications networks. In  the area of electronic comm unications the country is now 
well advanced. 
Progress was made in the area of information society services, where a good level of 
alignment has already been achieved.  The secretariat was upgraded into the Ministry of the 
Information Society and the capacity of the newly established ministry was strengthened. Preparations in this area are on track. 
EN 42   EN Progress was made on audiovisual policy . The Broadcasting Council adopted a manual on 
balanced media presentation during election ca mpaigns, in accordance with the Electoral 
Code and the Law on Broadcasting. The manual regulates access to the media and the time 
allocated to different candidates and establishe s the principles for balanced media coverage 
during elections. The Broad casting Council implemented these provisions during the 
presidential and local elec tion campaigns. Protocols on the obligations of public 
communication network operators regarding th e broadcasting of programme services and 
provision of audiovisual medi a services were signed by 51 of the 53 operators.  
The remaining three members of the Broadcasti ng Council were nominated, but only after the 
elections. The administrative capacity of the Broadcasting Council improved but is still not 
adequate to monitor the market effectively. Th e system for collecting the broadcasting fee has 
not been established yet. The sustainabil ity and financial independence of the public 
broadcaster is therefore not ensured. The legal provisions opening up the possibility of 
initiating bankruptcy proceedings against the public  service broadcaster ar e still in force. The 
Broadcasting Council and the public service broad caster continue to be subject to political 
interference, partly be cause of their dependence on financ ing from the State budget. This 
dependence also undermines the au thority of the Broadcasting C ouncil vis-à-vis broadcasters. 
Public expenditure on State advertising is  a significant source of revenue for some 
broadcasters, but is not sufficiently transparen t and therefore has the potential to undermine 
editorial independence. The Broadcasting Law, including the provisions relating to 
concentration of ownership of th e media, was not fully implemente d. It is not yet aligned with 
the Audiovisual and Media Servic es Directive. In the area of  audiovisual policy the country 
has partly met its objectives. 
Conclusion 
Progress can be reported in the field of electronic communicat ions and information society 
services. Competition on the electronic communi cations markets increased as a result of the 
liberalisation process, to the benefit of cons umers. In the area of audiovisual policy, the 
administrative capacity of the Broadcasting C ouncil was strengthened, but the sustainability 
of the public service broadcaster has not b een ensured. The Broadcasting Council and the 
public service broadcaster cont inue to be subject to political interference. Overall, 
preparations in the area of informa tion society and media are advanced. 
4.11. Chapter 11: Agriculture 
Progress has been made on horizontal issues. A law laying down the operating procedures 
for the State Agricultural Inspectorate was enac ted. This includes respon sibilities relating to 
coordination of pre-accession assistance for agriculture and rural development. Additional staff have been recruited in various depart ments throughout the Ministry of Agriculture, 
Forestry and Water Economy (MAFWE) and its agencies. However, the human resources of 
the MAFWE remain insufficient to  deal with its existing and fu ture responsibilities. One key 
concern is its capacity to maintain and furt her develop the vineyard  register and other 
management instruments.  
For 2009 a total of €63.9 m illion was allocated to direct support schemes. These include a 
basic income support scheme supplemented by top-ups under certain conditions, premium 
payments schemes for selected strategic crops and livestock, other direct payment schemes, 
including insurance schemes, and horizontal su pport payments for specific groups of farmers 
or areas. To qualify for any of the support schemes, farmers must be registered in the 
EN 43   EN integrated register of agricult ural holdings. Preparations toward s the establishment of a fully 
functional farm register, with a supporting automated IT system , are at an advanced stage. 
Some progress can be reported towards setting up an integrated administration and control 
system ( IACS) . The MAFWE is developing the backbone of a comprehensive IACS system, 
including a pilot scheme to de velop a land parcel identificati on system (LPIS). Administrative 
responsibility for verifying eligibility for aid has been clarified. The real estate cadastre 
presently covers 87% of the country and a pproximately 81% of its agricultural land.  
The capacity of the paying agency (the Agency for Financial Support of Agriculture and 
Rural Development – AFSARD) has been signifi cantly strengthened in the field of rural 
development, particularly with respect to its control activities. The Law establishing 
AFSARD was amended to make necessary re visions to the regulations for conferred 
management of EU financial assistance under component V (IPARD) of the Instrument for 
Pre-Accession Assistance. The number of staff employed in AFSARD has increased, as has 
their capacity to discharge thei r responsibilities. The proce ss of national accreditation of 
AFSARD and its supporting st ructures has been completed. However, development of 
administrative structures that meet the standa rds required for implementation of the European 
Agricultural Guarantee Fund ( EAGF ) (direct payments) is at an early stage. 
The basis for development of a sustainable a nd efficient agricultural information system 
exists. A pilot price reporting system is in operation, although consiste ncy with EU standards 
has yet to be achieved. The legislati on on a farm accountancy data network ( FADN ) provides 
the basic institutional preconditions  for a functional FADN, although it is not yet fully in line 
with EU requirements. A law on State aid in agriculture has not yet been enacted. The current 
measures  differ from the Community provisions in certain areas.  
Preparations in the area of horizontal issues are still at  an early stage. 
There has been some progress on arable crops, fibre and sugar . Selected crops have been 
identified as the most important a nd alignment of legi slation with the acquis  has been 
initiated. Preparations in this ar ea remain at an early stage.  
There has been little pr ogress in the field of animal products . Some work on alignment of 
legislation has started. Prepara tions are not very advanced. 
Progress can be reporte d in the area of specialised crops . Several pieces of implementing 
legislation were adopted. However, the existing legislation on wine needs to be aligned with 
the recently revised acquis . Equipment for laboratory contro ls and registration of producers 
has been procured and is in operation. However,  the administrative capacity to manage the 
control systems that are being developed is a significant limiting factor. Revised legislation 
covering support for tobacco  production has been enact ed. Alignment with the acquis  in the 
area of specialised crops is moderately advanced. 
There has been good progress in the field of rural development . The rural development 
programme 2007-2013 under IPARD has been adapte d to increase the financial allocations 
available under the various investment m easures. The IPARD management and control 
system is in place and the IPARD Agency as  well as the MAFWE Managing Authority have 
received national accreditation. Th e adoption and systematisation of procedures for the proper 
implementation of the programme has progresse d and the administrative capacity has been 
further strengthened. Implementing national legislation on the setting up of the IPARD 
EN 44   EN programme management and control systems ha s been adopted. The ru ral development policy 
is gradually being aligned with EU requirements.  Preparations in this area are advancing.  
Progress can be reported in the field of quality policy . National registration of designation of 
origin and geographical indicat ions has commenced. A law on the quality of agricultural 
products has not yet been enacted. Preparations in this area are advanced. 
There has been good progress with organic farming . Implementation of the 2007-2011 
strategy for development of organic agri cultural production progressed. A budget of €815,000 
has been allocated in 2009 for implementing the programme . The numbers of nationally 
certified producers and associated  areas of land have increased significantly. Preparations in 
this area are advanced. 
Conclusion 
Progress has been achieved in the field of  agriculture and rural development. The 
administrative capacity of AFSA RD and IPARD operational structures has been strengthened, 
although in other areas administrative cap acity remains weak. Alignment with the acquis  
requires further sustained efforts,  in particular on thorough imp lementation of the legislation 
adopted. 
4.12. Chapter 12: Food safety, veterinary and phytosanitary policy 
Some progress has been made as regards the general principles. The Veterinary Directorate 
has been designated as the competent authority  for coordination in th e food safety sector. 
However, this has yet to be followed up by re moving the overlap betw een the two framework 
laws in this sector, and putti ng in place procedures for cl ose and effective cooperation 
between the various institutions involved in food safety. No tangi ble steps have been taken to 
establish a multiannual national control plan. Differe nt authorities operate on the basis of their 
own individual annual control and monitoring plans. Risk assessment and procedures for 
reduced-frequency checks have still not been  introduced. The Food Directorate gained online 
access to the EU rapid alert system for food and feed (RASFF) via the RASFF desk. 
Progress has been made in the area of veterinary policy . Implementing legislation was 
adopted on control systems in the internal market and for  imports that further transpose the 
acquis.  Alignment remains to be confirmed.  TRACES-like (TRAde Control and Expert 
System) software has been developed and is be ing used at the border inspection posts (BIPs). 
The implementing legislation for approving BIPs ha s not yet been transposed. The capacity of 
the border controls has been upgraded, but is  not sufficient. An EU-compatible control 
system, particularly for import control, is still not in place.  
The adoption of the legislation on identification and registration of the movements of sheep 
and goats has been completed. The system for bovines is largely operati onal, but deficiencies 
have to be noted with registration of moveme nts. Control of movements is very limited. A 
strategy and a work plan have been developed for extending identification and registration to 
pigs. Administrative capacity in the Veterinary  Directorate for identi fication of animals has 
deteriorated.  
Some progress has been made on control measures for animal  diseases.  The contingency plan 
for eradication of foot-and-mouth disease has be en adopted. Its complian ce with EU standards 
remains to be confirmed. Slaughtered animals are tested in accordance with the programme 
for eradication of transmissible spo ngiform encephalopathies (TSE). The acquis  on TSE has 
EN 45   EN not been fully transposed. The capacity of the Ve terinary Directorate for official controls is 
still not sufficient to tackle transmissi ble animal diseases systematically.  
Some progress has been made in the area of intra-Community trade in live animals, semen, 
ova and embryos with the adoption of legi slation transposing the acquis.  Alignment remains 
to be confirmed. The administrative capacity for implementing this legislation is still insufficient. Some implementing legislation on non-commercial movements of pet animals 
remains to be adopted. The EC-approved  annual programme for monitoring the prohibition of 
substances and residue control has not been amended to a dd new products. Legislation 
intended to transpose the acquis  on import requirements for  live animals and animal products 
has been adopted. Alignment remains to be confirmed. No new international veterinary  
agreements have been signed. Legislation implementing the Law on Animal Welfare has still 
not been adopted. The capacity for further transposition and implementation of the acquis on 
zootechnical issues is very weak. The 2009 allocation for veterinary expenditure on measures 
for animal health and veterinary public health is €4.43 million. Additional financing is earmarked for possible implementation of continge ncy plans. The capacity of the laboratories 
of the veterinary faculty has been improved, although in some areas they are under-equipped 
and their independence is still insufficient. Th e laboratories are partic ipating in proficiency 
tests and annual workshops orga nised by the Community referenc e laboratories. The capacity 
of the veterinary inspectors ha s improved, but their number, mana gement and training are still 
not satisfactory. The capacity of th e veterinary service at both cen tral and local levels is still 
not sufficient to put in place an EU-compatible  control system. In th e area of veterinary 
policy, the country has started to address its objectives. 
Some progress has been made on the placing on the market of food and feed . The 
legislation on hygiene rules , specific rules fo r animal products , control rules and specific 
control rules for animal products still only partially meets the EU requirements. The rules for 
animal by-products have been transposed. Alignment rema ins to be confirmed. The necessary 
collection and treatment systems have not yet been set up. The strategy for treatment of 
animal by-products, including categ orisation of risk material , is in an initial phase. 
Guidelines for implementing the hazard analysis  critical control point (HACCP) system, good 
hygiene practices and good manufacturing practices  have been developed and training has 
been provided for food business operators. Th e aid schemes for HACCP certification have 
been extended to 2009. Many food business oper ators have not taken sufficient steps to 
implement HACCP principles, which became compul sory on the national market with effect 
from 1 January 2009 for food of non-animal origin and 1 September 2009 for food of animal origin. There is no strategy for enhanced impl ementation of the HACCP system. Evaluation 
of food-processing establishments for comp liance with EU standards and upgrading 
programmes is at an early stage. Funding of checks
 is still provided by the producers and 
importers. Preparations in this area are being initiated. 
Limited progress can be reported on food safety rules . The existing legislat ion transposes the 
acquis on labelling, food additives, flavourings, f ood supplements, food for particular 
nutritional uses, quick-frozen foodstuffs , contaminants, novel food, GMOs,  ionising radiation 
and mineral waters.  The registers for food for particular nutritional uses and for mineral water 
have not yet been established. The implementing legislation on  extraction solvents, materials 
coming into contact with food and fortified  food has yet to be adopted . The management 
capacity of the Food Directorate is weak. The ca pacity of the laboratory of the Institute for 
Health Protection has been increased, but is still insufficient to provide reliable results. The capacity of the Food Inspectorate has been strengthened, but the number, training and skills of 
EN 46   EN its staff are still insufficient. In the area of food safety rules,  the country has partly met its 
objectives. 
Little progress was made on specific rules for feed . The legislation has not yet been 
transposed. Preparations in th is area are being initiated. 
Some progress can be reported on phytosanitary policy . The implementing legislation on 
plant health (harmful organisms) and plant protection products  has yet to be adopted. The 
plant passport system and regist er of producers, traders and importers of plant and plant 
products has not yet been established. Resp onsibility for inspection and control of 
phytosanitary legislation has been transferred fro m the Phytosanitary Dir ectorate to the State 
Agricultural Inspectorate. Implementing legislation on the quality of seeds and propagating 
material  has yet to be adopted. A new Law on Plant Variety Rights  has been enacted.  The 
administrative capacity of the Phyt osanitary Directorate is weak.  
Coordination between the  various authorities responsible for phytosanitary policy has not 
improved. The responsibilities of  the plant health authority are still divided between the 
Phytosanitary Directorate and the Director ate for Seed and Propagating Material. The 
equipment and facilities for border controls are still inadequate. The ca pacity of the State 
phytosanitary laboratory is still under-used.  
As regards international phytos anitary agreements, no action has been taken to implement the 
international standards for phytosanitary measur es, in particular fo r surveillan ce, export 
certification and determining pest  status. In the cas e of phytosanitary po licy, the country has 
partly met its objectives.  
Conclusion 
There has been some progress on food safety  and on veterinary a nd phytosanitary policy, 
mainly regarding legislative preparedness. The Veterinary Directorate has been designated as 
the competent authority for coordination betwee n institutions involved in food safety, with a 
view to improve the efficiency of the system. The administrative capacity, in terms of both the 
number and skills of staff, is still insuffi cient to ensure proper implementation of the acquis .  
4.13. Chapter 13: Fisheries 
Progress has been made in the field of resource and fleet management . A rulebook on the 
register of producers’ organisations in  the fisheries sector was adopted. The acquis 
requirement on fleet registra tion is not applicable.  
Some progress has been made in the area of inspection and control . The administrative 
capacity of the Fisheries and Aquaculture Unit w ithin the Ministry of Agriculture, Forestry 
and Water Economy (MAFWE) and of the Agri cultural Inspectorate, which plays the 
principal role in control and insp ection of fisheries, is not sufficient. Preparations in this area 
are at an early stage. 
Some progress has been made on structural action . The 2009 fisheries support programme 
allocated €407,000 for support measures. Also, a sub-measure within IPARD with a total 
budget of €456,000 will support investments in  aquaculture and fish farms. 
No progress has been achieved with market policy. The administrative structure for 
implementing market policy is not yet in place.  The MAFWE does not yet have a register of 
EN 47   EN all State aid  approved in the fisheries s ector and has not adopted th e relevant re gulations on 
block exemptions. A significant part of th e 2009 fisheries support programme is designed 
principally to increase indigenous fish stocks.  
There are no formal international agreements . Informal working agreements, including 
scientific cooperation, are in place with Albania and Greece covering management of 
resources in the three lakes whose waters they share. 
Conclusion 
There has been some progress in the area of fi sheries. Administrative capacity still requires 
further strengthening. Since the country is landlocked, much of the fisheries acquis is not 
relevant. Preparations for implementation of the common fisheries policy ar e at an early stage. 
4.14. Chapter 14: Transport policy 
Good progress has been made in the area of road transport . The amended Law on Public 
Roads was enacted. It aims at transposing the acquis  on road tolls and electronic systems for 
paying tolls. It also brought the legislation into line with the La w on Misdemeanours. The 
Agency for Public Roads was set up. Parliament adopted a strategy to enhance road safety. It 
was prepared by the Road Safety Council, which held broad consultations with relevant institutions.  However,  road safety rules are not properly en forced and effective road safety 
campaigns are lacking. Also, there is no clear division of responsibilit ies between the bodies 
dealing with road safety. The Law on Road Transport is not fully aligned with the acquis on 
market access. In September 2009, the Law on Public Roads was amended. The road fee for foreign heavy vehicles was abolished. The amendments, which are in line with the Transport agreement and the SAA, constitute an important  step towards harmonisa tion of the legislation 
with the acquis in the field of road charging
. Preparations are being made for the introduction 
of digital tachographs, whic h will be compulsory by mi d-2010. Two by-laws have been 
adopted. The administrative capacity of the  inspectorate is still insufficient. Preparations in 
the area of road transport are advanced. 
Progress can be reported on rail transport . Further to the unbundling of the infrastructure 
manager and train operators, a system of  track-access charges was introduced. The 
infrastructure manager has published the networ k statement. The procedure for establishing 
an independent regulatory agency for rail se rvices has begun. The act ing director has been 
appointed by the steering board nominated by parliament. 
A safety authority has not yet been established, as required by the railway safety  directive. 
Compensation is still not being paid for public  service obligations. A decision was taken in 
February to resolve the status  of the debts of the national rail transport company and the 
national railway infrastructure company. The licensing procedure for the rail transport 
company is in progress. The €3 million allocated for the first six months of the year for the 
2009 railway investment programme is  insufficient. Preparations in  the area of rail transport 
are advanced. 
Good progress has been made on inland waterways transport with the adoption of 
implementing legislation on the ship’s master examination and certif icate. The government 
adopted a decree on fees for the entry and st ay of foreign vessels on inland waterways. 
Consideration needs to be given to potential security requirements for inland port facilities 
and ports. In this area, the c ountry is sufficiently prepared. 
EN 48   EN No progress can be reported on combined transport . Preparations are on track. 
Some progress can be reported with air transport . In December the country became a full 
member of the Joint Aviation Authorities. A working arrangement with EASA was signed in July 2009. Legislation implementing the Law  on Aviation was adopted, covering professional 
competence, examinations and licences for cabin personnel. The amended Law on Aviation, 
aiming at full alignment with ECAA obligations, was adopted. Parts of the first phase of the 
European Common Aviation Area (ECAA) agreemen t relating to conditions for access to the 
ground handling market and to aviation safety a nd security procedures have not yet been 
implemented. Overall, administrative capacity in the air transport sector remains insufficient. 
The Civil Aviation Agency has not yet been tu rned into an independent body. The staffing of 
the Civil Aviation Agency has not been strengthened. The Committee for Air Accident Investigation lacks sufficient cap acity to act as an independe nt body for investigation of 
accidents and serious incidents. The Air Traffic Department of the Ministry of Transport and 
Communications still lack s qualified staff. Further approximation to the acquis  is required in 
the area of air traffic management. In that c ontext it is important to ensure appropriate 
commitment with the context of the ISIS
7 Programme set up by the Eu ropean Commission to 
assist States of South East Europe to trans pose Single European Sky legislation. In addition, 
participation in the Single European Sky Committ ee (SSC) by national authorities need to be 
encouraged. Preparations in  this area are advanced. 
No developments occurred in the areas of State aid . 
Conclusion 
Good progress has been made in the area of tr ansport policy, in particular as regards road 
transport, including road charging. In general,  legislative alignment is advancing in all 
sectors. However, the administrative capacity in ev ery sector of transport is insufficient, both 
in numbers and in terms of qualifications. An independent regulatory body and safety 
authority for rail transport remains to be estab lished. As regards aviation, an independent civil 
aviation authority and accident and incide nt investigation body are still lacking.  
4.15. Chapter 15: Energy 
There has been some progress on security of supply . The government adopted a regulation 
that defines the criteria and conditions for d eclaring an electricity crisis. The Government 
appointed the Director of the Directorate for Mandatory Reserv es of Oil and Oil Derivatives. 
In September 2009, oil stocks were equivalent  to 42 days of average consumption. The 
legislation is not yet fully aligned with the dire ctives on security of electricity and natural gas 
supply. The strategy for long-term development of the energy sector has not been adopted yet. 
In the case of security of supply, th e country has partly met its objectives. 
Little progress has been made with regard to the internal energy market . The country 
advanced further towards implementing some of the obligations stemming from the Energy 
Community Treaty, notably by adopting the Ga s Transmission Code in line with the 
Regulation on access to the natural gas transmissi on networks. The first of the three planned 
combined heat and power plants started ope ration. The Government adopted an Energy 
Poverty Action Plan that envisages the introdu ction of a social prot ection package for the 
most vulnerable consumers from mid-2010 onw ards. The Energy Re gulatory Commission 
                                                 
