COMMISSION STAFF WORKING DOCUMENT North Macedonia 2021 Report Accompanying the document Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions 2021 Communication on EU Enlargement Policy
Date: 2021-10-19
Institutions: Directorate-General for Neighbourhood and Enlargement Negotiations, European Commission
Subjects: North Macedonia, accession criteria, accession negotiations, pre-accession strategy, regional cooperation

EN 

  EN 

   EUROPEAN COMMISSION  Strasbourg, 19.10.2021  SWD(2021) 294 final  COMMISSION STAFF WORKING DOCUMENT North Macedonia 2021 Report Accompanying the document Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions     2021 Communication on EU Enlargement Policy {COM(2021) 644 final} - {SWD(2021) 288 final} - {SWD(2021) 289 final} - {SWD(2021) 290 final} - {SWD(2021) 291 final} - {SWD(2021) 292 final} - {SWD(2021) 293 final}  
 
 
TABLE OF CONTENTS 

1.  INTRODUCTION ........................................................................................................................ 3 

1.1.  Context ............................................................................................................................ 3 

1.2.  Summary of the report  ..................................................................................................... 3 

2.  CLUSTER 1: THE FUNDAMENTALS OF THE ACCESSION PROCESS .................................................. 8 

2.1. Functioning of democratic institutions and Public Administration Reform ............................. 8 

2.1.1. Democracy ........................................................................................................................ 8 

2.1.2  Public administration reform ......................................................................................... 13 

2.2. Rule of law and fundamental rights ................................................................................... 17 

2.2.1  Chapter 23: Judiciary and fundamental rights ............................................................... 17 

2.2.2  Chapter 24: Justice, freedom and security..................................................................... 36 

2.3.  Economic development and competitiveness ................................................................... 46 

2.3.1.  The existence of a functioning market economy ................................................................. 47 

2.3.2.  The capacity to cope with competitive pressure and market forces within the Union . 54 

2.4.  Public Procurement, Statistics; Financial control ............................................................... 57 

Chapter 5: Public procurement ................................................................................................ 57 

Chapter 18: Statistics ................................................................................................................ 60 

Chapter 32: Financial control ................................................................................................... 62 

3.  GOOD NEIGHBOURLY RELATIONS AND REGIONAL COOPERATION ............................................. 65 

4.  ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP ......................................................... 67 

Cluster 2: Internal Market ....................................................................................................... 67 

Chapter 1: Free movement of goods ........................................................................................ 68 

Chapter 2: Freedom of movement for workers ....................................................................... 69 

Chapter 3: Right of establishment and freedom to provide services....................................... 70 

Chapter 4: Free movement of capital ....................................................................................... 71 

Chapter 6: Company law .......................................................................................................... 72 

Chapter 7: Intellectual property law ........................................................................................ 73 

Chapter 8: Competition policy .................................................................................................. 74 

Chapter 9: Financial services .................................................................................................... 76 

Chapter 28: Consumer and health protection.......................................................................... 77 

Cluster 3: Competitiveness and inclusive growth ...................................................................... 79 

Chapter 10: Information society and media ............................................................................. 79 

Chapter 16: Taxation ................................................................................................................ 81 

Chapter 17: Economic and monetary policy ............................................................................ 82 

Chapter 19: Social policy and employment .............................................................................. 82 

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Chapter 20: Enterprise and industrial policy ............................................................................ 85 

Chapter 25: Science and research ............................................................................................ 86 

Chapter 26: Education and culture ........................................................................................... 87 

Chapter 29: Customs union ...................................................................................................... 90 

Cluster 4: The Green agenda and sustainable connectivity ........................................................ 91 

Chapter 14: Transport policy .................................................................................................... 91 

Chapter 15: Energy ................................................................................................................... 93 

Chapter 21: Trans-European networks .................................................................................... 95 

Chapter 27: Environment and climate change ......................................................................... 95 

Cluster 5: Resources, agriculture and cohesion ........................................................................ 97 

Chapter 11: Agriculture and rural development ...................................................................... 98 

Chapter 12: Food safety, veterinary and phytosanitary policy ................................................ 99 

Chapter 13: Fisheries .............................................................................................................. 100 

Chapter 22: Regional policy and coordination of structural instruments .............................. 101 

Chapter 33: Financial and budgetary provisions .................................................................... 103 

Cluster 6: External Relations .................................................................................................. 104 

Chapter 30: External relations ................................................................................................ 104 

Chapter 31: Foreign, security and defence policy .................................................................. 105 

ANNEX I – RELATIONS BETWEEN THE EU AND NORTH MACEDONIA .............................................. 107 

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1.  

