REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA: IMPLEMENTATION OF REFORMS WITHIN THE FRAMEWORK OF THE HIGH LEVEL ACCESSION DIALOGUE AND PROMOTION OF GOOD NEIGHBOURLY RELATIONS
Date: 2013-04-16
Institutions: European Commission
Subjects: North Macedonia, accession criteria, accession negotiations, electoral reform, institutional reform, political reform, pre-accession strategy

EUROPEAN 
COMMISSION 

Strasbourg, 16.4.2013  
COM(2013) 205 final 

REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA: IMPLEMENTATION 
OF REFORMS WITHIN THE FRAMEWORK OF THE HIGH LEVEL ACCESSION 
DIALOGUE AND PROMOTION OF GOOD NEIGHBOURLY RELATIONS 

EN 

   EN 

 
 
 
 
 
  
 
1. 

INTRODUCTION 

Since  2009,  the  Commission  has  recommended,  in  its  annual  Enlargement  Strategy  Papers, 
based  on  the  analysis  in  the  accompanying  Progress  Reports,  that  accession  negotiations  be 
opened with the former Yugoslav Republic of Macedonia.  The present Report is a response 
to the Council Conclusions of 11 December 2012 which stated: 

"With  a  view  to  a  possible  decision  of  the  European  Council  to  open  accession 
negotiations  with  the  former  Yugoslav  Republic  of  Macedonia,  the  Council  will 
examine, on the basis of a report to be presented by the Commission in Spring 2013, 
implementation  of  reforms  in  the  context  of  the  HLAD,  as  well  as  steps  taken  to 
promote good neighbourly relations and to reach a negotiated and mutually accepted 
solution to the name issue under the auspices of the UN." 

This Report,  covering the six  months  since  the most recent Progress Report, is divided into 
two sections.  The first part assesses the implementation of reforms in the context of the High 
Level  Accession  Dialogue  (HLAD)  which  the  Commission  had  established  in  March  2012, 
assessing additional progress under the headings of the HLAD agenda.   

The  second  part  of  this  Report  assesses  steps  taken  to  promote  good  neighbourly  relations 
with all neighbouring countries, with a particular emphasis on relations with neighbouring EU 
Member States.  

The  Report  is  based  on  information  gathered  and  analysed  by  the  Commission,  including 
input provided by the country and neighbouring EU Member States.   

During  the  reporting  period  a  political  crisis  arose  out  of  events  which  took  place  in  the 
Parliament  on  24  December  2012  following  the  adoption  of  the  2013  annual  Budget  under 
controversial circumstances.  The forcible removal of opposition MPs and journalists from the 
Parliament chamber by security personnel resulted in the largest opposition party boycotting 
Parliament  and  threatening  the  resignation  of  their  MPs  as  well  as  a  boycott  of  the  local 
elections.  The  two-month  political  stalemate  which  followed  affected  the  functioning  of 
Parliament, which continued to operate without opposition presence, and the organisation of 
local elections.  The parties overcame the deadlock through an agreement on 1 March which 
enabled  a  return  to  normal  functioning  of  parliament  and  the  holding  of  local  elections,  as 
well  as  commitments  to  key  strategic  priorities  and  reforms.    The  1  March  agreement 
requires, moreover, a Memorandum of Understanding affirming the cross-party consensus on, 
and commitment  to,  the country's  strategic objective of EU and Atlantic integration and the 
establishment of a Committee of Inquiry.  

This  Report  covers  the  effect  of  the  political  stalemate  and  the  content  of  the  1  March 
agreement, to the extent that this has had an impact on the implementation of HLAD-related 
reforms  or  on  progress  in  good  neighbourly  relations.    The  October  2013  Progress  Report 
will,  in  its  usual  assessment  of  the  functioning  of  institutions,  assess  the  overall 

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implementation of the commitments in the 1 March agreement and the work of the Committee 
of  Inquiry  into  the  events  of  24  December  2012  and,  where  appropriate,  indicate  necessary 
follow-up. 

2. 

IMPLEMENTATION OF REFORMS IN THE CONTEXT OF THE HIGH LEVEL ACCESSION 
DIALOGUE  

Four  high-level  meetings  have  been  held  so  far  in  the  framework  of  the  HLAD:  in  March, 
May  and  September  2012  and  in  April  2013.  Numerous  technical  meetings  have  also  taken 
place between the government and the European Commission in support of HLAD activities. 
The process has provided a renewed focus and impetus to the country's reform agenda and its 
relations with the EU.     