7 Implementation of Single European Sky In South Eastern Europe 
EN 49   EN (ERC) adopted rulebooks on electric ity prices, the issui ng of licences, district  heating, natural 
gas and geothermal energy. Certain electricity and gas tariffs do not reflect costs and vary 
significantly between different cat egories of customer, while co llection rates are insufficient 
to secure the viability of the system. The dispute-settlement procedure, opened in September 
2008 by the Secretariat of the Energy Comm unity, on the compliance of the recent 
amendments to the Law on Energy with the obligations stemming from the Energy 
Community Treaty is still in progress. The Secretariat issu ed a reasoned opinion for non-
compliance of the country with the Energy Comm unity Treaty pointing in particular at the 
position and structure of the st ate-owned generating company th at discriminates against non-
domestic electricity and forecloses the regulated  market to the detriment of consumers, and 
the fact that regulated distribu tion tariffs breach the principle of  cost-reflectivity. Furthermore, 
market rules remain to be adopted. 
Natural gas supply has not been  unbundled from natural gas tr ansmission, as required by the 
Natural Gas Directive. The ownership of the gas system has still not been resolved. ERC 
adopted an amended rulebook on gas prices, exte nding the 2008 regulated tariffs by one year. 
A new President of ERC was appointed in June 2009. The process for recr uitment of four new 
staff is underway, but the administrative capacity  will still be insufficient to monitor the 
market effectively. The independence of ERC ha s not always been resp ected. The practice of 
including representatives of the electricity  generation company on evaluation panels for 
tenders continued. The Energy Department of the Ministry of Economy remains understaffed. 
In the case of the internal energy market, the country is not yet sufficiently prepared. 
There has been no progress on State aid . Most of the coal (lignite) reserves are still being 
managed by the electricity gene ration company. There is still no clear legal and financial 
separation between the lignite excavation activi ties and operation of the thermal power plants. 
Preparations in the area of stat e aid are moderately advanced. 
Some progress has been made in the field of renewable energy . The rulebook for obtaining 
the status of preferential producer was adopt ed in February 2009. The first photovoltaic solar 
power plant was put into opera tion. The Government signed a concession agreement for the 
construction of 16 small hydro power plants . However, none of the tenders for the 
construction of large hydroelectricity power plan ts succeeded. Further ef forts to reinforce the 
administrative capacity for developing renewable energy sources are important. In the area of 
renewable energy, the country is moderately advanced. 
Limited progress has been made on energy efficiency . A rulebook on the energy performance 
of buildings, aimed at partial alignment with the acquis , was adopted in November 2008. It 
will serve as the framework for developing energy-efficiency standards for buildings. The administrative capacity of the Energy Agency is  still insufficient to effectively promote 
energy efficiency and renewable energy sour ces; its role and interaction with other 
Government institutions needs to be clarified. An energy-efficiency action plan in line with 
the commitments of the Energy Efficiency Task Force of the Energy Community remains to be adopted. The Energy Agency still lacks ad equate premises. In the area of energy 
efficiency, the country is  at an early stage. 
Progress has been made regarding nuclear safety and radiation protection . The Radiation 
Safety Directorate (RSD) prepared several im plementing regulations. The RSD has started a 
process for licensing use of ra dioactive materials in medical  practices. Cooperation between 
the customs administration and the police to prev ent trafficking in radiation sources has been 
EN 50   EN intensified. The country has acceded to the Jo int Convention on the Safety of Spent Fuel 
Management and on the Safety of Radio active Waste Management. The financial 
independence of the RSD is not secured. Prepar ations in the area of nuclear safety and 
radiation protection are moderately advance d. The existence of hundreds of radioactive 
lightning rods spread all over the country still co nstitutes a radiological thread that needs to be 
addressed. 
Conclusion 
Some progress has been made in the energy sect or. However, amendments to the Energy Law, 
as well as a correct implementation of the le gislation, are necessary in order to meet the 
obligations under the Energy Community Treaty. El ectricity tariffs still do not reflect costs 
and the dispute with the distribution system ope rator, a major foreign investor, has not been 
resolved. As a consequence, an effectively functioning electricity market has yet to be 
established. The degree of inde pendence of the energy regulator  and the radiation protection 
regulator needs to be further improved. The pr omotion of energy efficiency and renewable 
energy sources needs to be prioritised. 
4.16. Chapter 16: Taxation 
No progress has been made in the area of indirect taxation. A reduced rate of value-added 
tax (VAT) for some products, which deviates from the acquis , is still being applied. The 
excise duties on several products are still lo wer than the minimum required by the acquis.  
There was limited progress on direct taxation.  The Law on Profit Tax was amended to 
exempt retained profits from taxation and to  tax only earnings that  are distributed as 
dividends. The profit tax rate for micro-enterprises and self -employed people with a gross 
annual income of less than €49,000 was lowered further, to 1%. The Law on Tax Procedures was amended to allow companies to pay tax a rrears in instalments. The concept of gross 
salary was introduced, which led to increas ed administrative compliance and greater 
discipline on payment of social contributions and personal income tax. Preparations in these 
areas are moderately advanced. 
There has been some pr ogress in the field of administrative cooperation and mutual 
assistance. Double taxation agreements with Ireland a nd Estonia were ratified, bringing the 
number of agreements with EU Member States to 24. A joint memorandum of cooperation was signed with the tax administrations of  Albania, Bulgaria, Kosovo and Turkey.  
Good progress has been made on operational capacity and computerisation. The Public 
Revenue Office (PRO) further strengthened its capacity to implement tax legislation and to 
fight tax evasion. A new system for integrated collection of social c ontributions and personal 
income tax, managed by the PRO, was introduced. As part of the reorganisation of the PRO, 
five regional directorates and eight local units were establis hed and 72 new tax counters were 
opened across the country. Efforts were stepped up to curb corruption and reduce the informal 
economy. The capacity of the PRO at  central level was strengthene d by establishing a contact 
centre for taxpayers in the capital and a centre fo r collection of tax arrears. The control policy 
is being implemented more ri gorously and the capacity for verifying tax returns was 
strengthened. The human resources developmen t strategy has been implemented. A number of 
training sessions were organi sed for professional developm ent of staff and a mentoring 
programme was introduced. The PRO website was redesigned to enhance communication 
EN 51   EN with the public. A code of conduct for business ta xation has yet to be developed and applied. 
Preparations in this area are advanced.   
Conclusion 
Good progress was made on taxation.  The level of legisl ative alignment in i ndirect taxation is 
well advanced. Further efforts are re quired as regards direct taxation . The operational capacity 
of the Public Revenue Office has been st rengthened and tax collection has improved. 
4.17. Chapter 17: Economic and Monetary Union 
Some progress can be reported in the field of monetary policy . The institutional and 
administrative capacity of the central bank improved. The cen tral bank adopted rules on 
calculating and announcing the inte rbank rate on the deposit market and, on 15 October 2008, 
it started calculating and announcing a reference interest rate on the interbank deposit market 
(MKDONIA). This information provides a basis for interbank trade and for the interest rate policy of banks. At this stage, there are still some shortcomings  in the legal framework in all 
key areas, such as the full independence of th e central bank, the proh ibition of monetary 
financing of the public sector a nd the prohibition of pr eferential access for th e public sector to 
financial markets. Preparations in th e area of monetary policy are on track. 
Progress can be reported in the area of economic policy.  The government submitted its third 
pre-accession economic programme, cove ring the period 2009-2011. It presents a 
comprehensive macroeconomic and fiscal fram ework and a broad agenda for structural 
reforms. Although the quality of the programme has somewhat improved compared with the previous year, it still lacks a discussion of po licy priorities and a link to the EU accession 
process. Due to the rapidly changing external environment, it was of only limited relevance as 
a core document for economic policy-making.  
Progress was made in the area of monetary statistics and their compliance with international 
standards. The central bank’s reporting on the balance of payments improved, with more precise estimates of income from direct inve stment. General government  debt in 2008 totalled 
20.9% of GDP, below the range of 34% to 37% of GDP set in the public debt management 
strategy. In June 2009 the Parliament adopted a new public debt management strategy for the 
period 2009-2011. Administrative capacity for polic y implementation is still inadequate at 
municipal level. Preparations in th e area of economic policy are on track. 
Conclusion 
Some progress has been made in the area of economic and monetary policy. Alignment with 
the acquis  remains incomplete. Administrative capac ity for policy implem entation diverges 
widely between the central and local levels. Over all, preparations in the area of economic and 
monetary policy are on track. 
4.18. Chapter 18: Statistics 
Progress can be reported in the area of statistical infrastructure . The State Statistical Office 
(SSO) set out its objectives in  the strategic plan for 2009- 2011. Its budget and number of 
employees increased, but needs to be increase d further. Human resource management tools 
have been further developed, including a wide r range of training and a mentoring scheme. 
Preparations in the area of statis tical infrastructure are advanced. 
EN 52   EN Good progress was made in the fields of classifications and registers . The national statistical 
classification of economic activities complyi ng with the new versi on of the European 
industrial activity classification NACE Rev. 2 as well as new national versions of the 
PRODCOM and CPA product classifi cations were adopted by the government. Data from the 
2008 business census are being used to update the statistical business re gister. Some progress 
has been made on establishing routines to keep  the register up to date. Development of a 
statistical farm register has started.  
Good progress has been made on sector statistics . Progress was made in the preparations for 
the 2011 population and housing census. The pilot census was conducted in May 2009. As 
regards business statistics, new surveys we re introduced and business censuses were 
conducted. Preliminary results on retail trad e capacity and tourism capacity have been 
published. Further improvements have been made in  the area of social statistics. Data from 
the labour force survey and the household budget su rvey were transmitted to Eurostat. A pilot 
survey on income and living conditions was co nducted. Further improvements are needed in 
agricultural statistics. Work continued on improving the exhaustiveness of the national 
accounts, but further alignment with ESA 95 is needed. Preliminary work on harmonised 
indices of consumer prices has started. Coope ration with the Ministry of Finance and the 
central bank improved. A memorandum of un derstanding on cooperation in the field of 
macroeconomics and financial statistics was ag reed by SSO, the Ministry  of Finance and the 
central bank. Data transmission to Eurostat has increased, but needs to be further improved, in 
particularly for macroecono mic and business statistics. 
Conclusion 
Good progress has been made on improving sector statistics and aligning classifications with 
the acquis . The statistical infrastructure has been  strengthened, but the resource situation 
remains weak. Further efforts are needed to meet the Accession Partnership priorities, in 
particular for macroeconomic and agricultural statistics. 
4.19. Chapter 19: Social Policy and Employment 
Little progress has been made on labour law . The national labour legislation has been 
reviewed with a view to transposing the acquis , but it is still not eff ectively aligned with all 
EU requirements. Cooperation between th e relevant institutions has not improved. 
Administrative capacity remains insufficien t to ensure proper implementation and 
enforcement of the labour law. Preparations  in this area are moderately advanced.  
Little progress can be reported in the area of health and safety at work . The 2007 Law on 
Health and Safety at Work is not bei ng fully implemented. The National Council for 
Occupational Safety and Health  provided for in the law ha s not been set up yet. The 
administrative capacity of the labour inspector ate remains insufficient to ensure proper 
implementation and enforcement of the legal prov isions. The number of 35 inspectors remains 
insufficient and working facilities inadequate. Nevertheless, the labour inspectorate carried 
out more inspections than in the previous reporting period. Harmonised criteria and methods 
for recording data on accidents at wo rk are lacking. 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 . A functional and representative social 
dialogue is still lacking. Th e membership of the Economic and Social Council (ESC) 
remained unchanged, thus weakening its position and role. The government organised a 
EN 53   EN considerable number of consultations of social partners that are not currently members of the 
ESC. The lack of clarity regarding the eligibility criteria is also an impediment to the bipartite 
dialogue. The trade unions and employers’ a ssociations still have  limited capacity to 
contribute to development, implementation and evaluation of employment and social policies.  
Members of the Joint Consultative Committee with the EU Economic and Social Committee 
have finally been nominated. Preparations in this area re main at an early stage.  
Some progress has been made in the area of employment policy . The 2009/2010 national 
action plan for employment was adopted. It sets  priorities for active la bour market measures 
and lifelong learning. The government also ad opted the 2009 national operational plan on 
active programmes and measures to be implem ented by the Employment  Services Agency. 
Successful implementation of this plan is critic al in the context of the financial and social 
crisis. The first signs of the impact of the fina ncial crisis were seen by the end of 2008, when 
employment growth decreased. Labour market  participation remains very low and the 
unemployment rate of 32,7 % (35 0,000) registered unemployed in  the first quarter of 2009 
very high ( see also Economic Criteria) . 
The administrative capacity of the Employment Services Agency has been strengthened. Staff 
were trained and sufficient IT equipment was supplied. The budget allocated to the 
operational plan for 2009 was doubled compared with 2008. However, th e allocation is still 
insufficient to cover all the needs identified. 
The Law on Health Insurance was amended in May 2009 with the aim of providing accessible 
social insurance for all citizens. These legislat ive changes are also expected to lead to the 
Employment Services Agency handing over res ponsibility to the Health Insurance Fund so 
that the Agency will be able  to concentrate on its core tasks. Employment in the grey 
economy does not seem to have diminished. Implementation of the Law on Adult Education 
has been delayed and a plan for vocational educat ion and training that pr operly reflects labour 
market conditions is still missing. A dispropor tionate share of the budget for employment 
policy is earmarked for passive measures. The wo rk of the Employment Services Agency is 
still geared too closely to administering th e unemployment and hea lth insurance of the 
registered unemployed. Overall, the financial and human resources available do not match the 
ambitious employment strategies and plans. Preparat ions in this area are still at an early stage  
Good progress has been made in the pr eparations for participation in the European Social 
Fund . The institutional arrangements for implementation of IPA component IV were defined, 
following submission of the acc reditation package to the Commission in March 2009. The 
administrative capacity in the Mi nistry of Labour and Social  Policy was strengthened. The 
capacity of the Ministry of Education and Science remains insufficient. The Commission 
decision conferring management powers for IPA component IV was adopt ed. Preparations in 
this area are on track. 
Limited progress has been made on social inclusion . In line with the go vernment’s national 
strategy for deinstitutionalisation of social care, two small communa l houses were opened, 
which together accommodate nine  people with disabilities. Th e introduction of compulsory 
education for children aged up to 18 is thought to have contributed to diminishing social 
exclusion. Steps were taken to reduce the high dr op-out rate in the early years of education. A 
project implemented by the Ministry of Labour  and Social Policy en abled 243 Roma children 
aged 4 and 5 to be included in pre-school education. However, many Roma children, rural 
girls and children with disabilities still do not  complete their educati on. The policy measures 
to improve access to the labour market for vulne rable groups, including disabled people, are 
EN 54   EN still insufficient. Statistical data and analyses on poverty rema in deficient. Administrative 
capacity in the field of social inclusion has not improved. It is particularly inadequate in the 
municipalities that have taken on  greater responsibility for so cial inclusion policies in the 
second phase of decentralisati on. Coordination between the institutions involved in 
implementing social inclusion policies remains inadequate. Participatio n by all stakeholders 
in developing long-term social inclusion policies is lacking. Ve ry few steps have been taken 
to prevent social exclusion in general. Preparat ions in this area are at an early stage.  
Some progress can be reported in the field of social protection . A law extending the coverage 
of health insurance was adopted in May 2009, and a new Law on Social Protection was 
enacted in September 2009.  A national strategy for development of social protection has also 
been prepared. However, administrative capacity is still insufficient to develop a sustainable 
and equitable social protection system. Preparations in this area are moderately advanced.  
Little progress has been  made in the area of anti-discrimination . The UN Convention on the 