INTRODUCTION  

1.1.   CONTEXT   

The  Stabilisation  and  Association  Agreement  (SAA)  between  the  Republic  of  North 
Macedonia  and  the  European  Union  entered  into  force  in  April  2004  and  continues  to  be 
implemented. Since 2009, the Commission has continuously recommended to the Council to 
open accession negotiations with North Macedonia, a candidate country since 2005. Based on 
the progress achieved and the conditions having been met, the European Council endorsed the 
Council’s  decision  to  open  accession  negotiations  with  North  Macedonia  in  March  20201. 
Overall, the country has continued to maintain a steady and determined pace in advancing EU 
reforms, focusing on the fundamentals. Pending bilateral issues between Bulgaria and North 
Macedonia  need  to  be  resolved  as  a  matter  of  priority.  The  authorities  in  North  Macedonia 
continued to demonstrate publicly their commitment to advance on their EU path. The delays 
in the official launch of accession negotiations are having a negative impact on the credibility 
of the EU. 

The COVID-19 pandemic continued throughout the reporting period. By early October 2021, 
North Macedonia had recorded in total around 193,000 cases and about 6,750 deaths related 
to the pandemic. Around 35% of the population were fully vaccinated in early October. 

The authorities have taken measures to protect public health and mitigate the socio-economic 
impact of the COVID-19 crisis. The EU has provided substantial support to North Macedonia 
since  the  pandemic  began  and  mobilised  a  package  of  EUR  66  million  of  non-repayable 
financial  aid  for  immediate  needs,  emergency  medical  equipment  and  socio-economic 
response  to  the  pandemic.  This  was  complemented  by  EUR  160  million  in  macro-financial 
assistance for North Macedonia. The EU, as  Team  Europe has  also  supported the  country’s 
vaccination campaign by providing almost 350,000 doses by early October as either donations 
or re-sales covered by an EU grant. 
1.2.   SUMMARY OF THE REPORT2 3 

On the political criteria, North Macedonia continued its efforts to strengthen democracy and 
the rule of law, including by activating existing checks and balances and through an outreach 
on key policy and legislative issues. The country has shown its commitment to deliver in the 
key  areas  of  the  fundamentals,  including  through  the  ‘Europe  at  Home’  agenda  and  the 
‘Action  Plan  21’  on  the  fight  against  corruption.  The  first  round  of  the  local  elections  took 
place  on  17  October.  The  Office  for  Democratic  Institutions  and  Human  Rights  of  the 
Organisation  for  Security  and  Cooperation  in  Europe  (OSCE/ODIHR)  has  deployed  an 
Election  Observation  Mission.  Limited  progress  was  made  in  addressing  the  outstanding 
recommendations from OSCE/ODIHR and the Venice Commission over the reporting period. 
The comprehensive review of electoral legislation and the adoption of the relevant laws still 
need to be finalised in a timely and inclusive manner.  

1 https://www.consilium.europa.eu/media/43076/26-vc-euco-statement-en.pdf 
2  This  report  covers  the  period  from  June  2020  to  June  2021.  It  is  based  on  input  from  a  variety  of  sources, 
including contributions from the government of North Macedonia, the EU Member States, European Parliament 
reports and information  from  various  international and  non-governmental organisations.  This also includes the 
results of comparative assessments and indices produced by other stakeholders, in particular in rule of law. 
3  For  the  state  of  play  the  report  uses  the  following  assessment  scales:  early  stage,  some  level  of  preparation, 
moderately  prepared,  good  level  of  preparation  and  well  advanced.  For  progress  made  during  the  reporting 
period,  the  following  scale  has  been  used:  backsliding,  no  progress,  limited  progress,  some  progress,  good 
progress and very good progress. Where appropriate, also interim steps have been used. 