As  several  key  HLAD-related  laws,  strategies  and  action  plans  were  adopted  in  late  2012 
strong emphasis is being placed on implementation in 2013.  Reforms continued to be carried 
out during the reporting period, despite the political crisis affecting the work of parliament.  A 
government  reshuffle  included  the  European  integration  portfolio,  due  to  the  resignation  of 
the previous holder to run in local elections.    

Over the past year, action has been taken by the country in relation to almost all of the targets 
set in the framework of the dialogue. In some areas targets have been completed, for instance 
on  the  decriminalisation  of  defamation,  the  introduction  of  systematic  verification  of 
statements of interest,  and improved  legislation on the interception of communications.  The 
focus in 2013 is on implementation of the remaining targets. 

The assessment is structured according to the headings set by the HLAD agenda and covers 
progress on specific targets which were established at the outset of the HLAD.  

Freedom of expression and the media  

In  November  2012,  amendments  to  the  Criminal  Code  were  adopted,  decriminalising 
defamation  and  insult.  A  new  Law  on  Civil  Liability  for  Insult  and  Defamation  was  also 
adopted, among other things setting out maximum levels of damages which could be awarded 
by  civil  courts  in  defamation  cases.  The  legislative  reforms  were  in  line  with  European 
standards. They were facilitated by discussions between the government and the Association 
of Journalists, in the framework of the Media Round Table and related Working Group set up 
in 2011, and also took into account consultations with a Council of Europe expert. By the end 
of  2012,  over  200  judges,  lawyers,  journalists  and  other  practitioners  had  participated  in 
training  on  freedom  of  expression  and  in  2013  a  specific  training  programme,  covering  all 
judges dealing with defamation cases and focusing on Article 10 of the European Convention 

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on Human Rights (ECHR), is being rolled out. So far, 45 judges and 7 court associates have 
participated.  By  the  end  of  2012,  over  70  key  judgments  of  the  European  Court  of  Human 
Rights  relating  to  Article  10  had  been  translated  and  made  available  on  the  websites  of  the 
Ministry of Justice and the Academy for Judges and Prosecutors, to act as a training tool for 
practitioners. Significant efforts will need to be made to ensure that courts implement the new 
legislation in line with the requirements of the ECHR. 

The work of the Media Round Table was interrupted by the events of 24 December, which led 
to  a  breach  in  relations  between  the  government  and  the  Association  of  Journalists  (AJM). 
The AJM has lodged a Constitutional complaint in relation to the removal of the press from 
the  Parliamentary  chamber  on  that  day  and  has  made  resumption  of  the  dialogue  with 
government conditional on the findings of the Committee of Inquiry. The commitment in the 
1  March  agreement  that  the  government  will  resume  dialogue  with  journalists,  has  not  yet 
been met.  Trust needs to be rebuilt in order that remaining areas under the Media Working 
Group's  work  programme  (including  strengthening  of  the  public  service  broadcaster, 
improved professional standards and ethics of journalists and development of a system of self-
regulation) can be addressed.  

The Broadcasting Council improved its enforcement record as regards illegal concentration of 
ownership  and  conflicts  of  interest.  It  also  adopted  new  guidelines  on  the  promotion  of 
pluralism  and  competition  in  the  media  market  and  on  the  non-selective  imposition  of 
sanctions, as well as a new Broadcasting Strategy 2012-17. Work is on-going to align national 
legislation with the Audio-visual Media Services Directive. It is essential that the process of 
adoption  of  any  legislation  related  to  media  and  freedom  of  expression  is  inclusive  and 
involves all stake-holders. No progress has been made as regards increasing the transparency 
of  government  advertising,  which  was  also  part  of  the  work  programme  of  the  Media 
Working Group.   

There are continued concerns about self-censorship, poor labour rights of journalists and the 
public's  access  to  objective  reporting.  Moreover,  during  the  local  elections  in  March, 
observers noted a lack of balance in coverage by the public broadcaster and private stations 
(see also below on electoral reform). .  