Rights of People with Disabiliti es has been signed but not ratified. The Framework Law on 
Non-Discrimination has not yet been enacted a nd the existing legal provisions are not fully 
aligned with the acquis . Administrative capacity in this area remains insufficient. The 
monitoring mechanisms required by the acquis  have not yet been esta blished. Statistics on 
direct and indirect forms of discrimination are not yet available. Discrimination based on sex, 
ethnic origin, religion, di sability and sexual orientation persis ts. Ethnic minoritie s, particularly 
the Roma community, suffer from discrimination in various spheres of economic, social and 
cultural life. The situation of people with disa bilities has not improved. Preparations in this 
area have started. 
Some progress can be reported on equal opportunities . Civil servants were trained in 
awareness of equal opportunities issues. The administrative capacity of the section for equal 
opportunities in the Ministry of Labour and So cial Policy was strengthened, and its mandate 
for coordinating gender issues with the releva nt bodies was clarified. However, only limited  
progress has been made towards implementi ng the Law on Equal Opportunities. Also the 
capacity of the section for equal opportunities rema ins insufficient to fulfill its role, as well as 
administrative capacity to promote the human rights of women in rural areas. Support for 
activities and initiatives aimed at combating discriminatory customs and traditions and 
stereotypes remains insufficient. Participatio n of women in decision- making at both national 
and local levels is low. Fe male participation in the la bour force remains very low. 
Preparations in this  area are ongoing.  
Conclusion 
Limited progress has been made in the area of  social policy and employment. An effective 
and representative social dialogue  is still lacking. Th e measures taken to improve access to the 
labour market for vulnerable groups, including pe rsons with disabilities,  remain insufficient. 
Consultation with relevant stakeholders on social policies needs to be reinforced. The 
administrative capacity has slowly been strengt hened, but remains insufficient to implement 
properly the legislati on and policies adopted. 
4.20. Chapter 20: Enterprise and Industrial Policy 
Good progress was made on enterprise and industrial policy principles . The government 
started a new phase of the regu latory guillotine project, focusing in particular on customs, 
transport and agriculture. The electronic regist er of all legal acts was established and is 
EN 55   EN operational. Its upgrading and further de velopment are to be regularly pursued . Since 1 
January 2009 all draft laws are, in principle, subject to a regulatory impact assessment (RIA). However, wider stakeholder participation in la w drafting and sufficient systemic analysis of 
legal acts by public bodies ar e yet to be ensured. The indu strial strategy for 2009-2020 to 
promote growth and innovation was adopted. It is  based on five main pillars: international 
cooperation and foreign investme nt; research and innovation;  eco-friendly products and 
services; SME development and entrepreneurship; and collaboration in clusters and networks. 
No budget was allocated for implementation of the strategy in 2009. The human and financial 
resources of the SME Department and the SM E Agency remained the same as in 2008 and 
were still insufficient to improve the c ountry’s performance on implementing the SME 
strategy and the European Charter for Small En terprises. Preparations in this area are 
moderately advanced. 
There has been good, but uneven, progress with regard to enterprise and industrial policy 
instruments.  Annual programmes to support competitiven ess, entrepreneurship, clusters and 
networking were adopted for 2009, totallin g about €0.8 million. Public funding for the 
programmes remains modest and is almost the same as in 2008. The SME support infrastructure was expanded, as 10 regional business support centres were established, 
bringing the total to 29. Neve rtheless, not all the centre s are operating effectively. 
Cooperation between the government and the ch ambers of commerce improved significantly. 
The Agency for Foreign Investment and its overseas-based promoters, with a budget of about €4.5 million for 2009, continued an intensive campa ign to attract foreign investors. An 
amendment to the Law on Obligations partially transposed the acquis on late payment. Alignment remains to be confirmed. SMEs’ on-line access to government services was improved by introducing on-line application syst ems for company registration, export/import 
licences, payment of tax and soci al contributions, etc. The si ngle SME information portal has 
not yet been established. The design flaws of the credit guarantee scheme have not been 
rectified and the scheme remains little used. Good progress has been made in the field of 
education and training for entr epreneurship. The Ministries of Economy and of Education 
took important steps towards a more conc erted cooperation on policies and measures. 
‘Business and entreprene urship’ is now a compulsory subject  in the curricula  for secondary 
and vocational education. Also, in  connection with availability of skills, a working group has 
been formed to identify training needs for SMEs . In this area, the country is moderately 
advanced. 
Some progress can be reported with regard to sector policies . Implementation of the national 
programme for restructuring the steel industry progressed slowl y, because of a steep decline 
in production and exports. The 2009 programme  for development of tourism is being 
implemented with a significantly bigger budget . The Agency for Tourism was formally 
established, but proper staffing and operati on are not yet ensure d. The programme for 
restructuring the textile industry, which is designed to help textile companies find new 
markets, to introduce new technologies and to  support human resource development, started 
modestly, with about €46,000 for 2009. Public funding for cluster development was limited. 
Preparations in this area are on track. 
Conclusion 
Good, but uneven, progress has been made in the field of enterprise and industrial policy. The 
financial resources and administrative capac ity of public bodies for implementation of 
enterprise and industrial policy instruments are mode st. Alignment with the acquis  in this 
chapter is moderately advanced.  
EN 56   EN 4.21. Chapter 21: Trans European Networks 
In the area of transport networks, the country has made some pr ogress. It has continued to 
participate actively in implementation of the 2004 memorandum of understanding on 
development of the core regiona l transport network and in the South East Europe Transport 
Observatory (SEETO), particularly by updating and implementing the multi-annual plan for 
2009-2013. Construction of a new section of motorw ay along corridor X near the border with 
Serbia (Tabanovce-Kumanovo) began. Sound prepar ation of transport projects needs to be 
strengthened, in particular on Corridor X. Special attention needs to be given to a 
comprehensive environmental impact assessment.  Substantial financial resources are needed 
to upgrade the infrastructure, in particular as  regards rail Greece has suspended its bilateral 
contribution to the financing of Corridor X. In this area, preparations are advanced. 
Progress has been made on energy networks . The new 400 kV transmission line with 
Bulgaria entered into operation, improving the overall stabil ity of the electricity transmission 
network. Preparations for constr uction of a new 400 kV transmission line with Serbia have 
started. The transmission system operator subs cribed to the memorandum of understanding on 
establishment of a coordinated auction offi ce in the South-East Europe region. The 
government endorsed the concept of the Ener gy Community gas ring. A feasibility study was 
launched to identify priority ga s interconnections. In this ar ea the country is moderately 
advanced. 
No progress can be reported on telecommunications networks . The country is not yet a 
member of the ICT Policy Support Programme.  
Conclusion 
Progress was made in the area of trans-Euro pean networks. The count ry is continuing to 
participate actively in the South- East Europe Transport Observat ory. Preparations in this area 
are advanced. 
4.22. Chapter 22: Regional Policy and Coordi nation of Structural Instruments 
Limited progress has been made with the legislative framework . The eight statistical regions 
became planning regions. Decisions were adopted on the classification of planning regions for 
2008-2012 and on determining the level of devel opment of planning regions, i.e. the socio-
economic, demographic and development indexes which will have an impact on the future 
European territorial cooperation objective. In this  area, preparations are moderately advanced.  
There has been good, but uneven, progress in the institutional framework . The national 
authorities have submitted the accreditation package for the operational programmes under the IPA regional development component ( III) and the human resources development 
component (IV). In July 2009, conferral of management powers was granted under the 
Regional Development Operational Programme. However, the coordination capacity of the 
National Development Council is still weak. Pr eparations for establishing systems for 
implementation of the future Structural and Cohesion Funds have not yet been initiated. 
Preparations in this ar ea are slowly advancing. 
There has been good, but uneven, progress with administrative capacity . The administrative 
capacity of the line ministries to manage EU pre-accession programmes, i.e. of IPA units and 
monitoring and evaluation units, has been further strengthened. However, in order to be able 
EN 57   EN to absorb IPA funds, substantial further streng thening of administrative capacity is needed. 
Preparations in this area  are slowly advancing.  
Little progress has been made with programming . Administrative capacity for programming 
and project preparation remains insufficient. Furt her substantial efforts are needed to build up 
a pipeline of quality and mature projects under IPA. Preparations for programming under the 
future Structural and Cohesion Fund s have not been initiated yet. Preparations in this area are 
advancing.  
There has been progress on monitoring and evaluation . Sectoral committees to monitor 
implementation of the IPA operational prog rammes meet regularly, twice a year. The 
administrative capacity of the monitoring and eval uation units in the line  ministries, in terms 
of both number of staff and their training, has improved, but not sufficiently. Preparations in 
this area are moderately advanced.  
Some progress can also be reported in the area of financial management and control. The 
administrative capacity, in terms of the nece ssary staff and training, has improved, but not 
sufficiently. Preparations for establishment of financial management and control systems for 
the future Structural and Cohe sion Funds have not yet started.  Preparations in this area are 
advancing.  
Conclusion 
Some progress can be reported in  the area of regional policy and coordination of structural  
instruments, notably in the form  of enhanced efforts and prep arations for implementation of 
the components of IPA serving as pre-cursors to the Structural Funds . Administrative capacity 
needs to be substantially strengthened and a solid pipeline of quality and mature projects needs to be built up under IPA in view to secure absorption of EU funding in the short and 
longer term. Overall, alignment with the acquis in the area of regional policy and coordination 
of structural instruments is advancing. 
4.23. Chapter 23: Judiciary a nd fundamental rights 
There has been some progress in the area of the judiciary. 
The Judicial Council and the Council of Pub lic Prosecutors have st riven to ensure the 
independence of the judiciary. By mid-July the J udicial Council had completed the first 
appraisal of the performance of serving judges and f ound that most of them have been up to 
the standards.  
The Council of Public Prosecuto rs assumed full responsibili ty for appointing new public 
prosecutors and extending the term  of office of prosecutors a ppointed in 2003 for a six-year 
period, which was about to expire. Since October 2008 a total of 38 new judges were 
recruited, as well as 4 new presidents of c ourts and 21 new public prosecutors had been 
recruited and the term of office of 159 public prosecutors had been extended. The most recent 
appointments by the two councils include also th e graduates of the first generation of the 
Academy for training of judges and prosecutors.  
The Judicial Council continued to  combat corruption and ensure impartiality,  dismissing  12 
judges for abuse of office. However, some docum ented irregularities regarding recent judicial 
proceedings have raised questions about the in dependence and impartial ity of parts of the 
judiciary. 
EN 58   EN As regards professionalism and competence , the first 27 students of the Academy for Training 
of Judges and Prosecutors (ATJP) graduated. The ATJP provided continuous training, with 
over 200 events. By July the Judicial Council and the Council of Public Prosecutors had 
appointed 23 of the graduates from the academy.  
Efforts were made to improve the efficiency of the judiciary. The budget for the Public 
Prosecutor’s Office was again increased to  €4.5 million. The budget of the courts was 
increased by 8%, despite the difficult economic c ontext. The part of the budget of the ATJP 
funded by foreign donors decreased to 16.5% tha nks to an increase in State budget funding. 
The increase in the budget was used to recru it extra staff and purchas e new equipment. The 
President of the Judicial Council assumed the chairmanship of the Court Budget Council and 
a new method for use of the court budget is being implemented. 
The Council of Judicial Admi nistration was set up to follow implementation of the 2008 Law 
on Judicial Administration and improve human  resources management. The number of 
employees in the judicial admini stration increased and 82% of them received a salary increase 
of 20%. The IT centre connecting all judicial institutions and allowing regular exchanges of 
information between them and with the public is operational. The IT offices in the courts were 
staffed with 38 experts. All courts have opera tional websites and some have already started 
publishing their decisions. In 2009, personal computers for the courts for the Public 
Prosecutor’s Offices were purchased with Stat e funds. The automated court case management 
system (ACCMIS) has been installed in all cour ts. In 14 basic courts all current cases have 
been transferred to this system, which allows automated generation of reliable statistics on 
courts. 
In 2008 the courts received 12.3%  fewer cases than in 2007. Th e Public Prosecutor’s Office 
received 5% more cases than  in 2007. Of the 27 basic cour ts, 26 managed to reduce their 
combined backlog by 16%. The number of cases resolved within six months also increased 
somewhat. In the first quarte r of 2009 the misdemeanour commissions resolved 68.3% of new 
cases.  
Since they were established last year the Cour t of Appeal in Gostivar has settled over 4,500 
cases and the Administrative C ourt over 7,000. Initial analysis  of key aspects of their 
operations has started. The new Higher Public Prosecutor’s Office in Gostivar, which now 
consists of five public prosecutors, including th e head of the office, has started processing 
cases. 
However, the absence of a human resources  management system has slowed down the 
recruitment of graduates from the ATJP into th e judiciary. The Skopje 2 basic court, which is 
the court with the largest numbe r of cases, and the four courts of ap peal along with the 
Administrative Court were unable to reduce th eir backlogs. The Administrative Court, the 
Court of Appeal in Gostivar and most of the Public Prosecutor’s Offices need further 
strengthening in order to build up their capac ity. A number of courts continue to face 
budgetary restrictions. Implementation of the 2006 Law on Mediation has had a limited 
impact, with 77 measures taken so far. Full implementation of the 2007 Law on Public 
Prosecutor’s Offices requires parallel changes to the Law on Criminal Procedure to allow prosecutors to coordinate fully the investigative phase.  
Overall, some progress has been made on im plementation of the 2004 strategy for judicial 
reform, a key priority of th e Accession Partnership. Further progress was made towards 
establishing the independence of the judiciary, although con tinued efforts are needed. The 
EN 59   EN new posts and new IT equipment helped to ma ke the judiciary somewhat more efficient. 
However, a number of courts continue to fa ce budgetary restrictions . A track record on 
implementation of the legislation on the cour t system and procedures is gradually being 
established.  
(See also 2.1. Democracy and the rule of law) 
Good progress can be reported in the area of anti-corruption policy . The Electoral Code was 
amended to clarify the rules on financing election campaigns, the transparency of election 
funds, including for election ad vertising, and registration of donations. The Law on Managing 
Confiscated Property and Items Seized in Cr iminal and Misdemeanour Proceedings entered 
into force. 
The amendments to the Law on Financing of Po litical Parties were adopted in July. They  
enhance the transparency of donations, strengthe n the provisions against illegal donations, 
tighten reporting obligations of the political parties and intro duce more dissuasive sanctions.  
Amendments to the Criminal Code including new provisions on extended confiscation of 
proceeds of crime, illicit enrichment and crim inal liability of legal persons for trading 
influence were enacted.  
Amendments to the law on conflict of intere st were enacted. The amendments introduce a 
new definition of the scope of the law, expressly including civil servants; strengthen the 
powers of the SCPC for control and prevention of conflict of interest; introduce the obligation 
of the officials to submit a conflict of inte rest declaration and pr ovide for misdemeanour 
sanctions for non-observance of the law. 
The supervisory authorities, the Public Revenu e Office and the State Audit Office, have an 
important role to play in ensuring full implementation. 
The unit specialising in cases of organised cr ime and corruption within the General Public 
Prosecutor’s Office became a Basic Prosecutor’s Office. 
There were further indictments and convictions in high-profile  cases. The reforms in the 
healthcare system started to produce results in  addressing small-scale corruption and steps 
were taken to tackle larger-s cale corruption in hospitals.  
The databases of the State Commission for Prev ention of Corruption (SCPC) and the Public 
Revenue Office (PRO) were  interconnected. This allows mo re accurate records of asset 
declarations to be compiled. In 2008 the SC PC initiated 45 misdemeanour procedures for 
failure to submit asset declarati ons. In one of these cases a fine  was imposed, in two others the 
charges were dismissed and the rest are pend ing. The PRO started 48 procedures in 2008 to 
check the origin of assets declared. In nine cases a decision was given. Four of these cases 
were concluded by taxing the unj ustified income at 70% and in two cases criminal charges 
were brought. The customs administration took ove r responsibility for registering and keeping 