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Opposition parties remained actively engaged in Parliament and on some occasions supported 
key EU related laws. Parliamentary work was nevertheless impeded by political polarisation, 
compounded  by  COVID-19,  which  on  occasion  affected  its  ordinary  functions.  Efforts  are 
needed  to  strengthen  the  role  of  Parliament  as  a  forum  for  constructive  political  dialogue, 
particularly  on  the  EU  reform  agenda.  Parliament  continued  to  exercise  its  legislative 
functions.  Great  care  should  be  taken  in  the  use  of  fast  track  procedures,  which  need  to  be 
limited  to  ensure  effective  scrutiny  and  consultation  of  legislation.  Parliament  continued  to 
exercise  proper  oversight  of  the  executive.  The  proposals  for  internal  reform  of  Parliament, 
agreed during the third round of the ‘Jean Monnet Dialogue’4 in early 2020, have yet to be put 
in place. The criminal responsibility for those who orchestrated or committed violence in the 
attack  on  Parliament  on  27  April  2017  continued  to  be  established,  including  through  first 
instance verdicts. The government needs to keep up the reform momentum and focus on the 
implementation  of  the  existing  legal  framework  rather  than  launching  sporadic  new 
initiatives.  Timely  and  substantial  implementation  of  the  reform  agenda  requires  sustained 
support  from  society  as  a  whole.  Inter-ethnic  relations  remained  stable  and  the  Ohrid 
Framework Agreement continued to be implemented.  

Civil  society  organisations  continued  to  be  active  and  have  an  important  role  to  play  in  the 
reform  process.  Further  efforts  are  needed  to  ensure  a  more  timely,  meaningful  and 
transparent  consultation  process  with  civil  society.  In  the  context  of  the challenges  faced  in 
recovering  from  the  COVID-19  crisis,  governmental  and  non-governmental  actors  are 
expected to build long-term partnerships and to strengthen existing cooperation.  

The reform of the intelligence sector, resulting in new structures being established and a legal 
framework being developed, has almost been completed. The country needs to strengthen the 
capacity for parliamentary oversight over the intelligence services. 

North  Macedonia  is  moderately  prepared  in  the  reform  of  its  public  administration.  Some 
progress was made in finalising the horizontal functional review of the state administration. It 
is  important  that  the  horizontal  functional  review  is  adopted  by  the  government. 
Recommendations  were  made  for  the  new  organisation  of  state  administrative  bodies  with 
improved  lines  of  accountability.  These  need  to  feed  into  the  relevant  legislation,  which 
should be adopted and implemented. North Macedonia is currently reviewing the legislative 
framework  on  human  resources  management  through  the  revision  of  the  Law  on 
Administrative Servants and the Law on Public Service Employees, and is introducing a new 
Law on Top Management  Service.  The new framework should improve the management of 
human resources across  the administration and will  contribute to  ensuring better respect  for 
merit-based  recruitments,  promotions  and  dismissals,  including  at  senior  management  level. 
The monitoring reports on implementation of the Public Administration Reform Strategy and 
the Public Financial Management Reform Programme were presented. The State Commission 
for  the  Prevention  of  Corruption  (SCPC)  continued  to  address  cases  of  alleged  nepotism, 
cronyism and political influence in the process of recruitment of public sector employees and 
in  the  process  of  appointment  of  members  of  supervisory  and  management  boards.  Its 
findings  and  recommendations  need  to  be  systematically  followed-up  by  the  concerned 
institutions. 

The  judicial  system  of  North  Macedonia  has  some  level  of  preparation/  is  moderately 
prepared.  Some  progress  was  achieved  regarding  the  implementation  of  the  judicial  reform 

4 The objective of the ‘Jean Monnet Dialogue’, initiated by the European Parliament in 2018 with the Parliament 
of North Macedonia, aims at building confidence amongst political parties and strengthening democratic culture 
and practices in Parliament.  

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strategy,  thereby  further  addressing  the  recommendations  from  the  Venice  Commission  and 
the Senior Experts’ Group on systemic Rule of Law issues. Efforts are still needed to ensure 
systematic implementation of the updated action plan on the judicial reform strategy and the 
human  resources  strategies  for  the  judiciary  and  prosecution.  Judicial  institutions  continue 
applying the new rules for the appointment, promotion, discipline and dismissal of judges and 
prosecutors. Most of the implementing legislation of the revised Law on the Council of Public 
Prosecutors was adopted.  It is  important  to  continue implementing the legal  framework  and 
strategic  plans  related  to  the  reform  of  the  Judicial  Council  and  the  Council  of  Public 
Prosecutors.  A new draft Law on the Academy for Judges and Prosecutors should maintain 
the Academy as the sole entry point to the judiciary and prosecution and should secure a fair 
and transparent access to these professions 