Rule of law and fundamental rights 

As  regards  the  efficiency  of  the  justice  system,  courts  at  all  levels  maintained  a  positive 
clearance rate in 2012, meaning that the majority were able to process as many cases as they 
received,  or  more.  In  December,  a  further  6  judicial  vacancies  were  filled  in  the  Supreme 
Court and the Administrative Court, improving the ability to handle their caseloads. A longer-
term strategy to ensure the correct distribution of human resources within the justice system is 
however still outstanding. The capacity to generate reliable data on the overall length of court 
proceedings,  including  the  enforcement  of  judgments,  and  in  particular  the  number  of  old 
cases,  needs  to  be  developed.  To  this  end,  new  software  for  judicial  statistics,  which  will 

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complement  the  already  existing  automated  case  management  system,  is  being  tested  and 
expected  to  be  operational  in  June  2013.  As  this  will  not  include  the  work  of  enforcement 
agents (bailiffs), a supplementary monitoring system will need to be established. A further 6 
bailiffs were appointed at the end of 2012, bringing the total to 97. The capacity of the Basic 
Public  Prosecutor's  Office  for  Organised  Crime  and  Corruption  was  strengthened  by  the 
recruitment  of  three  prosecutors,  thereby  filling  all  13  posts.  Budgetary  provision  has  been 
secured for the appointment of a further 7 public prosecutors and 16 associates, to take into 
account responsibilities under the new Law on Criminal Procedure. However, the prosecution 
service  as  a  whole  has  not  yet  been  equipped  with  adequate  IT  hardware  and  server 
connectivity.  

Regarding  the  quality  and  independence  of  justice,  as  of  January  2013  all  newly  appointed 
first instance judges must be graduates of the Academy for Judges and Prosecutors, following 
entry  into  force  of  amendments  to  the  Law  on  Courts,  reinforcing  the  principle  of 
professionalism  and  merit-based  recruitment.  Up  to  now,  61  of  the  80  candidates  who  have 
graduated  from  the  Academy  since  January  2009  have  been  recruited  as  judges  and 
prosecutors, while 19 remain to be appointed to their first posts. The planned intake of 29 new 
students  to  the  Academy,  covering  both  the  academic  years  2011/12  and  2012/13,  will  be 
delayed  by  almost  a  year  until  September  2013  due  to  the  low  number  of  applicants.  Steps 
have  been  taken  to  attract  candidates,  including  repeated  calls  for  applications,  awareness-
raising measures, media campaigns, organisation of preparatory classes, as well as legislative 
changes  to  increase  candidates'  monthly  stipend.  The  current  legislation  governing  the 
disciplining and dismissal of judges still needs to be made more precise and predictable, and 
the proportionality of its application by the Judicial Council needs to be ensured.  

As  regards  the  prevention  of  corruption,  following  the  amendment  of  the  legislative 
framework in 2012 to provide for systematic verification of statements of interest by the State 
Commission  for  the  Prevention  of  Corruption  (SCPC),  483  statements  submitted  by  MPs, 
Ministers,  Deputy  Ministers  and  officials  elected  or  appointed  by  Parliament  were  verified. 
Several conflicts of interest were identified and the conflict addressed. During the verification 
exercise,  123  officials  were  found  not  to  have  submitted  statements  and  in  26  cases 
misdemeanour  proceedings  were  initiated  in  early  2013.  Amendments  to  the  Law  on 
Financing  of  Political  Parties  were  adopted  in  November  2012  to  strengthen  the  system  of 
supervision, but practical results in terms of improved implementation remain to be seen. A 
full overview of all investigations, indictments, convictions and sentences, including for high-
level  corruption  cases,  is  currently  being  compiled,  together  with  data  on  all  misdemeanour 
penalties, tax penalties and disciplinary sanctions imposed in recent years. The exercise brings 
together  multiple  bodies,  including  the  police,  financial  police,  Customs  Administration, 
Public  Revenue  Office,  public  prosecution  and  courts,  as  well  as  the  SCPC.  Steps  should 
continue to be taken to strengthen inter-agency cooperation and information flow in order to 
identify and address any weaknesses in the fight against corruption.  

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Inter-community dialogue 

Under the coalition government, dialogue continued at all levels, and was unaffected by the 
political crisis which was without ethnic elements.   