records of asset declarations by customs officers. Cases that ra ise reasonable doubts about the 
origin of the assets are referred to the PRO. 
Interception of communications, an  effective tool for detection and investigation of corruption 
cases, was introduced in 2009 a nd is starting to be used. 
EN 60   EN The SCPC began to implement the action plan  on conflict of interest. Guidelines were 
developed to help officials and the general pu blic identify potential conflicts of interest. 
Training was organised for judge s and prosecutors on the content of the guidelines. Since 
2008, 73 cases on conflict of interest were initiated and 43 were completed. In 11 of them a conflict of interest was found. Training also st arted on freezing and confiscation of proceeds 
of crime and on the criminal liability of legal persons. 
The SCPC adopted a strategic pl an on public relations which out lined action to be taken to 
improve communication with the public and the media, including appointment of a 
spokesperson. The SCPC took steps to e nhance cooperation w ith other bodies. 
Cooperation between law enforcement agenci es was further strengthened. Three more 
institutions (the State Elector al Commission, the Council of Pub lic Prosecutors and the State 
Appeals Commission for Public Procurement)  signed the anti-co rruption cooperation 
protocol, bringing the total number of signatories to 15. The signatories analysed the results of 
the first year of implementation of the pr otocol and decided on improvements. Further 
progress was made towards setting up a national intelligence database.  
The police and customs hotlines are fully operational. Disciplinary measures continued to be 
applied to a steady number of customs and poli ce officers for corrupt behaviour. The customs 
administration implemented measures to pr event and suppress corruption among customs 
officers. In 2008 the sector for internal contro l in the Ministry of the Interior brought 67 
criminal charges against 75 police officers for a total of 70 criminal acts, of which 61 showed 
elements of corrupt behaviour. Training on the police code of ethics continued.  
The State Appeals Commission for P ublic Procurement is operational (See also Chapter 5), 
thus providing a channel for addressing allegations of  corruption in this field. The Agency for 
Managing Confiscation of Assets was set up. Public  awareness of the right to access to public 
information has increased. 
However, widespread corruption remains a cause  for concern. Further efforts are needed to 
streamline the legal framework. The Law on Conf licts of Interest st ill has some loopholes, 
especially as regards its scope and the effec tiveness of the control mechanism. The OECD 
Convention on Combating Bribery of Foreign Public Officials has not been signed. A 
regulatory framework laying down the status and ethical princi ples applicable to public 
officials other than civil servants is not in pl ace. No reports on suspicions of corruption were 
filed by civil servants. 
The legislation on financing of political pa rties and election campaigns remains to be 
effectively implemented. In particular, the re ports and recommendations from the State Audit 
Office and the SCPC have not been followed up. So far, no sanctions have been reported for 
political parties which breached the rules on fi nancing, notably as regards submission of 
financial reports, the thres hold for election campaign expe nditure and registration of 
donations. Since 2005 the SCPC has referred ten notificatio ns to the public prosecutor 
concerning expenditure in electoral campaigns. To date there have b een no prosecutions. The 
GRECO recommendations regardin g guidelines for MPs when d eciding on requests for lifting 
immunity have not yet been implemented. 
A consistent track record on checking asset de clarations has not yet been established. The 
anti-corruption structures, not ably the Basic Prosecutor’s Of fice for combating organised 
crime and corruption, the Higher Prosecutor’s Offi ces and the anti-corr uption unit within the 
EN 61   EN Ministry of the Interior, need  to be reinforced. Joint trai ning of prosecutors and judges, 
including judges of the Suprem e Court, on investigative meas ures and administration of 
evidence for cases of corruption and orga nised crime needs to be intensified. 
The SCPC needs to make further efforts to ensu re its visibility and raise the level of public 
trust in its independence and impartiality. It s till has fully to address its remaining backlog 
and to reduce the duration of internal procedures. 
An exercise should be conducted to identify the extent and nature of corruption in the public 
sector to help define practical measures to combat corrupt ion in specific sectors. Statistics 
relevant to anti-corruption policy need to be further developed.  
Overall, good progress was made on implementi ng anti-corruption policy. The electoral code, 
the law on financing of political parties and th e law on conflict of inte rest were amended to 
strengthen transparency and ne w provisions on illicit enrichment  were introduced. There were 
further indictments and convictions in high  level cases and coop eration between law 
enforcement agencies improved. Nevertheless, co rruption remains prevalent and continues to 
be a serious problem in many areas. Continued e fforts are needed, in particular as regards 
implementation of the legal framework.  
(See also 2.1. Democracy and the rule of law) 
Some progress has been made in the area of fundamental rights . (See also under Political 
criteria and Chapter 19: Soc ial policy and employment. )  
In 2008 the Ombudsman’s Office re ceived 3,022 complaints, almost  the same number as in 
2007. Violations were found in less than a qua rter. The largest number concerned property 
rights, which accounted for 24.9% of all violations, followed by 8.7% for the Ministry of the 
Interior, particularly in connection with obtai ning citizenship, 8.2% fo r social rights and 2.5% 
for prisons. There were 21 complaints about viol ation of the right to equitable representation, 
compared with six in 2007. In response to  the intervention of the Ombudsman, the 
administrative bodies took appropriate  steps in 84.4% of the cases.  
As regards the prohibition of torture and inhuman or degrading treatment or punishment , the 
Ombudsman’s mail-box system installed in prisons proved effective. Some progress was made on long-term planning to improve prison faci lities. Inhuman and degrading conditions 
in prisons have not been addressed. Allegation s of ill-treatment are still not sufficiently 
investigated and prosecuted. The Council of  Europe’s Committee for the Prevention of 
Torture reiterated its deep concern about delete rious conditions and unsat isfactory healthcare 
in some prisons.  
With regard to respect for private and family life,  in particular the right to the protection of 
personal data, the directorate for personal data protection continued to perform satisfactorily 
but was still understaffed.  
Little progress can be re ported in the field of freedom of thought, conscience and religion. 
The 2008 Law on the Legal Status of Church es, Religious Communities and Religious 
Groups is being implemented slowly. Registrati on of the Bektashi relig ious group is still 
pending, as are applications from six ot her religious communities or groups.  
With regard to freedom of expression, including fr eedom and pluralism of the media , the legal 
framework is satisfactory, but the parts relating to the financial autonomy of the public 
EN 62   EN broadcaster and the regulatory body are not be ing implemented. Ownership of the printed 
media is still highly concentr ated. The broadcast media are st ill closely associated with 
political and business interests, which makes them subject to political influence (See also 
Chapter 10) .  
In the area of freedom of assembly and association, in cluding the right to  form political 
parties and the right to establish trade unions , two new trade unions we re registered (the 
independent trade union of local self-gove rnment employees and the trade union of 
employees in the public administration and in th e State bodies), thus raising the number of 
registered trade unions to 44.  
While some progress was made on treatment of socially vu lnerable and disabled people , little 
was made on the principle of  non-discrimination. Implementation of the 2008-2018 strategy 
for de-institutionalisation began. However, the Framework Law on Anti-Discrimination was 
not enacted.  
With respect to the right to education , the introduction of nine y ears of primary education and 
compulsory secondary education led to incr eased enrolment. The new centre for adult 
education was established. The education budget was increased, but remained insufficient.  
The right to property is protected, but the process of restitution of property confiscated during 
the Yugoslav regime has been ongoing since 2000. Processing of 25,288 out of a total of 
30,744 applications has been completed, of wh ich 8,785 in 2008. No progress was made with 
returning properties to the Or thodox Church and the Muslim  community. The government 
established a committee to coordinate the proce ss of restitution, chaired by the Minister of 
Finance, but it has not contri buted significantly to advancing the process. The Ombudsman’s 
Office noted that the procedures for restituti on of property had been delayed and that there 
were cases where the same people decided in both the first and the second instance commissions.  
Very limited progress can be reported in the field of gender equality and women’s rights. The 
national action plan for gender equality lack s coherence. Implementation of the national 
strategy against domestic violence (2008-2011) is  hindered by lack of coordination between 
the relevant institutions.  
Implementation of the national action plan for the protection of the rights of the child remains 
slow. Nothing has been done to improve access to  education, healthcare and juvenile justice 
for children from deprived backgrounds.  
As regards liberty and security and the right to a fair trial , the system for witness protection 
was brought up to international st andards, though some shortcomi ngs persist in logistics and 
funding. No progress was made in the area of legal aid in civil cases.  
Some progress was made on minority rights a nd cultural rights . There has been progress 
towards implementing the Law on Use of Language s spoken by at least 20% of the citizens 
and the strategy for equitable representation in the public ad ministration. However, the 
smaller communities remain at a disadvantag e. Dialogue and confidence-building between 
communities at local level were further hinde red by the introduction of  ethnically divided 
shifts in schools. A broad consensus on the La w on the Use of Flags of the Communities has 
not emerged. Measures to improve the social in clusion of the Roma have yielded only limited 
results. The country is moderately adva nced in the area of fundamental rights. 
EN 63   EN Conclusion 
There has been good progress on combating corr uption and some progress on the reform of 
the judiciary and on safeguarding fundamental rights. The newly established institutions and 
increased budgetary resources have improved th e overall efficiency of the judiciary, but 
continued efforts are needed to secure inde pendence. As regards an ti-corruption, further 
progress can be reported on prosecuting high-level cases, on strengthening the institutional framework and on cooperation between law enfor cement agencies. The electoral code, law on 
financing of political parties and the law on co nflict of interest were amended to strengthen 
transparency and new provisions on illicit enrichment were intr oduced. Nonetheless, 
corruption remains prevalent and continues to be a serious pr oblem in many areas. Most of 
the legislative and policy measures relating to fundamental rights are in place, but 
implementation is uneven and further efforts are required.  
4.24. Chapter 24: Justice, Freedom and Security 
Significant progress was made on visa policy . In the framework of the visa liberalisation 
dialogue opened between the EU and the former Yugoslav  Republic of Macedonia in 
February 2008, the country has made important progress in the JLS areas and fulfilled the roadmap benchmarks, allowing the Commission to  include the former Yugoslav Republic of 
Macedonia in its proposal of July 2009 for visa free travel. Concerning document security, the 
issuance of new biometric passports in line with community and international security 
standards continued on schedule, as did the issuance of the new identity cards and residence permits. As  of September 2009, more than 531.000 biom etric travel documents had been 
issued. 
The visa facilitation and readmission agreements between the former Yugoslav Republic of 
Macedonia and the European Community continue d to be implemented. The country has not 
yet fully aligned its legislation with the EU nega tive list in the interest of a regional approach, 
it maintains a visa-free regime for citi zens of some countries of the region. 
The administrative capacity of the department  for consular affairs has been further 
strengthened. Shortcomings still remain in th e field of human and bu dgetary resources. The 
national visa system became fully operational.  Rules on unilateral recognition of Schengen 
visas and residence permits were introduced, in order to facilitate the movement of third 
countries nationals and to stop the issuance of visa s at the borders In this  area, the country is 
well advanced. 
Some progress was made in the area of migration . Parliament adopted a resolution on 
migration policy, which set out the principles for an active return policy. Implementation of  the 
migration policy, including an ac tive return policy, ha s been ensured. The Law on Aliens was 
amended to remove the requirement for EU citizens to possess travel insurance when entering 
the country. At the end of 2008 Albania, Bosnia and Herzegovi na, Croatia, Montenegro, the 
former Yugoslav Republic of Macedonia and Serbia signed a memora ndum of understanding 
on setting up a system for sharing statistical da ta on illegal migration and participating in the 
regional system of advance notification. 
The Law on Employment of Foreigners was im plemented. All the implementing legislation 
on migration was adopted. In all, the country ha s ratified six readmission agreements with non-
EU-Member States: Albania, Bosnia-Her zegovina, Croatia, Moldova, Norway and 
Switzerland. The readmission agreement with th e Community worked well. In the first six 
EN 64   EN months of 2008, 269 people were received in acco rdance with the readmission agreement and 
bilateral agreements. The admission procedure, chiefly for short stays, is satisfactory. A 
central database of foreigners residing temporar ily in the country is being prepared. Further 
efforts are needed to improve the data coll ection system. The policy for reintegration of 
returnees is not being fully im plemented. Resources to recrui t new staff, notably in the 
Ministry of Labour and Social Policy, and to procure proper e quipment are still lacking. In 
this area, the country is well advanced. 
There has been good progress in the area of asylum . Amendments to the Law on Asylum and 
Temporary Protection were adopted, but the law is still not fully aligned with the acquis. The 
provisions concerning s ubsidiary protection were applied. Th e administrative court, which has 
jurisdiction over refugee cases pr eviously handled by the Suprem e Court, is operational, but 
there are some shortcomings in its decision-making, notably in appeal cases (See also 
Political criteria - Judiciary and Chapter 23). The administrative court needs to be given 
powers by law to conduct independent judicial re view of the substance of asylum decisions. 
Further efforts are required by the authorities to take on full responsibility for providing 
financial and material assistance for refugees and asylum-seekers. The administrative capacity 
has improved. Identity documents have started to  be issued, though at a slow pace. However, 
asylum procedures are still not fully in line wi th European standards. A central database for 
aliens, covering asylum, migration and visas, will have to be developed. In this area the 
country is advanced. 
Good progress can be reported in the field of external borders and Schengen . A working 
arrangement with FRONTEX was signed. Im plementation of the integrated border 
management strategy and action plan has been completed, except for the construction and reconstruction of police stations and the exte nsion of the TETRA radio communication system. 
However, an overall system for strategic and opera tional risk analysis is still lacking, and thus 
preventing effective fight against illegal migr ation. The border demarcation process with 
Kosovo has not yet been fully completed. In or der to find a solution for the border villages on 
the last stretch to be demarcated, the gove rnment decided in August 2009 to increase the 
flexibility margin in a new b ilateral border agreement with Kosovo. A new action plan on the 
Schengen acquis for the period 2009-2011 was adopted in September 2009. 19 border 
crossing points were connected to the data co mmunication network of the Ministry of the 
Interior and now have access to the database . Yet police stations responsible for border 
surveillance still have no access to the database. The National C oordination Centre for Border 
Management is fully operational. The division of tasks between the coordination centre and 
the field offices was fine-tuned, notably with  the aid of training and adoption of an 
operational manual and works well in practice. A human resources management strategy was 
adopted which encompasses all the organisationa l units of the police, but without dealing 
specifically with the needs of border police. The capacity of the training centre has been 
enhanced and the basic training curricula are sa tisfactory, but curricula also need to be 
developed for middle- and higher-level border poli ce officers. A central database of false and 
genuine documents is not available, nor is a central database of specimen documents. First 
steps were taken to rehabilitate  premises and offices at border  crossing points. However, the 
situation is not yet fully sati sfactory. A budget was allocated to  upgrade the equipment of the 
border police, but it is still not sufficient, notably for border surveillance at night hours at the green border. Technical equipment for documen t analysis, training on how to use it and 
budgetary support are still not adequate. Preparations in the area of external borders and Schengen are advanced. 
EN 65   EN Good progress can be reported on judicial cooperation in civil and criminal matters . The 
cooperation agreement with Eurojust was si gned in November 2008. The Law on Ratification 
of the Agreement was enacted in April 2009. The second Additional Protocol to the European Convention on Mutual Assistance in Criminal  Matters was ratified. The Convention of 29 
May 1993 on Protection of Children and Cooperatio n in respect of Inte rcountry Adoption was 
ratified. The Convention of 18 May 1970 on the Taking of Evidence Abroad in Civil or Commercial Matters was ratified. The Add itional Protocol to the Convention for the 
protection of individuals with regard to au tomatic processing of personal data regarding 
supervisory authorities and trans border data flow was ratified. In  this area, the preparations 
are starting. 
Progress has been good in the area of police cooperation and the fight against organised 