North  Macedonia  has  some  level  of  preparation  /  is  moderately  prepared  in  the  prevention 
and  fight  against  corruption.  Some  progress  has  been  made,  as  the  country  continued  to 
consolidate its track record on investigating, prosecuting and trying several corruption cases, 
including  at  high  level,  and  strengthened  its  institutional  framework,  especially  the  State 
Commission  for  Prevention  of  Corruption  (SCPC)  and  the  Prosecutor  for  Organised  Crime 
and  Corruption  (OCCPO).  In  April  2021,  Parliament  adopted  the  2021-2025  National 
Strategy  for  the  Prevention  of  Corruption  and  Conflict  of  Interest  and  related  Action  Plan, 
consolidating the country’s commitment to prevent corruption and sanction corrupt behaviour. 
The  cases  initiated  by  the  former  Special  Prosecutor’s  Office  (SPO)  continued  to  move 
forward, thereby establishing accountability for the illegal wiretaps. A number of cases were 
subject  to  first  instance  rulings  and  new  cases  were  opened  on  the  basis  of  investigative 
material  from  the  former  Special  Prosecutor’s  Office.  The  State  Commission  for  the 
Prevention  of  Corruption  has  been  pro-active  in  preventing  corruption  and  opened  several 
cases,  including  against  high-level  officials.  The  State  Commission  was  allocated  new 
premises.  Nonetheless,  the  efforts  to  improve  its  functioning  should  continue,  especially  by 
allocating extra funding for the recruitment of expert staff. 

The  country  has  some  level  of  preparation  in  the  fight  against  organised  crime.  The 
legislative  framework  is  broadly  in  line  with  European  standards  and  efforts  to  implement 
strategies against organised crime must continue. Some progress was made at the operational 
level, but more needs to be done to improve the effectiveness of law enforcement in fighting 
certain forms of crime, such as money laundering and financial crimes. Coordination remains 
crucial for all stakeholders involved in combatting organised crime. 

Some  progress  has  been  made  in  the  fight  against  terrorism  and  preventing/countering 
violent  extremism  in  line  with  the  objectives  set  out  in  the  Joint  Action  Plan  on  counter-
terrorism  for  the  Western  Balkans  and  the  bilateral  implementing  arrangement.  A  national 
plan  for  reintegration,  resocialisation  and  rehabilitation  of  foreign  fighters  returnees  and 
members  of  their  families  was  adopted  in  June  2020,  in  order  to  implement  the  identified 
priorities for preventing violent extremism and radicalisation. 

The legal framework on the protection of fundamental rights is largely in line with European 
standards.  The  Law  on  the  Prevention  and  Protection  against  Discrimination  and  the 
Commission  for  the  Prevention  and  Protection  against  Discrimination  are  in  place.  The 
deinstitutionalisation  process  made  real  progress  and  almost  all  of  the  children  concerned 
were  resettled  to  community-based  care.  The  Ministry  of  Labour  and  Social  Policy  is 
investing  in  community  services,  including  supporting  victims  of  gender-based  violence. 
Important progress was achieved with the adoption of the Law on Prevention and Protection 
from  Violence  against  Women  and  Domestic  Violence,  with  cross-party  support.  An 
improvement is noted in terms of gender mainstreaming and women’s rights, although women 
are  among  the  categories  most  severely  affected  by  the  pandemic.  Recommendations  of 

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European  and  international  human  rights  bodies,  particularly  regarding  the  treatment  of 
detained and convicted persons must be fully implemented without delay. It is also important 
for  the  country  to  enhance  the  implementation  of  the  legislation  on  hate  speech  and  of  the 
national  action  plan  for  the  implementation  of  the  Istanbul  Convention’s  provisions.  The 
civilian external oversight mechanism over the police is not fully functional, and the absence 
of  genuinely  independent  investigators  impedes  efforts  to  address  police  impunity  and 
effective prosecution. The country should continue to improve the situation in prisons and to 
further increase alternatives to detention. 