There were some inter-ethnic incidents during the reporting period. There were a number of 
protests  at  the  appointment,  following  a  pre-electoral  government  reshuffle,  of  a  former 
member  of  the  National  Liberation  Army  as  Defence  Minister.    The  authorities  and 
community leaders took rapid and effective action to prevent escalation.  In the context of the 
first round of the local elections on 24 March, the OSCE / Office for Democratic Institutions 
and  Human  Rights  (ODIHR)  preliminary  findings  noted  that  ethnically  divisive  rhetoric 
heightened tensions in some municipalities. 

A review of the implementation of the Ohrid Framework Agreement (OFA), the framework 
for inter-ethnic relations since 2001, was launched by the Secretariat for the implementation 
of  the  OFA  (SIOFA)  and  is  being  conducted  over  four  phases,  culminating  in  policy 
recommendations.    The  first  phase  of  the  OFA  review  was  published  on  11  April  and  the 
second  phase  is  ongoing.    State  funding  of  EUR  100,000  has  been  provided.    Coordination 
between the SIOFA and other relevant institutions, such as the Agency for the Protection of 
Minorities, and grant distribution by SIOFA, needs to be improved.   

In December 2012, following a meeting between the leaders of VMRO-DPMNE and DUI, the 
two  parties  issued  a  joint  statement  emphasising  that  inter-ethnic  challenges  would  be  dealt 
with in a spirit of mutual respect and tolerance.   

During the reporting period, the second in a series of working meetings was held to review the 
implementation  of  the  government  Action  Plan,  which  resulted  from  the  conclusions  of  the 
2011  Roma  seminar.  So  far  11  Roma  Information  Centres  have  been  opened  and  provide 
assistance  in  accessing  social  and  educational  services.  Projects  for  the  inclusion  of  Roma 
children in preschool and secondary school education, including mentoring and scholarships, 
continued to be implemented. Recent measures to identify and assist persons without identity 
documents  have  showed  some  results  but  more  systematic  measures  are  still  needed.  While 
there has been an increase in the 2013 budget allocated for implementation of the strategy on 
social inclusion of the Roma, allocations are for capital investment rather than health, culture 
or social welfare and implementation is slow. 

Public administration reform 

An  updated  Strategy  on  Public  Administration  Reform  was  adopted  by  the  Government  in 
October  2012  to  take  account  of  the  developments  in  the  area  since  adoption  in  2010. 
Preparatory  work  continued  on  advancing  the  legislative  framework  for  civil  and  public 
service and general administrative procedures. Drafting of the respective laws has progressed 
in consultation with EU experts.  

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A  new  legislative  approach  has  been  prepared  to  unify  fundamental  principles  for  both  the 
civil  service  and  public  employment,  such  as  transparency  of  recruitment  and  public 
employment  registers,  the  principle  of  merit  and  targets  for  equitable  representation.  
A  review  of  the  general  principles governing  public  employment  in  specific  areas  such  as 
healthcare  and  education  was  launched  and  drafting  of  sector-specific  laws  was  initiated, 
including the law on administrative servants. A working group on the latter was established in 
November  2012  with  broad  representation  of  stakeholders.  A  policy  paper  was  adopted  in 
March  outlining  the  main  elements  of  the  new  law  as  regards  i.a.  human  resource 
management,  appraisal  and  dismissal  procedures,  training,  and  mobility.  A  conference  on 
equitable representation was organised by OSCE and OECD/SIGMA at Ohrid in November 
2012. 

Following  a  public  consultation  in  December  2012,  a  policy  paper  was  adopted  by  the 
government  in  January  2013  setting  out  the  main  objectives  of  the  new  law  on  general 
administrative  procedure.  The  government  tasked  the  working  group  with  preparing  a  draft 
text of the law by end 2013.  

As regards decentralisation and regional policy, following a review, the government adopted a 
methodology  in  March  2013  for  monitoring  implementation  of  the  Decentralisation 
Programme  and  Action  Plan.  Funding  of  capital  investment  projects  in  regions  has  been 
maintained. Full implementation of the 2008 law and the Strategy for regional development 
2009-2019  remains  however  a  challenge,  particularly  the  requirement  to  provide  adequate 
resources  to  regional  economic  development  activities  through  the  regional  development 
bodies.  Achieving  financial  sustainability  of  municipalities  is  required  to  ensure  that  all  the 
transferred/decentralized competencies can be carried out.  