crime . The police was further decentralised  (see also the section on the Political Criteria).  
Training and equipment needs were met, ma inly by local authorit ies. Cooperation with 
EUROPOL further improved and preparations are being made to sign an operational 
agreement. The sector for special investigativ e techniques of the de partment for organised 
crime in the Ministry of the In terior was staffed and equipped. 
The human resources management system im proved. A merit-based ca reer and appraisal 
system and provisions aimed at depoliticisation of Ministry of the Interior officials, including 
senior police officers, was intr oduced by the new Law on Internal Affairs enacted in July. The 
training system improved, notably for basic and specialised training. Shortcomings remain in 
the in-service training and in development of curricula for mid-level officers. The Training 
Centre, the successor of the Police Academy, or ganised regional training and training for a 
new generation of police cadets. Its mission wa s revised by an amendment to the Law on 
Internal Affairs and is now confin ed to basic and continuous training. 
The Interpol office became operational 24 hours a day, seven days a week. All border 
crossing points and the four regional headquarter s of the border police were connected to the 
Interpol databases. The number of international arrest warrants issued and executed increased. 
Witness protection capacity improved . In 2008, the witness pr otection programme was 
activated in one case. Some shortcomings in logistics and funding remain. Improvements 
were made to protection of victims.  International agreements to relocate witness as well as 
victims outside of the country are in place. In this area, preparations are advanced. 
The country meets EU and interna tional standards in the area of explosives. As regards small 
arms and light weapons, 166 perpetrators were reported, a small decrease compared to the 243 
perpetrators during the previous  reporting period. Improvements were made to enforcement of 
the regulations on private possession of arms . The number of illegal weapons seized and 
destroyed remained stable. The level of il licit arms possession is still alarmingly high. 
Significant further efforts are needed in this area. 
The Council of Europe Convention against Traffi cking in Human Beings was ratified in April 
2009. Further legislative measures will be requir ed to ensure effective implementation. The 
strategy and action plan to combat human tra fficking were largely implemented. A new action 
plan, covering the period 2009-2013, remains to be adopted. Compulsory confiscation of 
assets belonging to perpetrators of criminal acts related to human trafficking was introduced 
into the Criminal Code. The law on social protection which provides institutional protection for the victims of human trafficking was enact ed. Cooperation between the police, the public 
prosecutors and the courts further improve d. In 2008, 25 people were prosecuted, of whom 
EN 66   EN nine for trafficking in minors.  Of the 25 people prosecuted, 16 were sentenced to between 
three and eight years in prison. In 2008, 160 pe ople were prosecuted for smuggling illegal 
migrants, up from 91 in 2007. Improvemen ts were made to the budget planning. 
Improvements were made in the fight against computer crime. The Council of Europe 
Convention on Cybercrime is being implemente d. The relevant unit of the Organised Crime 
Department has seven officers out of the twelve  authorised. Improvements were made to the 
investigative capacity to fight credit card a buse. Capacity to combat child pornography and 
hacking is still low, especia lly on the ground. Shortcomings rema in in equipment, notably in 
the field. The number of investigations carried out improved, as did their quality. 
The weaknesses in parliamentary control ov er the security and counter-intelligence 
administration have been addressed. Deficiencies  in judicial control over the security and 
counter-intelligence administration with rega rd to executing the orders of the public 
prosecutor to monitor communications, notably concerning the location of the relevant 
equipment, have been addressed. The Law on Monitoring of Co mmunications is being 
implemented smoothly, although the relevant pa rliamentary committee has not been very 
active. Work on establishing an integrated intelligence system  for inter-agency use is in 
progress. This should remedy the existing shortc omings in sharing intelligence and in mutual 
access to databases at interagency level. The sixth action-oriented measure for the fight 
against organised crime has not b een implemented yet. The sector for criminal analysis in the 
Organised Crime Department does not yet act as  the national cooperation centre, because no 
common database has been established. Despite considerable challenges in the area of police cooperation and the fight against organised crime, the country is advanced and is a front-
runner in the region. 
Good progress can be reported in the fight against terrorism . A strategy for prevention of 
money-laundering and financi ng of terrorism was adopted. Implementing legislation and 
administrative instructions were adopte d. The 2005 Council of Europe Convention on 
Laundering, Search, Seizure and Confiscation of  the Proceeds from Crime and the Financing 
of Terrorism was ratified.  In 2008, 134 suspicious transactions  were referred to the Anti-
Money Laundering Office. The number is still low. Gaps in the criminalisation of terrorism offences, especially in the fiel d of financing, have been addre ssed. Preparations in this area 
are well advanced. 
Good progress can be reported in the fight against drugs . The Law on Chemicals was 
enacted and the Law on Precursors was ame nded with the aim of  aligning with the acquis. 
The Law on Narcotics was enacted and its im plementing legislation adopted. A new action 
plan, covering the period 2008-2012, was adopted. It is in line with the EU drugs strategy for 
2005-2012. Data on drug seizures in 2008 showed a stab le trend in terms of quantity. Overall, 
the amount of drugs seized remained rather low. National, regional and international 
cooperation has reached internat ional standards. The country  already largely meets the acquis 
requirements. 
Good progress has been ma de in the area of customs cooperation . A law was enacted which 
ratified the amendments to the Convention es tablishing a Customs Cooperation Council of the 
European Union, enabling the European Commun ity to become a full member of the World 
Customs Organisation (WCO). Cooperation with the SECI was enhanced. The customs 
administration participated in five major international operations coordinated by the SECI and the WCO and exchanged informa tion on seizures and intelligence information via the SECFs 
Regional Centre for Combating Transborder Cr ime. Customs officers participated in a 
EN 67   EN number of working meetings a nd trainings. Efforts were steppe d up to cooperate  effectively 
with the Regional Intelligence Liaison Offices within the World Cust oms Organisation, to 
which 195 cases of seizure of counterfeit goods, fo reign currency, illegal drugs and cigarettes 
were reported. Cooperati on with the Balkan Info system of the German Customs Criminal 
Office was intensified. As a result, the customs administration received and checked 128 reports on possible drug tra fficking. Preparations in this area are on track. 
(For counterfeiting of the euro see chapter 32.) 
Conclusion 
In all policy fields in the area of justice, fr eedom and security, important reforms have been 
undertaken toward meeting the benchmarks set in the framework of th e visa liberalisation 
dialogue, which has been completed in May 2009. Significant progress was made on visa 
policy. Good progress can be re ported on asylum, the fight agai nst organised crime and drugs, 
as well as on external borders and Schengen. Administrative capacity to implement the police 
reform has improved, but is still constrained by the not fully developed human resources 
management. The country has achieved a greater degree of alignment with the acquis for both 
its legislative and administrative capacity. E fforts are being made to improve further 
international police cooperation at both regiona l and European Union levels, chiefly with 
Europol and Frontex. Overall, prepar ations in this area are on track. 
4.25. Chapter 25: Science and Research 
Little progress can be reported in the area of research policy , in particular as regards the 
strategy to increase the national research capacity. The budget for the 2009 research and technological development programme, originally €2.45 m illion, was reduced to about €1.8 
million when the budget was revised in April 2009. The public and private funding for science and research remained below 0.5% of  GDP and private-sector participation in 
particular is very low. Some reform of the research institutes took place by integrating them 
into the universities. New e quipment procured in September 2009 will strengthen the capacity 
of universities and research in stitutes. However, the small budget, weak administrative 
capacity and lack of funding for the research facilities hinder si gnificantly the development or 
research capacity in the country. Preparations  in this area are moderately advanced.  
Good progress was achiev ed in the area of Framework Programmes . The number of 
projects selected and funded under the Sevent h EC research framework programme (FP7) 
increased compared to last year. However, the capacity of the unit responsible for promotion 
and national coordination of FP7 within the Mini stry of Education and Science is weak and 
prevents to engage in more promotion activ ities on FP7. In this area, preparations are 
advanced. 
Given the lack of a national res earch strategy and weak administ rative capacity, little progress 
can be reported on the integration into the European Research Area . The Agency for 
European Educational Programmes and Mobility, designated as the main body 
responsible for establishing the national EURA XESS Jobs Portal, as well as the EURAXESS 
Services Network, have not be re alised within the contractual time frame. Preparations in this 
area are moderately advanced. 
Conclusion 
EN 68   EN Some progress has been made in the area of sc ience and research. Administrative capacity to 
support participation in the Framework Progra mmes is not sufficiently developed. Greater 
participation in the Framework Programmes is also hampered by the weak capacity of the 
research institutes and their poor links with i ndustry. Overall, preparations in the area of 
science and research are on track. 
4.26. Chapter 26: Education and Culture 
Some progress can be re ported in the field of education, training and youth . The new Law 
on Higher Education entered into force. The new school system introduced nine years of primary education and compulsory secondary edu cation, which resulted in an increase in the 
number of pupils enrolled in  secondary schools. An action plan has been adopted for 
implementing the National Strategy for Youth. The centre for adult education was established. 
However, it is not yet operating adequate ly, and implementation of the Law on Adult 
Education has been delayed. The programme on compulsory vocational education has not yet 
been implemented. The 2009 budget for education is insufficient to implement the national 
strategy for reform in education for 2006-2015. Efforts need to con tinue to improve the 
country's performance in relation to the EU common education benchmarks of the Education 
and Training 2020 strategic framework, in particul ar to increase participation in pre-primary, 
reduce the high drop-out rate, ensure equitable access to higher education, increase the number of graduates and improve the quality  of teaching. Future challenges include 
strengthening life-long l earning and improving recogni tion of prior learning. 
Progress has been made by the National Agency for the European Educational Programmes to 
build its capacity as the implementing body fo r the Lifelong Learning and Youth in Action 
Programmes. Preparatory measures, including tr aining of the staff an d the launch of pilot 
projects, have started. The Nati onal Agency needs to continue its efforts to strengthen the 
competencies of its staff in all aspects of  programme management, and the Ministry of 
Education and Science needs to set up an e fficient control system providing adequate 
assurance on the functioning of the National Agen cy Preparations in the area of education, 
training and youth are moderately advanced. 
Some progress can be reporte d also in the field of culture . The country continued to 
participate in the Culture programme, and started to participate in the Europe for Citizens programme, on the basis of a Memorandum of Understanding signed in March 2009. 
Preparations in the area of cultu re meet the EU requirements. 
Conclusion 
Some progress has been made in the areas of  education, training, yo uth and culture, in 
particular as regards participation in Co mmunity programmes. However, the budget for 
education remains insufficient to implement the national reform strategy and further efforts are needed to improve the country's performa nce in relation to the Education and Training 
2020 common benchmarks, to prepare for the management of the Lifelong Learning and 
Youth in Action programmes and to set up an e fficient control system. Overall, preparations 
in the area of education and culture are advanced. 
4.27. Chapter 27: Environment 
Good progress was made in the area of horizontal legislation . Implementing legislation on 
environmental assessment and public particip ation was adopted. The national strategy and 
plan on protection and rescue were adopted. Th e administrative capacity for implementing the 
EN 69   EN Environmental Impact Assessment (EIA) a nd Strategic Environmental Assessment (SEA) 
Directives has improved, but is still not suffici ent, particularly at local level. The EIA 
requirements for public consultation are sti ll not adequately applied. The requirements 
relating to informing and consulting the public ne ed to be improved. Progress was made in the 
area of climate change, in particular on impl ementation of the clean development mechanism 
under the Kyoto Protocol. The Prot ection and Rescue Directorate was strengthened in terms of 
both staff and training. Preparations in this area are advanced. 
Some progress was made in the area of air quality . Transposition in this area is moderately 
advanced. The list of ambien t air quality zones and agglomerations was adopted. The 
inventory of air pollutant emissions is bein g compiled, in accordance with the CORINAIR 
methodology. The administrative cap acity is still weak, particular ly at local level. Further 
equipment is also needed. Cooperation between the ministries and institutions involved in air quality is still not sufficient, in particular on collection and analysis of  data. The air quality 
monitoring system is still not fully effective. Preparations in the area of air quality are 
moderately advanced. 
Some progress was made in the area of waste management . Amendments to the Waste 
Management Law were enacted, including provisions on sanctions and the level of fines for 
misdemeanours. The national waste management  plan was adopted. Ad ministrative capacity 
at central and local levels is still largely in sufficient. Municipal waste management systems 
have not been set up yet. Investment in this area needs to be increased. The waste management 
coordination committee has not been effective. A system to deal with data collection, 
registration and reporting is stil l not in place. Preparations in this area are moderately 
advanced. 
Little progress can be reported in the case of water quality . The transposition process needs 
to be stepped up. The administrative capacity to deal with integrated water management is 
very weak in terms of organi sational structure and number of  qualified staff. The current 
institutional set-up, involving many institutions, makes implementation of the new Water Law 
very difficult to coordinate. The water monitori ng system is still not fully effective. No 
progress was made towards applying the polluter-pa ys principle. This creates problems for the 
sustainability of projects in this sector. Signi ficant efforts are still needed in this area. 
Little progress was made on nature  protection.  Amendments to the Hunting Law were 
adopted. Efforts need to be continued in  order to align further with the EU acquis. Some 
progress can be reported on implementing the management plans for protected areas. A 
national strategy and ac tion plan for nature protection has still not been completed. The 
administrative capacity is insufficient and ad equate equipment is lacking. Overall, the 
coordination between the various  institutions responsible fo r nature protection is not 
sufficient. However, some efforts have been  made to develop coordination between the 
Ministry of the Environment and the customs administration on implementation of the CITES 
Convention. Preparations in this  area are moderately advanced. 
Little progress was made on industrial pollution cont rol and risk management . 
Transposition of the Seveso II Directive on control of ma jor accident hazards involving 
dangerous substances has progressed. The lack of administrative capacity in this area is a major issue, especially at local level. It results in substantial delays in issuing IPPC (integrated 
pollution prevention and control) permits. Trai ning for IPPC inspectors is still not provided. 
The stakeholders are not sufficien tly involved in this process. Th e operators of industrial sites 
have not yet prepared contingency plans. Signifi cant efforts need to be made in this area. 
EN 70   EN Little progress was made in the area of chemicals.  The EU acquis in this sector has still not 
been transposed. The staff of the national in formation centre was increased. Some training 
and awareness-raising activities for the institutions and companies concerned have started. Preparations in this area  are at an early stage.  
Little progress was made in the area of GMOs . Transposition of the EU acquis in this field 
has not yet been completed. The Nationa l Commission for GMO Management and the 
Scientific Committee for GMOs were establishe d. However, the administrative capacity needs 
to be further strengthened. The department resp onsible for risk assess ment of GMOs and for 
placing GMO products on the market  have still not been estab lished, nor have the necessary 
laboratories been installed. Preparations are moderately advanced in this area. 
Some progress was made in the area of noise . Implementing legislation was adopted. 
Preparation of strategic maps a nd action plans on noise began with development of a plan for 
noise measurement in Skopje. The administrativ e capacity is still not sufficient. The units 
responsible for dealing with noise  issues at central and local le vels have not been established 
yet. Preparations in this area are at an early stage. 
Some progress was made in the area of forestry . The priority measures  in the programme for 
expanded reproduction of forests ha ve started to be implemented. 
As regards administrative capacity , the government adopted a plan to strengthen the 
environmental management capacity at central  and local levels fo r the period 2009-2014. 
However, the lack of a financial assessme nt and of a mechanism for monitoring and 
evaluating the plan could hamper its implemen tation and sustainability. The administrative 