North Macedonia has achieved some level of preparation/ is moderately prepared in the area 
of  freedom  of  expression.  Overall,  there  was  limited  progress  during  the  reporting  period. 
The  general  context  is  favourable  to  media  freedom  and  allows  for  critical  media  reporting 
although  there  have  been  increased  tensions  during  the  COVID-19  crisis.  Self-regulation 
efforts  need  to  be  resumed  and  followed  by  concrete  results  for  the  advancement  in 
professional standards of journalism. Greater transparency should be ensured regarding media 
advertising  by  state  institutions  and  political  parties.  The  authorities  need  to  increase  their 
efforts  to  reform  the  public  service  broadcaster,  ensuring  its  independence  and  financial 
sustainability.  The  public  service  broadcaster  adopted  a  five-year  development  strategy  but 
the reform process is hampered by delays in appointing the members in its managing council 
and of the council of the Agency for Audio and Audio-visual Media Services. The COVID-19 
crisis had a strong economic impact on the media sector, especially on the regional and local 
actors. Media outlets were included in the relief package, but the labour rights of journalists 
still need to be addressed. 

On regional  cooperation,  the country maintained its  good relations with  other  enlargement 
countries and maintained its engagement in regional initiatives. Existing bilateral agreements, 
including the Prespa Agreement between North Macedonia and Greece as well as the Treaty 
of Friendship, Good Neighbourliness and Cooperation with Bulgaria, need to be implemented 
in good faith by all parties. 

On the economic criteria, North Macedonia has made some progress and is at a good level of 
preparation in  developing a functioning market  economy. Severely hit by the pandemic, the 
economy slipped into a recession in 2020. A gradual recovery set in as of spring 2021. The 
government implemented a strong fiscal response to mitigate the crisis impact on households 
and firms.  The fiscal  deficit  rose to  8.2 % of GDP in  2020 while the public debt  level  rose 
sharply  to  60.2  %  of  GDP,  as  additional  financing  needs  had  to  be  covered.  Capital 
expenditure was cut in a budget revision to create space for crisis-related transfer payments, 
yet  it  was  still  heavily  under-executed.  The  authorities  took  some  additional  measures  to 
improve  fiscal  transparency,  although  a  fully  operational  state  aid  registry  is  yet  to  be 
developed.  There  has  been  little  progress  made  in  improving  revenue  mobilisation  and 
collection, as well as public investment management, including through a stronger framework 
for  public-private  partnerships.  The  new  organic  budget  law,  which  is  expected  to 
significantly  improve  fiscal  governance,  is  yet  to  be  adopted  by  Parliament,  and  its 
implementation  is  delayed.  Bolstered  by  regulatory  easing,  the  financial  sector  remained 
strong and lending to the private sector constant. The business environment continued to be 
impeded by the large size of the informal economy. 

North Macedonia has made some progress in addressing last year’s recommendations and is 
moderately prepared to  cope with  competitive pressure and market  forces within the Union. 
Integration  with  the  EU  in  trade  and  investment  remained  entrenched  also  during  the 
pandemic.  The  level  and  structure  of  trade  and  manufacturing  output  were  affected  by 
lockdowns  and  supply  chain  disruptions,  domestically  and  in  trade  partner  countries.  The 

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structure of the industry  is  continuously improving. The deterioration in  labour productivity 
and  price  competitiveness  in  2020  reflects  to  a  large  degree  the  economic  impact  of  the 
pandemic  and  the  government’s  job-retention  measures.  Vocational  Educational  Training 
(VET)  curricula  has  improved.  Still,  skills  shortages,  reflecting  shortcomings  in  education 
curricula, capital investment gaps, and limited integration of domestic firms in global supply 
chains are restricting potential growth. Digitisation of the economy is progressing.  

As  regards  its  ability  to  assume  the  obligations  of  membership,  North  Macedonia  is 
moderately prepared in most of the areas covered by Cluster 2 on internal market, namely 
the  free  movement  of  goods,  services  and  capital,  intellectual  property  and  competition 
policy. Meanwhile, the country has a good level of preparation on company law, although it is 
still  at  an  early  stage  on  freedom  of  movement  for  workers.  In  the  reporting  period,  North 
Macedonia  made  limited  or  no  progress  in  all  areas,  except  on  free  movement  of  capital, 
company law and intellectual property where it made some progress. Overall, more progress 
is  needed  in  the  coming  year  in  the  areas  covered  by  this  cluster  as  it  is  relevant  for  North 
Macedonia’s  preparations  to  meet  the  requirements  of  the  EU’s  internal  market  and  for  the 
development of the Common Regional Market. 