Electoral reform 

Amendments  to  the  Electoral  Code  and  the  Law  on  Financing  of  Political  Parties  were 
adopted in November 2012, addressing some of the OSCE/ODIHR, Venice Commission and 
GRECO  recommendations.  The  amendments  covered  areas  such  as  the  separation  between 
party and state and increased transparency of political party and campaign finances. A number 
of  recommendations,  especially  regarding  the  discrepancy  on  thresholds  for  private  and 
corporate  campaign  contributions,  deadlines  for  auditing  interim  campaign  finance  reports, 
allocation of mandates for out-of-country voters, as well as an audit of the voter's list were not 
addressed. The agreement reached on 1 March contains a commitment to address these issues 
following the local elections. As part of that agreement, the Electoral Code was also amended 
in  the  weeks  before  elections  to  allow  the  late  submission  of  candidate  lists  by  the  biggest 
opposition party which had previously threatened to boycott the elections. In advance of the 
local elections, the accuracy of the Voters' List was improved mainly by conducting checks of 
people  with  and  without  biometric  passports  or  ID-cards.  All  major  parties  supported  a 
change  to  the  legislation  that  would  allow  only  citizens  with  a  valid  biometric  document  to 
exercise the right to vote. Public awareness campaigns took place to increase the number of 

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biometric  document-holders  and  to  alert  voters  to  the  possibility  of  inspecting  the  publicly 
available Voters' List, an opportunity taken by 42,747 citizens, a number significantly higher 
than  during  the  previous  election  in  2011.  On  election  day,  the  well-publicised  new 
requirement to possess biometric identification to exercise the right to vote nevertheless led to 
some  complaints.  The  still  outstanding  audit  of  the  Voter's  List,  as  recommended  by  the 
OSCE/ODIHR and which forms part of the 1 March agreement, is to be completed after the 
local elections.  

OSCE/ODIHR's preliminary findings on the recent local elections stated that they were well-
administered and in general the election administration on all levels functioned efficiently and 
all electoral deadlines were met in line with the applicable legal framework. Candidates were 
able  to  campaign  freely  and  the  campaign  was  active.  Mayoral  candidates  in  most  regions 
signed  a  Code  of  Conduct  For  Free  and  Fair  Elections.  Election  Day  was  calm  and  polling 
well organised in a majority of the polling stations. Voters were able to freely express their 
choice in a calm atmosphere. There was a high turn-out. 

OSCE/ODIHR  reported,  however,  that  allegations  of  voter  intimidation  and  misuse  of  state 
resources  persisted  throughout  the  election  campaign,  and  that  separation  between  state  and 
political party was blurred. Media covered the campaign extensively, but several broadcasters, 
including the public broadcaster, did not provide a balanced coverage of the campaign. While 
there was enhanced confidence in the accuracy of voter lists, the procedures for compiling and 
maintaining the lists can be further improved. 

 Strengthening the market economy 

The Organic Budget Law was amended in December 2012 in order to strengthen the strategic 
planning of the public spending. Further efforts are needed to improve strategic planning and 
introduce multi-year budgeting. The strategic importance of key reform areas is insufficiently 
reflected  in  the  annual  budget  planning,  and  detailed  information  on  implementation  and 
funding allocations for policy measures is needed. 

As  of  the  end  of  February  2013,  the  government  had  cleared outstanding  payment 
obligations (VAT refunds and goods and services payments) of EUR 92 million. In order to 
improve  transparency,  budget  planning  and  management,  the  Government amended  the 
Treasury  manual  introducing compulsory  recording  of  multi-year  payment  obligations  for 
budget organisations from 2014 onwards.  

In  mid-October  2012,  the  Government  adopted  an  Action  Plan  for  Youth  Employment 
covering the period from 2012 to 2015 that should help to tackle the problem of high level of 
youth unemployment by promoting more and better jobs for young people. The plan includes 
both structural and active measures.  

Amendments to laws related to the labour market were adopted in December 2012, aimed at 
improving  labour  market  statistics  and  better  identifying  the  real  number  of  unemployed. 
Implementation  of  the  on-going  active  labour  market  measures  continues  but  with  limited 

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efficiency. In December 2012 the Government adopted the 2013 Operational Action Plan for 
Active  Programmes  and  Employment  Measures.  The  financial  allocations  for  active  labour 
market programmes remain low. 

In  December  2012,  the  Parliament  adopted  amendments  to  the  Company  law,  aimed  at 
improving  market  exit  by  facilitating  deletion  from  the  Company  Register.  The  deletion  of 
long-term inactive companies from the Company Register has started. 