capacity for implementing and enforcing environmen tal legislation is still far from sufficient 
at both central and local levels. This is particul arly true of the inspectorates. The coordination 
between administrative bodi es responsible for environment-rela ted issues is not  yet effective. 
Enforcement of legislation has improved in terms of fines and sanctions, but the system is not 
yet efficient and no credible record has been  established. The environmental monitoring and 
information system is still not adequate. No  funds are foreseen in the 2009 budget for new 
environmental projects., The amount provided is still far from  sufficient to meet the needs. 
The national environmental investment stra tegy was adopted. Environmental protection 
requirements are still not well integrated into policy making and implementation in other areas. The precautionary principle, the princi ple of preventive action and the polluter-pays 
principle are only partially applied. 
Conclusion 
Progress has been made toward s further transposing the EU acquis in the field of the 
environment, in particular for horizontal legi slation and waste management. Some sectors, like 
water quality or IPPC, are still lagging behind.  Implementation of the legislation remains a 
considerable challenge. Administrative capacity  is weak at both natio nal and local levels. 
Significant further efforts are still needed to furthe r align with the EU acquis in this sector and, 
moreover, to ensure the required investments. Over all, preparations in the field of environment 
are moderately advanced.  
4.28. Chapter 28: Consumer and Health Protection 
Some progress has been made on consumer protection . As regards the 
horizontal aspects, 
the consumer protection programme for 2009-2010 was adopted. Instead of the Ministry of 
Economy, the State institutions involved are now required to finance from their own resources 
EN 71   EN the activities planned in the area of consumer protection . Four new regional consumer 
protection organisations were established, working under the umbrella organisation based in Skopje. Budgetary support for the consumer protection NGOs was increased, but is quite 
modest in comparison with the complex tasks th at consumer protection entails. The umbrella 
consumer protection NGO focused mainly on publicity campaigns, and less on taking up 
consumers' claims. Preparati ons in this area are ongoing. 
Some progress has been made as regards product-safety related issues . Legislation 
implementing the Law on Product Safety was adopted. Alignment with the acquis remains to 
be confirmed. Market surveillance remain s weak and does not ensure effective and 
transparent consumer protecti on. The administrative capac ity of the coordinating body for 
market surveillance is poor. The powers of th e various inspectorates have still not been 
clarified. The poor funding, understaffing and inade quate powers of the inspectors seriously 
limit the ability of the inspectorates to conduc t checks on products. Preparations in this area 
are on track. 
Some progress has been made with regard to non-safety-related issues, where implementation 
and enforcement of the consumer credit legislation have been ensured. The acquis on distance 
marketing of consumer financial services, on  injunctions and on unfai r commercial practices 
has not yet been transposed. Mediation is still used only to a limited extent. Preparations in this area are on track. 
There has been some progress in the area of public health . Regarding the horizontal aspects, 
a new Law on Health Data defined the genera l principles for coll ecting and processing 
comprehensive healthcare data. A new public health programme for rare diseases was 
introduced. Still, the funding for the public hea lth programmes remained the same as in 2008, 
except for the compulsory immunisation pr ogramme, which was increased fourfold. 
Implementation of public health programmes c ontinues to be hampered by the lack of a 
proper operational structure and adequate finance, which resu lts in some programmes being 
curtailed or suspended. The hospital sector still receives higher budgetary allocations than the 
public health and primary healthcare sectors.  Preparations in this area are on track. 
Some progress has been made in the area of tobacco  control , notably as regards tobacco 
advertising. Progress in the area of tobacco products has been less significant. The country 
signed a licensing agreement on use of  EU pictorial warnings on tobacco  products, which 
were introduced in September. Prep arations in this area are on track. 
Some progress can be reported in the field of communicable diseases . The outbreak of mumps 
at the beginning of 2009 revealed deficien cies in the immunisation programme against 
communicable diseases  in the mid-1990s. Consequently, emergency immunisation against 
mumps of the population aged be tween 14 and 21 was carried out. The European Centre for 
Disease Prevention and Control (ECDC) and the WHO provided support to contain the 
outbreak of mumps. Measures have  been taken to strengthen the IT system across the entire 
health sector, including the national early warning system (EWARN). There is still no 
comprehensive healthcare database . Preparations in this area are on track. 
Some progress can be reported in the area of blood . Implementing legislation on blood  safety 
was adopted. Alignment with the acquis 
remains to be confirmed. Proper implementation of 
the blood safety strategy is lagging behind. There were no developments to report in the area 
of human tissues and cells.  Preparations in this area are at an early stage. 
EN 72   EN Little progress was made with regard to mental health. Mental health instit utions continue to 
lack staff and financial resour ces. Institutional care for soci ally vulnerable and disabled 
people improved slightly. However, more effo rts and resources are required to improve 
community mental healthcare as an alternativ e to institutional care. A special focus on 
children and young people with mental health pr oblems, who require h ealthcare tailored to 
their needs, is also required. Preparati ons in this area are at an early stage. 
The national public health programmes continued to address the socio-economic determinants 
of health and health inequalities by providing funds for preventi on of health problems caused 
by unhealthy lifestyle and free tr eatment for uninsured patients . A strategy on promotion of 
adolescent health was adopted. Implementation of  the national strategy to  reduce harm caused 
by alcohol has been continuing, with an action plan focusing on young people. Financial 
resources for combating cancer are insufficient. There have been  no developments in the area 
of health and the environment.  Preparations in these areas are ongoing. 
Conclusion 
Some progress has been made in the area of consumer and health protection. As regards 
consumer policy, there is  still no effective and transparent market surveillan ce system. In the 
field of public health, the human and financial resources available are not yet sufficient to 
ensure proper implementation of legi slation, strategies and action plans. 
4.29. Chapter 29: Customs Union 
Some progress has been made on customs legislation . The 2009 customs tariff takes into 
account the obligations arising from the Stab ilisation and Association Agreement and the 
changes in the EU Combined Nomenclature. Th e protocol amending th e Kyoto International 
Convention on the Simplification and Harmonisa tion of Customs Proce dures was ratified. 
Legislation implementing the Customs Code, re gulating authorised economic operators, was 
adopted. A number of customs-related fees, in cluding the fees for customs escort of goods 
and for temporary customs warehous ing, were abolished. However, some fees that are not in 
line with the acquis remain in force. Some of the prov isions of the Law on Technological-
Industrial Development Zones are still not fully aligned with the acquis. Preparations in this 
area are advanced. 
Significant progress has been made on administrative and operational capacity . The 
strategy for training and professional adva ncement has been implemented. Employees 
benefited from a large number of training ac tivities, including training on ethics. Operational 
capacity was further enhanced, in particular for investigation a nd intelligence. Risk analysis 
and risk-based control systems and procedures  were introduced. The 'one-stop shop' system 
linking 16 State agencies came into  operation. It allows companies to submit electronically a 
single request in order to obtain all the documents required for import, export and transit. The customs administration still has to develop a comprehensive IT strategy to ensure future interconnectivity/interoperability with the Community IT customs systems. 
Efforts to combat corruption and cross-border cr ime and trade in counte rfeit goods led to an 
increased number of misdemeanour and cr iminal cases. The number of disciplinary 
proceedings and criminal charges initiated ag ainst customs officers also increased, although 
the sanctions, in particular dismissals, were generally not upheld at the appeal stage. The 
customs administration signed new memoranda of cooperation with trade and transport 
EN 73   EN associations and with State ag encies involved in the fight against crime and corruption. 
Preparations in this area are well on track. 
Conclusion 
Progress in this chapter has been substantial, in particular as regards administrative and 
operational capacity. The customs 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 is co ntinuing to improve. 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 and with the 
Stabilisation and Association Agreement (SAA)  with the EU. Customs duties were reduced 
for 498 products and entirely abolished for 2 86 more. The average customs duty on industrial 
products remained 7% and the duty on agricultu ral and fisheries products was reduced to 
15.98%. 
The country continued to coordinate closel y with the Commission a nd to align with EU 
policies and positions in international trade negotia tions. The protocol on rules of origin to the 
bilateral free-trade agre ement with Turkey was ratified. It is in line with the corresponding 
protocol to the SAA. The country has steppe d up preparations for negotiations with the 
countries participating in the Pan-Euro-Med iterranean system of cumulation of origin. 
There were no particular devel opments regarding export credits. 
The government adopted a decree establishing the new list of dual-use goods and 
technologies, which entirely transposes the list of dual-use goods a nd technologies in the 
relevant Council Regulation. The system for contro l of dual-use goods is not fully functional.  
In the area of bilateral agreements with third countries , the country ratifie d the investment 
agreement with India and the protocol amendi ng the investment agreement with Romania. 
The number of bilateral investment agreements ratified rose to 31, of which 28 are in force 
and 15 are with EU Member States. 
No progress can be reported in the areas of development policy  and humanitarian aid . 
Preparations in both these areas are not very advanced. 
Conclusion 
There has been some progress in the alignment with the EU's external relations policy. The 
institutional capacity and coordination between the relevant institutions is not yet sufficient to 
enable the country to participate fully in th e EU development and humanitarian aid policies. 
Overall, preparations in this area are on track. 
4.31. Chapter 31: Foreign, Security and Defence Policy 
The regular political dialogue  between the EU and the countr y continued to cover foreign 
policy issues. ( Concerning neighbourly relations with  other enlargement countries and 
Member States, see the section on Political criteria.)  
EN 74   EN As regards the common foreign and security policy  (CFSP), the country continued to align 
itself with EU common positions and statemen ts on third countries and regions. In the 
reporting period, the country aligned itself with all the relevant EU declarations and common 
positions, except in four cases related to Ethiopia, the USA, Israel and Nigeria. In particular, the country aligned itself with the EU declara tion on deployment of the European Union rule 
of law mission (EULEX) in Kosovo. The CFSP c oordination unit was st rengthened with one 
new recruit, bringing the total staff up to five. 
Implementation of restrictive measures is continuing. A working gr oup on CFSP issues led by 
the Ministry of Foreign Affairs is continuing to review the im plementation process. So far, 
implementation of the international restrictiv e measures has shown the need for further 
coordination between the competent authorities. 
With regard to non-proliferation, in December 2008 the former Yugoslav Republic of 
Macedonia signed the Convention on Cluster Munitions. The country issued its third national report on implementation of the EU Code of Conduct on Arms E xport and also the report on 
implementation of the UN Action Plan for the Prevention, Fight and Eradication of Illicit 
Trafficking of Light and Small Weapons. The National Commission for Small Firearms and 
Light Weapons is continuing its work. 
A special sector was established in the Ministry of the Interior to deal  with illegal trade in 
weapons, ammunition and explosive materials. As a result of its work, 300 persons were charged with related offences in 2008. The admini strative capacity of the unit for arms control 
in the Ministry of Foreign Affairs was strength ened with the recruitment of additional staff. 
The country continued to engage actively in cooperat ion with internationa l organisations (UN, 
OSCE, Council of Europe, etc.). ( As regards the International Criminal Court, see the section 
on Political criteria - Regional is sues and international obligations ). 
As regards security measures (classified information), the Certified Computer Unit for access 
to the EU network for electronic exchange of classified CFSP information (ACN) was 
installed. Staff and budgetary support were  allocated for satisfactory operation and 
maintenance of the electronic system. 
In the framework of the European Security and Defence Policy  (ESDP), the country 
showed continued commitment to participatio n in civil and military crisis management 
operations. The country withdrew its military fo rces from the EU-led EUFOR/Althéa military 
mission, but continued to participate with a me dical team, along with a preventive medicine 
non-commissioned officer and a legal advise r at EUFOR headquarters in Bosnia and 
Herzegovina. The country continued to partic ipate in the NATO mission in Afghanistan and 
in the UN-led peacekeeping mission in Leba non (UNIFIL). The country indicated its 
readiness to take part in EU battle group (E UBG) 11/2012 made up of military forces from 
Germany (lead nation), Austria, the Czech Republic, Ireland and Croatia. 
Conclusion 
There has been some progress in the area of foreign, s ecurity and defence policy, in particular 
in terms of strengthening the administrative capacity. The c ountry aligned with most EU 
declarations and common positions and has shown continued commitment to participation in ESDP operations. Continued effort s are needed to ensure progre ss in implementing restrictive 
measures and in ensuring non-proliferation. 
EN 75   EN 4.32. Chapter 32: Financial Control 
Some progress can be re ported in the area of public internal financial control  (PIFC). A 
revised Law on PIFC was adopted in July. Esta blishment of internal audit units in line 
ministries has been stepped up. However, 10 units at the local level have not yet been staffed. 
Adequate training schemes on internal audit are missing. The institutional capacity of the central harmonisation units (CHUs) in the Minist ry of Finance has been improved, but is not 
yet sufficient. The PIFC policy paper needs to d be amended to include a medium- to long-
term plan for development of PIFC and an action plan to ensure its full implementation. 
As regards external audit , the State Audit Office (SAO) u pdated its development strategy 
(2008-2012) and other key methodological guidelin es on audit quality and reporting. The 
operational capacity of the SAO has been improv ed, with the recruitment of 14 new auditors, 
but the coverage of public expenditure aud ited decreased in 2008 and remains insufficient. 
The SAO's functional and financial independe nce remains to be safeguarded, either 
constitutionally or by equivalent means. Coop eration with parliament  is still not fully 
satisfactory and adequate procedures for dealing with the SAO's reports and audit 
recommendations are still lacking. Preparations in the area of public internal financial control 
and external audit are on track. 
Some progress can be reported on protection of the EU 's financial interests . A 
memorandum of understanding on preventing, inves tigating and reporting on irregularities in 
implementation of IPA funds was signed between  the national author ising officer and the 
Anti-Fraud Coordination Service (AFCOS) within the financial police. Preparations in this 
area are on track. 
No progress can be reported in the fight against counterfeiting of the euro . Limited 
improvements were made in the national coop eration mechanism for reporting suspicious 
banknotes, as the National Bank issued instructions to all banks. In 2008, 380 banknotes were seized, up from 321 in 2007. Investigative capacity  is weak. Significant shortcomings remain 
in equipment, staffing and trai ning, notably for the National Bank. 
Conclusion 
Some progress has been made towards alig ning and implementing the legislation. The 
administrative capacity of the institutions resp onsible for financial control has been further 
strengthened. The SAO is not yet functionally and financially independent. Preparations in the 
area of protection of the EU's fi nancial interests are continuing. 
4.33. Chapter 33: Financial and Budgetary Provisions 
In the field of traditional own resources , revenue collection from customs and agricultural 
duties levied on imports has improved. The institutional capacity of the customs 
administration has been strengthened and anti- corruption measures have been stepped up. 
As regards VAT resources , the administrative capacity of the Public Revenue Office (PRO) 
has improved. Efforts were made to combat  customs duty and VAT fraud and thereby 
contribute to more efficient revenue collectio n. Internal audit and financial management 
control capacity has been strengthen ed, but is still insufficient.  
EN 76   EN In the case of GNI resources , some progress was made toward s producing more exhaustive 
national accounts and applying th e rules and definitions in EU  accounting standards. Little 
progress was made towards improving the estimates on the informal economy. 
Although the acquis in this area does not require transposition, esta blishment of appropriate 
administrative infrastructure  is important, 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. The number of Internal Audit Units in budget users has 
increased. However,  the capacity within the relevant authorities to apply the rules is not yet 
sufficient. 
Conclusion 
Some progress has been made towards aligning with the acquis in the areas of customs, 
statistics and financial control. Improvements were made to the operational capacity of the 
customs authority and the PRO, particul arly on combating customs and VAT fraud. 
Appropriate coordination structures and admi nistrative strengthening will be needed for 
implementation of the rules on own resources in due course. 
 