Overall, North Macedonia is moderately prepared in most of the areas covered by Cluster 3 
on  competitiveness  and  inclusive  growth,  including  in  information  society  and  media, 
taxation, enterprise and industrial policy, education and culture, and economic and monetary 
policy.  However,  additional  efforts  are  needed  to  bring  these  areas  to  a  higher  degree  of 
preparedness. It  has  a  good  level  of  preparation  in  the  areas  of  science  and  research  and 
customs  union.  Some  progress  was  made  in  most  of  these  areas.  More  efforts  are  needed, 
particularly in areas where limited progress was made, such as information society and media, 
science and research as well as education and culture.  

On Cluster 4 on the Green Agenda and sustainable connectivity, North Macedonia has a 
good level of preparation in trans-European networks. It is moderately prepared on transport 
policy and energy and as some level of preparation on environment and climate change. North 
Macedonia  is  actively  participating  in  meetings  of  the  Transport  Community  and  Energy 
Community. It has a high level of compliance with the Energy Community Treaty, notably on 
electricity.  As  all  Western  Balkans,  North  Macedonia  endorsed  the  Green  Agenda  for  the 
Western Balkans at the Sofia Summit in December 2020. This year, some progress was made 
in  the  energy  sector,  notably  with  the  progress  made  towards  the  adoption  of  the  National 
Energy  and  Climate  Plan.  However,  limited  progress  were  made  in  transport,  environment 
and  climate  change.  The  country  needs  to  substantially  step-up  its  ambition  to  properly 
implement the acquis of chapters 14 and 27. These efforts will increase the efficiency of the 
Economic and Investment Plan and speed up the implementation of the Green Agenda for the 
Western Balkans. Administrative capacities need to be strengthened in all sectors. In addition, 
strategies, action plans and legislation in these sectors need to be coherent with the principles 
and  priorities  of  the  Green  Agenda  and  to  ensure  consistency  between  relevant  sectoral 
documents.   North  Macedonia  is  moderately  prepared  in  most  areas  of  Cluster  5  on 
resources, agriculture and cohesion. It has a good level of preparation in the area of food 
safety, veterinary and phytosanitary policy and is at an early stage of preparation in financial 
and budgetary provisions. Over the reporting period, good progress was made in food safety, 
veterinary  and  phytosanitary5  policy  and  some  progress  was  made  in  agriculture  and  rural 
development. However, further efforts are needed, in particular in areas where limited or no 

5 Measures for the control of plant diseases, especially of agricultural crops. 

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progress  was  made  such  as  fisheries,  regional  policy  and  the  coordination  of  structural 
instruments as well as financial and budgetary provisions. 

North  Macedonia  is  moderately  prepared  in  the  areas  covered  by  Cluster  6  on  external 
relations and has made some progress during the reporting period. In its common commercial 
policy, North Macedonia continued its efforts to coordinate its positions and closely align its 
commercial policies with those of the EU, including within the WTO. However, no progress 
was  made  in  development  policy  and  humanitarian  aid.  North  Macedonia  is  moderately 
prepared  in  the  area  of  common  foreign,  security  and  defence  policy.  The  country  has 
increased  its  alignment  with  the  EU  common  foreign  and  security  policy  to  96%  and  its 
participation in EU crisis management missions and operations. 

North  Macedonia  remains  on  one  of  the  main  transit  routes  for  migration  movement.  The 
country continues to play a constructive role in the management of mixed migration flows. It 
cooperates  effectively  with  neighbouring  countries  and  EU  Member  States,  including  with 
guest  officers  from  the  EU  Member  States  on  the  ground.  Efforts  to  ensure  basic  living 
conditions and services for all migrants staying in the country continued. The registration of 
migrants and adequate protection-sensitive profiling improved but needs to be carried out in a 
more  systematic  manner.  The  Status  Agreement  with  the  EU,  that  would  allow  the 
deployment of standing corps of the European Border and Coast Guard Agency (Frontex) in 
the country, has not yet been signed due to a bilateral issue. The country should take a more 
methodical approach to fighting the smuggling of migrants. 

2. 

CLUSTER 1: THE FUNDAMENTALS OF THE ACCESSION PROCESS 

FUNCTIONING OF DEMOCRATIC INSTITUTIONS AND PUBLIC ADMINISTRATION 

2.1. 
REFORM 

2.1.1.  Democracy 

North Macedonia continued its efforts to strengthen democracy and the rule of law, including 
by  activating  existing  checks  and  balances  and  through  an  outreach  on  key  policy  and 
legislative  issues.  Opposition  parties  remained  actively  engaged  in  Parliament  and  on  some 
occasions  supported  key  EU  related  laws.  North  Macedonia  has  shown  its  commitment  to 
deliver in the key areas of the fundamentals, including through the ‘Europe at Home’ agenda 
and  the  ‘Action  Plan  21’  on  the  fight  against  corruption.  Measures  were  taken  to  protect 
public health and contain the COVID-19 pandemic. 