The  harmonisation  of  sectorial  legislation  with  the  Law  on  Concessions  and  Public-Private 
Partnerships has advanced. Out of 16 laws needing harmonisation, 12 have been adopted and 
4  are  being  prepared.  The  smooth  implementation  of  this  new  set  of  laws  will  require 
strengthening  of  the  administrative  capacity  of  the  Ministry  of  Economy  and  improved 
coordination with other responsible authorities.  

The 2011 Annual report of the State Audit Office (SAO) was reviewed by the Parliament and 
the Government. Procedures still need to be put in place to ensure follow-up mechanisms for 
the  Parliament.  The  newly  established  practice  of  regular  government  follow-up  of  the 
handling  of  SAO  recommendations  by  budget  users  should  be  institutionalised,  with  a 
particular focus on systemic shortcomings identified in SAO audit reports. The efficiency of 
the judicial follow up of SAO reports by the Public Prosecutor also needs to be improved. 

3. 

STEPS  TAKEN  TO  PROMOTE  GOOD  NEIGHBOURLY  RELATIONS  AND  TO  REACH  A 
NEGOTIATED AND MUTALLY ACCEPTED SOLUTION TO THE NAME ISSUE UNDER THE 
AUSPICES OF THE UN 

Regional and sectoral cooperation 

The former Yugoslav Republic of Macedonia actively participates in regional initiatives and 
hosts  relevant  regional  meetings.  The  country  also  participates  in  bilateral  and  regional 
frameworks  in  the  field  of  justice  and  home  affairs  including  border  management 
cooperation  with  Albania,  Serbia,  Kosovo*1and  Bulgaria;  existing  or  planned  'common 
contact  centres'  for  police  and  customs  cooperation;  regular  'mixed'  border  patrols  with 
Albania, Serbia, Kosovo and Bulgaria, and joint border controls with the Serbian authorities, 
agreements on police cooperation with Croatia, Montenegro, and Serbia, and cooperation with 
Kosovo, alongside regional commitments. An agreement on mutual travel of citizens entered 
into  force  with  Montenegro  in  December  2012  which,  as  with  similar  agreements  with 
Albania  and  Serbia,  allows  citizens  to  pass  freely  into  each  state  with  only  biometric 
identification. 

* This designation is without prejudice to positions on status, and is in line with UNSCR 1244/1999 and the ICJ Opinion on 

the Kosovo declaration of independence 

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In  the  field  of  defence  and  security  cooperation,  the  country  participates  in  bilateral  and 
regional initiatives aimed at building mutual trust and also contributes to the EUFOR Althea 
mission in Bosnia and Herzegovina.  

On  average,  20%  of  the  country's  trade  continues  to  be  with  CEFTA,  with  two-thirds  of 
global  trade  passing  through  Greece  (Thessaloniki).  Kosovo  represents  the  country's  second 
largest  export  partner  after  Germany  but  trade  declined  in  the  last  year  due  in  part  to 
undeveloped infrastructure links. Trade with Albania is also disadvantaged by infrastructure 
problems, although a November 2012 agreement signed by the two Prime Ministers envisages 
the  opening  of  a  new  border  crossing.  Similarly,  while  cross-border  rail  freight  traffic  in 
Corridor X has suffered serious decline, a recent meeting with the Prime Minister of Serbia 
emphasised  the  deepening  of  trade  relations  and  economic  cooperation,  including  possible 
joint  infrastructure  projects  and  Corridor  X-related  activities.  In  addition  to  Bilateral 
Investment  Treaties  with  Albania,  Bosnia  and  Herzegovina,  Croatia,  Montenegro,  Serbia, 
Turkey  and  Bulgaria,  the  country  is  exploring  the  possibility  of  one  with  Kosovo  and  has 
expressed interest in one with Greece.  

Bilateral relations 

Bulgaria 

Following on from the findings of the October 2012 Progress Report, concerns expressed by 
Bulgaria and the December 2012 Council Conclusions which noted 

"… the recent high level contacts between the former Yugoslav Republic of Macedonia 
and Bulgaria and looks forward to their translation into concrete actions and results" 

the  countries  entered  into  a  dialogue  to  improve  relations.    Exchanges  at  Foreign  Minister 
level  led  to  a  proposal  from  Bulgaria,  on  27  November,  to  incorporate  a  number  of 
confidence-building  measures  in  the  broader  framework  of  an  'Agreement  on  good 
neighbourly relations and cooperation', in addition to joint thematic working groups related to 
key areas of concern and continuous commitment and good will in the implementation of any 
agreements  reached.    The  elements  of  this  proposal,  which  build  on  the  1999  Declaration 
between  Prime  Ministers,  also  featured  in  the  unilateral  declaration  made  by  Bulgaria 
following the December 2012 Council Conclusions.   