EN 77   EN STATISTICAL ANNEX  
STATISTICAL DATA (as of 14 September 2009)            
The former Yugoslav Republic of Macedonia            
            
Basic data Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
Population (thousand)  2 013 2 022 2 031 2 039 2 024b 2 030 2 035 2 039 2 042 2 045 
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 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
Gross domestic product (GDP) (million national currency)  209 010 236 389 233 841 243 970 251 486 265 257 286 619 310 915 354 322 : 
GDP (million euro)  3 448 3 893 3 839 4 001 4 105 4 325 4 676 5 081 5 791 : 
GDP (euro per capita)  1 713 1 926 1 890 1 963 2 029 2 130 2 298 2 491 2 834 : 
GDP (in Purchasing Power Standards (PPS)  per capita)  4 800.0 5 100.0 5 000.0 5 200.0 5 300.0 5 800.0 6 400.0 6 900.0 7 800.0 8  200,0 
SI: GDP (in PPS per capita, EU-27=100)  26.8 26.9 25.1 25.2 25.6 26.6 28.5 29.4 31.2 32.5 
SI: Growth rate of GDP (national currency, at constant prices, % change on previous year)  4.3 4.5 -4.5 0.9 2.8 4.1 4.1 4.0 5.9  : 
SI: Employment growth (national account s, % change on previous year)  -0.6 0.3 -1.7 -0.6 -1.9 -2.2 2.1 3.2 4.3 3.2 
Labour productivity growth: GDP growth per person employed (% change on previous year)  5.0 4.2 -2.9 1.4 4.8 6.4 2.0 0.8 1.5 1. 7 
SI: Unit labour cost growth (national accounts, % change on previous  year)  -1.5 -7.0 -0.8 -0.4 2.7 -9.9 -8.6 6.2 -12.9 1.0 
SI: Labour productivity (GDP in PPS per person employed, EU-27=100)  47.3 48.2 46.2 46.4 48.1 51.4 54.3 55.1 57.0 57.9 
Gross value added by main sectors (%)                      
Agriculture  12.9 12.0 11.8 12.4 13.4 13.2 12.8 12.6 11.0 : 
Industry  26.5 26.9 26.1 24.2 24.4 22.7 23.1 23.5 25.7 : 
Construction  6.1 6.8 6.0 6.0 6.3 6.5 6.6 6.7 7.0 : 
Services  54.5 54.2 56.1 57.5 56.0 57.7 57.6 57.3 56.4 : 
Final consumption expenditure, as a share of GDP (%)  90.3 92.6 94.8 99.5 97.0 98.9 96.5 96.7 94.6 : 
Gross fixed capital formation, as a share of GDP (%)  16.6 16.2 14.8 16.6 16.7 17.8 17.0 18.2 20.2 : 
Changes in inventories, as a share of GDP (%)  3.1 6.0 4.2 4.0 3.2 4.1 3.8 3.7 4.0 : 
Exports of goods and services, relative to GDP (%)  42.2 48.6 42.7 38.0 37.9 41.1 45.5 48.1 53.4 : 
Imports of goods and services, relative to GDP (%)  52.2 63.5 56.6 58.2 54.8 61.9 62.8 66.8 72.3 : 
            