Elections  

The  first  round  of  the  local  elections  took  place  on  17  October  2021.  Overall,  the  legal 
framework  remains  conducive  to  the  organisation  of  democratic  elections.  Limited  progress 
was  made  in  addressing  the  outstanding  recommendations  from  the  OSCE/ODIHR  and  the 
Venice Commission  over the reporting period. The Electoral  Code was amended during the 
electoral  process 
the 
comprehensive review of the electoral legislation and the adoption of the relevant laws needs 
to be finalised in a timely, inclusive and transparent manner. The state institutions and bodies, 
notably the Ministry of the Interior and the State Election Commission, should make further 
efforts to systematically improve the accuracy of the voters’ lists. 

in  September  2021.  As  mentioned 

the  previous  reports, 

in 

The first  round of the  local  elections took  place  on  17 October.  In municipalities where no 
mayoral candidate receives the required absolute majority, the second round will be organised 
on  31  October  2021  between  the  two  candidates  with  the  most  votes.  OSCE/ODIHR  has 
deployed an Election Observation Mission. Overall, preparations for the local elections have 

8 

 
 
 
been  carried  out  in  line  with  the  calendar  of  the  State  Election  Commission  (SEC).  Some 
parties have announced cooperation agreements between them, including across ethnic lines. 
Among a total of 299 mayoral candidates, 8% are women. Women comprise some 45% of all 
councillor candidates and head 111 candidate lists (19%).  

The  legal  framework  supports  the  conduct  of  democratic  elections.  The  working  group  on 
electoral  reform  met  several  times,  but  it  has  not  yet  finalised  the  comprehensive  legal 
changes  in  line  with  OSCE/ODIHR  recommendations.  Its  work  was  conducted  without 
meaningful  participation  from  political  parties.  The  electoral  code  was  amended  twice  in 
2021. In April 2021, amendments were adopted to supplement provisions on biometric voter 
identification.  In  September  2021,  Parliament  amended  the  Electoral  Code  with  a  large 
majority.  Some  amendments  aim  to  address  previous  recommendations  of  OSCE/ODIHR, 
including on permanent composition and tenure of the SEC, safeguards against the misuse of 
public  resources,  campaigning  in  the  media,  deadlines  for  the  submission  and  review  of 
complaints.  However,  last  minute  changes  in  legislation  led  to  uncertainties.  The  reform  of 
electoral  legislation  should  continue  in  order  to  address  the  remaining  recommendations  of 
OSCE/ODIHR  and  the  Venice  Commission,  including  the  harmonisation  of  the  Electoral 
Code  internally  and  with  other  relevant  laws.  This  comprehensive  process  needs  to  be 
completed well in advance of the next elections, in a broad consultation process.  

Parliament  appointed  unanimously  the  members  of  the  State  Election  Commission  (SEC). 
Its  composition  and  tenure  of  mandate  were  addressed  by  the  latest  amendments  to  the 
Electoral  Code.  On  the  voters’  list,  further  efforts  are  needed  to  address  structural  issues 
related to the voter register, such as the lack of standardisation of address data, harmonisation 
and interoperability across institutions. 

Parliament  

The  work  of  Parliament  was  impeded  by  political  polarisation  compounded  by  COVID-19, 
which on occasions affected its ordinary functions. Efforts are needed to strengthen its role as 
a forum for constructive political dialogue, particularly on the EU reform agenda. Parliament 
continued  to  exercise  its  legislative  functions,  including  through  the  work  of  parliamentary 
committees. Great care should be taken in the use of fast-track procedures, which need to be 
limited  to  ensure  effective  scrutiny  and  consultation  of  legislation.  Parliament  continued  to 
exercise proper oversight of the executive. The proposals for the internal reform of Parliament 
agreed during the third round of the ‘Jean Monnet Dialogue’ in early 2020 have yet to be put 
in  place.  Criminal  responsibility  for  those  who  orchestrated  or  committed  violence  in  the 
attack  on  Parliament  on  27  April  2017  continued  to  be  established,  including  with  first 
instance verdicts. Steps were taken by some political parties to enhance their internal political 
process, but further efforts are needed, including by increasing the transparency of the funding 
of political parties.  