The joint working group tasked with negotiating the new agreement, and mapping out the way 
forward in operational terms for bilateral relations more generally, met on 14 December, 14-
15 January, 1 February and at the end of March.  A draft text of the Agreement was formally 
presented  by  Bulgaria  in  early  January.  Meetings  took  place  between  the  two  Foreign 
Ministers en marge of an international conference on 1-2 February, as well as a visit by the 
Prime  Minister  of  Bulgaria  to  Skopje  on  16  February.    Both  countries  report  only  a  few 
outstanding issues with the text.  

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For the time being, the other new elements mentioned in the Foreign Minister of Bulgaria's 27 
November  letter  -  the  creation  of  a  series  of  joint  working  groups  in  key  areas  and  the 
establishment  of  a  High  Level  Council  and  annual  government-to-government  meetings,  or 
responses to various proposals for concrete actions and results (e.g. high-level official visits, 
administrative  cooperation  and  exchanges,  establishment  of  expert  dialogue  on  historical 
issues,  increased  cooperation  on  sectoral  issues  and  negotiation  of  various  sectoral 
cooperation agreements), are on hold pending the signing of the Agreement.   

High-profile contacts with Bulgaria intensified during the reporting period. During a visit to 
Skopje  by  the  Prime  Minister  of  Bulgaria  on  16  February2,  the  two  Prime  Ministers  made 
clear their commitment to strengthening bilateral relations, declared that high-level meetings 
should be intensified and that sending positive public messages would contribute to reducing 
stereotypes  and  strengthening  cooperation.    President  Ivanov  undertook  a  number  of 
initiatives,  including  visiting  the  Bulgarian  Cultural  Club  and  attending  the  National  Day 
celebrations.  The  Deputy  FM  attended  a  joint  Holocaust  memorial  day  in  Bulgaria  on  13 
March 2013. 

During the reporting period and before the negotiation of the Agreement began, consultations 
between the two Foreign Ministries took place in Sofia on 15 November on EU-related issues, 
based  on  the  September  2011  "Memorandum  for  Cooperation  in  the  field  of  European  and 
Euro-Atlantic  integration".    Another  round,  as  well  as  a  follow-up  to  the  October  2012 
seminar in Skopje on EU accession negotiations, have not yet taken place. 

As regards cross-border, sectoral and trade relations, foreign direct investment remains high, 
with  almost  800  companies  with  Bulgarian  capital  registered  in  the  country.    The  annual 
meeting  of  the  bilateral  Chamber  of  Commerce  took  place  on  27  March.  Imports  from 
Bulgaria increased to 6% in 2012, with exports remaining constant, while dropping slightly as 
a share of total exports, from 9% to 7%.  In December 2012, the third call for tenders for IPA-
funded  cross-border  projects  covering  environment,  private  sector  development  and  social 
cohesion was launched. Both Prime Ministers have emphasised the need to improve Corridor 
VIII  road  and  rail  infrastructure  links  between  Sofia  and  Skopje  and  to  open  the  Klepalo 
border crossing. The two countries closely cooperate on security and defence issues, with the 
two  militaries  having  conducted  joint  exercises  and  regularly  exchanging  personnel  for 
training purposes and the sharing of experience in planning, logistics and intelligence.  

Greece 

The December 2012 Council Conclusions had stated that : 

"… Council will examine, on the basis of a report to be presented by the Commission in 
Spring  2013  …  steps  taken  to  promote  good  neighbourly  relations  and  to  reach  a 
negotiated and mutually acceptable solution to the name issue under the auspices of the 
UN." 

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On 3 October 2012, Foreign Minister Avramopoulos sent a letter proposing the signing of a 
Memorandum of Understanding, to which Foreign Minister Poposki replied on 5 November. 