Industry Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
Industrial production volume index (2000=100)  96.6 100.0 96.9 91.8 96.1 94.0 100.6 104.2 108.0 113.9 
            
Inflation rate Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
SI: Consumer price index (CPI), (tot al, % change on previous year)  -0.7 5.8 5.5 1.8 1.2 -0.4 0.5 3.2 2.3 8.3 
            
Balance of payments Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
Balance of payments: current account total (million eur o) 1) -61 -106 -264 -401 -168 -363 -121 -45 -415 -851 
Balance of payments current account: trade balance (million euro)  1) -465 -750 -589 -856 -753 -914 -859 -1 020 -1 175 -1 737 
 
EN 78   EN Balance of payments current account: net services  (million euro) 1) 37 53 -21 -24 -6 -43 -25 22 26 0 
Balance of payments current account: net income (milli on euro) 1) -67 -70 -31 -47 -55 -33 -92 -28 -278 -93 
Balance of payments current account: net current tr ansfers (million euro) 1) 435 661 377 525 646 628 853 982 1 012 979 
of which government transfers (million euro) 1) 68 144 55 103 89 56 53 59 24 48 
Net foreign direct investment (FDI) (million euro)  83 234 499 112 100 260 75 345 507 422 
Foreign direct investment (FDI) abroad (million euro) 1) 0 1 -1 0 0 -1 -2 0 1 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) 83 233 500 112 100 261 77 345 506 413 
of which FDI of EU-27 countries in the report ing economy (million euro)  : : : : 43 125 41 255 355 276 
            
Public finance Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
General government deficit/surplus, relative to GDP (% )  0.3 2.3 -2.5 -0.5 0.1 0.4 0.2 -0.5 0.6 -0.9 
SI: General government debt, relative to GDP (%)  32.0 48.1 48.8 43.0 39.1 36.6 39.5 33.1 25.8 21.4 
            
Financial indicators Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
Gross foreign debt of the whole economy, relative to GDP (%) 2) 43.4 42.7 44.2 39.3 35.9 47.9 53.9 49.1 48.9 51.0 
Gross foreign debt of the whole economy, relative to total exports (%) 2) 108.9 93.6 108.4 108.5 95.7 121.2 122.3 104.8 93.3 98 .4 
Money supply: M1 (banknotes, coins, overnight dep osits, million euro)  325 368 415 432 461 470 501 591 772 881 
Money supply: M2 (M1 plus deposits with maturity up to two years, million euro)  556 690 1 145 1 052 1 260 1 475 1 708 2 130 2 728 2 913 
Money supply: M3 (M2 plus marketable instruments, m illion euro)  647 786 1 267 1 141 1 324 1 542 1 777 2 221 2 872 3 184 
Total credit by monetary financial institutions to resi dents (consolidated) (million euro) 3) 527 624 620 657 761 951 1 153 1 5 04 2 093 2 803 
Interest rates: day-to-day money rate, per annum (%)  11.6 7.2 11.9 14.4 5.8 8.0 9.2 5.6 3.5 4.0 
Lending interest rate (one year), per annum (%) 3) 18.5 17.5 23.0 23.0 14.0 13.0 13.0 9.5 7.5 8.5 
Deposit interest rate (one year), per annum (%)  : : : : : : : : : : 
euro exchange rates: average of period - 1 euro = … nat ional currency  60.620 60.725 60.913 60.978 61.264 61.338 61.296 61.189 61.184 61.265 
Effective exchange rate index (2000=100)  86.6 100.0 105.9 109.9 114.3 117.3 119.6 119.9 119.4 120.6 
Value of reserve assets (inc luding gold) (million euro)  422 759 844 771 715 717 1 123 1 417 1 524 1 495 
            
External trade Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
Value of imports: all goods, all partners (million euro)  : : : 2 105 2 031 2 354 2 601 2 980 3 795 4 643 
Value of exports: all goods, all partners (million euro)  : : : 1 178 1 203 1 346 1 644 1 918 2 446 2 689 
Trade balance: all goods, all partners (million euro)  : : : -927 -828 -1 008 -957 -1 062 -1 349 -1 954 
Terms of trade (export price index / import price index, 1998 = 100)  97.1 95.4 97.1 106.4 94.5 82.9 95.6 88.4 107.3 106.1 
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 
Share of imports from EU-27 countries in value of total imports (%)  : : : 61.7 60.3 60.8 54.7 53.0 49.6 48.2 
            
Demography Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
Natural growth rate: natural change (births minus deaths) (p er 1000 inhabitants)  5.2 5.9 5.0 4.8 4.4 2.7b 2.0 1.9 1.5 1.8 
Infant mortality rate: deaths of children under one year of age per 1000 live births  16.2 13.2 13.2 11.7 12.8 13.2 12.8 11.5 1 0.3 : 
 
EN 79   EN Life expectancy at birth: male (years)  70.9 71.0 71.2 71.2 71.3 71.4 71.6 71.7 : : 
Life expectancy at birth: female (years)  75.7 76.4 76.4 76.6 76.3 75.9 75.9 75.9 : : 
            
Labour market Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
Economic activity rate (15-64): share of  population aged 15-64 that is economically active (%)  59.7 59.7 61.8 59.8 61.3 58.8 6 0.7 62.2 62.8 63.5 
SI: Employment rate (15-64): share of population aged 15-64 that  is in employment (%)  40.2 40.3 42.6 40.4 38.5 36.8 37.9 39.6 40.7 41.9 
Share of male population aged 15-64 that is in employment (%)  49.4 49.7 50.6 48.6 45.6 44.4 45.4 48.3 48.8 50.7 
Share of female population aged 15-64 that is in employment (%)  30.9 30.9 34.5 32.0 31.3 28.9 30.1 30.7 32.3 32.9 
SI: Employment rate of older workers (55-64): share of population aged 55-64 that is in 
employment (%)  26.3 26.2 27.7 25.8 28.5 24.5 26.2 27.9 28.8 31.7 
Employment by main sectors (%)                      
Agriculture  : : 25.0 24.0 22.1 16.9 19.6 20.2 18.3 19.7 
Industry  : : 29.3 27.5 27.4 25.9 25.8 25.1 25.0 24.8 
Construction  : : 6.0 5.9 6.6 7.0 6.5 7.6 6.5 6.5 
Services  : : 39.8 42.7 43.9 50.3 48.1 47.2 50.3 49.0 
SI: Unemployment rate: share of labour force that is unemployed (%)  32.4 32.2 30.5 31.9 36.7 37.2 37.3 36.0 35.0 33.8 
Share of male labour force that is unemployed (%)  31.9 30.5 29.5 31.7 37.0 36.7 36.5 35.3 34.6 33.5 
Share of female labour force that is unemployed (%)  33.3 34.9 32.0 32.3 36.3 37.8 38.4 37.2 35.6 34.2 
Unemployment rate of persons < 25 years: shar e of labour force aged <25 that is unemployed 
(%)  62.9 59.9 56.1 58.4 65.7 64.8 62.6 59.8 57.7 56.4 
SI: Long-term unemployment rate: share of labour force that is  long-term unemployed (%)  27.2 26.9 26.5 27.0 31.2 31.7 32.3 31. 1 30.1 28.7 
            
Social cohesion Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
Average nominal monthly wages and salaries  (national currency)  9 664.0 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 
Index of real wages and salaries (index of nom inal wages and salaries divided by the CPI) 
(2000=100)  100.3 100.0 98.1 103.0 106.7 111.4 113.6 118.1 124.5 126.9 
SI: Early school-leavers: share of popul ation aged 18-24 having not completed upper 
secondary education and not currently in education or training (%)  : : : 32.2 : : : : : : 
            
Standard of living Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
Number of passenger cars per 1000 population  144.1 147.9 152.1 151.1 148.2 122.7 124.3 118.7 121.9 128.6 
Number of subscriptions to cellular mobile telephone se rvices per 1000 population  23.7 49.4 109.0 179.7 300.4 491.6 597.6 695. 1 884.2 1 157.9 
            
Infrastructure Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
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 0.1 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 
            
Innovation and research Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
SI: Spending on human resources (public expenditure on education) relative to GDP (%)  : : : 3.4 3.4 : : : : : 
SI: Gross domestic expenditure on research & development, relative to GDP (%)  0.3 0.4 0.3 0.3 0.2 0.3 0.3 0.2 0.2 : 
SI: Percentage of households who have Internet access at home (%) 4) : : : : : 11.0 : 14.0 16.5 29.0 
            
Environment Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
SI: Total greenhouse gases emissions, CO2 equi valent (tons, 1990=100)  : : : : : : : : : : 
SI: Energy intensity of the economy (kg of oil equivalent per 1000 euro GDP 2004)  707.0 659.3 668.5 715.6 659.6 635.6 636.0 62 4.7 612.7 : 
 
EN 80   EN  
SI = Structural Indicator 
: = not available p = provisional 
e = estimate 
f = forecast b = break in series 
1) For the period 1999-2002, the values in Euro are calculated using the annual average exchange ra te; from 2003 the values in Euro are calculated on the basis of the current exchange rate. 
2) Since 2004 gross foreign debt data are prepared according to the External Debt Statistics Guide, with full data coverage. Fo r the period 1999-2003 external debt da ta are calculated using the old 
methodology, with partial data coverage. 
3) End of the year. 
4) There are no data for 2005 because the ICT survey was conducted in February 2005, as a pilot survey, and covered 2004 as ref erence year. SI: Share of renewable energy in electricity consum ption (%)  20.5 16.9 9.2 11.0 17.9 18.9 17.5 18.7 11.2 : 
SI: Road freight transport as a share of total in land freight transport (modal split of freight 
transport) (%)  69.0 60.0 87.0 92.0 94.0 91.0 93.0 92.0 88.0 84.0 
            
Energy Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
Primary production of all energy products (thousand TOE)  1 698 1 595 1 642 1 577 1 666 1 598 1 578 1 617 1 504 : 
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)  1 389 1 273 1 419 1 356 1 353 1 293 1 288 1 296 1 254 : 
Primary production of natural gas (thousand TOE)  0 0 0 0 0 0 0 0 0 : 
Net imports of all energy products (thousand TOE)  1 009 1 104 1 011 1 486 1 029 1 152 1 248 1 323 1 469 : 
Gross inland energy consumption (thousand TOE)  2 837 2 765 2 677 2 892 2 740 2 749 2 863 2 925 3 038 : 
Electricity generation (thousand GWh)  6.9 6.8 6.4 6.1 6.7 6.7 6.9 7.0 6.5 : 
            
Agriculture Note 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 
Agricultural production volume index of goods  and services (produc er prices, previous 
year=100)  101.1 101.0 90.2 97.5 104.5 107.0 100.3 105.0 98.0 104.5 
Total utilised agricultural area (thousand hectare)  1 284 1 236 1 244 1 316 1 303 1 265 1 229 1 225 1 077 1 064 
Livestock: cattle (thousand heads, end of period)  270 265 265 259 260 255 248 255 254 254 
Livestock: pigs (thousand heads, end of period)  226 204 189 196 179 158 158 167 255 247 
Livestock: sheep and goats (thousand heads, end of period)  1 289 1 251 1 286 1 234 1 239 1 432 1 244 1 249 944 950 
Production and utilisation of milk on the farm (total  whole milk, thousand tonnes)  202 220 201 198 192 213 197 235 374 368 
Crop production: cereals (including rice) (thousand tonnes, harvested production)  637 565 476 556 466 677 645 595 470 613 
Crop production: sugar beet (thousand tonnes, har vested production)  67 56 38 44 40 47 58 0 8 0 
Crop production: vegetables (t housand tonnes, harvested production)  688 680 696 : : : : : 573 :