Formal talks on the name issue, under the auspices of the United Nations, led by the United 
Nations Secretary General's Personal Envoy Matthew Nimetz, took on new momentum during 
the reporting period.  A visit by Mr Nimetz to both Athens and Skopje in early January, was 
followed  by  talks  in  New  York  between  the  negotiators  on  29-30  January.    The  latest  talks 
took  place  on  8-9  April,  at  which  the  UNSG's  Personal  Envoy  presented  a  new  proposal 
which he hoped could "pave the way for serious discussions and hopefully a solution".   

Cooperation  in  various  fields  (economy  and  trade,  police  and  customs  cooperation,  military 
cooperation)  is  good  at  expert  level  and  has  yielded  substantive  results.    There  are  regular 
bilateral meetings and contacts at all levels, on a wide range of issues.  There has been good 
cooperation also on EU issues, including a meeting between senior Foreign Ministry officials 
in Athens in June 2012 as well as a CSDP seminar in Athens at the end of December 2012.   
A  further  meeting  of  Foreign  Ministry  officials  took  place  in  Skopje  on  5  April  2013  and 
discussed strengthening bilateral sectoral cooperation, sharing EU expertise through twinning 
or TAIEX, and seminars e.g. on environment. 

As regards cross-border, sectoral and trade relations, economic cooperation includes contacts 
between the two Chambers of Commerce with a view to a possible Business Forum in Athens. 
A  joint  meeting  co-organised  by  the  Greek  Liaison  Office  and  the  Skopje  Chamber  of 
Commerce  in  December  2012  addressed  various  trade  and  customs  issues.  There  is  close 
cooperation  in  the  area  of  transport,  including  on  Corridor  X.    There  are  a  number  of 
proposals  to  construct  additional  border  crossing  points  which  would  require  further 
feasibility assessment. Tourism  and  other  people to  people  contacts remain high. Regarding 
trade between the countries, imports from Greece significantly increased during 2012 making 
it the second largest trade partner and fourth largest source of investment (10% of total inward 
investment).    Implementation  of  the  IPA-funded  cross-border  programme  is  proceeding 
smoothly. Close cooperation also takes place on police and military issues.  

Western Balkans 

The country has maintained constructive bilateral relations with other enlargement countries.  
There  are  no  open  border  demarcation  issues.  During  the  reporting  period,  the  President 
visited  Sarajevo  in  early  October  and  signature  of  an  agreement  on  a  'Euro-Atlantic 
Partnership'  with  Croatia  is  planned.  Good  relations  and  the  shared  intention  to  intensify 
economic  cooperation  were  underlined  during  the  14  February  visit  by  the  Montenegrin 
Deputy  Prime  Minister.  Bilateral  relations  with  Albania  included  both  Prime  Ministers 
reaffirming, during a visit to Tirana  on  23  November,  their  countries' friendship and shared 
commitment to EU integration, a message reiterated by both Presidents on 5 December 2012. 

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The 100th anniversary of Albania's independence, hosted in Skopje, was attended by both the 
Albanian  and  Kosovan  Prime  Ministers  and  in  November  an  agreement  was  signed  with 
Albania envisaging the opening of a new border crossing.  Relations with Serbia were further 
upgraded through a series of high-level visits that will culminate in a joint government session 
to  be  held  in  May  2013.  In  Skopje  in  January  2013,  both  Prime  Ministers  signalled  that 
differences of opinion relating to the status of Kosovo and the Orthodox Church should not be 
obstacles  to  the  further  deepening  of  cooperation.  On  18  February,  the  Foreign  Ministers 
signed an agreement on cooperation in the context of the EU accession process, similar to an 
agreement  that  the  country  has  signed  with  Albania.    With  Kosovo,  the  wide-ranging 
contractual framework for their bilateral relations and commitment to deepening cooperation 
includes ongoing work on the voluntary return of Kosovan refugees remaining in the country. 

4. 

Conclusion  

Progress  has  been  made  in  the  areas  which  this  Report  covers,  despite  the  political  crisis 
which followed the events of 24 December 2012. It is important that the political agreement 
of 1 March 2013, which has helped to overcome the political crisis, is implemented without 
delay, particularly those provisions relating to the establishment of the Committee of Inquiry.  
Implementation of EU-related HLAD reforms has also continued.   Relations with neighbours 
remained good and steps have been taken in relation to bilateral relations with Bulgaria and 
Greece. Formal talks on the 'name issue' took on new momentum during the reporting period. 

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