Parliament has remained the main institution for political dialogue, with the participation of 
all parliamentary parties. Implementation of Parliament’s 2018-2022 strategic plan continued. 
However,  its  work  was  challenged  by  the  polarisation  between  the  ruling  parties  and  the 
opposition  on  some  issues,  the  thin  ruling  majority  as  well  as  frequent  absences  of  the 
Members of Parliament (MPs) infected by COVID-19 or in self-isolation. A lack of quorum 
prevented  the  adoption  of  amendments  to  the  rules  of  procedure  to  allow  MPs  affected  by 
COVID-19 to  work online.  The National  Council for EU  Integration, led by the opposition, 
started working in  June 2021 and has a responsibility to  ensure a broad  consensus  over EU 

9 

 
 
related  reforms.  In  July  2021,  Parliament  adopted  with  cross-party  support  a  Resolution6, 
submitted  by  the  main  opposition  party.  Parliament  carried  out  a  transparent  selection  for 
members of the Commission for Protection and Prevention against Discrimination and elected 
unanimously the new members of the State Election Commission. The selection of three new 
judges  of  the  Constitutional  Court,  of  five  Deputy  Ombudspersons  and  of  a  member  of  the 
Judicial Council needs to proceed in a timely and inclusive manner.   

Parliament continued to face challenges in better planning and coordinating its work to ensure 
a more predictable law-making process. The adoption of some laws such as the package of 
economic  measures  designed  to  address  the  consequences  of  COVID-19  was  delayed.  To 
prevent filibustering, the government proposed numerous draft laws for adoption in shortened 
procedure,  which  reduced  the  time  for  a  substantial  consultation  process  with  the 
stakeholders.  The  opposition  criticised  the  use  of  the  ‘EU  flag’  procedure,  i.e.  a  fast  track 
procedure  aiming  at  aligning  legislation  with  the  EU  acquis.  A  total  of  six  public  debates 
were held. Parliament adopted 159 laws, out of which 67 in regular legislative procedure, 79 
in  shortened  procedure  and  13  ratifications.  The  number  of  laws  adopted  in  fast  track 
procedures  remains  a  concern  –  see  2.1.2.  Public  Administration  Reform.  These  need  to  be 
significantly  reduced  as  they  prevent  proper  participation  of  stakeholders  on  the  legislative 
processes and democratic debates.  

Parliament  exercised  its  oversight  of  the  executive  through  sessions  for  parliamentary 
questions. Over the reporting period, four motions of no confidence were introduced against 
four Deputy Prime Ministers and Ministers, of which two were rejected and two are pending. 
The plenary and relevant committees debated the annual reports of regulatory, controlling and 
supervisory bodies, including those submitted after the dissolution of Parliament in February 
2020. 

The  working  group  on  the  ‘Jean  Monnet  Dialogue’,  chaired  by  the  Speaker,  held  two 
meetings in spring 2021 to discuss the implementation of the commitments made during the 
third  round  of  the  ‘Jean  Monnet  Dialogue’  in  early  2020,  notably  amending  the  rules  of 
procedure. Little progress was made and these commitments have yet to be put in place.  

Under the new composition of Parliament, the number of women Members of Parliament (47 
out of 120, i.e. 39%) decreased by one compared to the previous legislature. The number of 
MPs from the non-majority communities is the highest ever (42, i.e. 35%). The Committee on 
Inter-Ethnic Relations held regular sessions. 

As regards the  protection of human rights and  fundamental  freedoms, Parliament adopted 
with cross-party support the Law on the prevention and protection against discrimination, the 
Law on prevention and protection from violence against Women and Domestic Violence and 
amendments to the Law on the rights of the child. The Club of Women MPs, and inter party 
parliamentary  groups  on  youth,  LGBTIQ,  people  with  disabilities  and  Roma  started  their 
work.  

The  accountability  for  the  violent  attacks  in  Parliament  in  April  2017  continued  to  be 
established.  In  July  2021,  the  first  instance  Criminal  Court  sentenced  to  imprisonment  the 
former Speaker, two former Ministers as well as the former Director of the Bureau of Security 
and Counterintelligence (UBK) for organising the violent attacks on Parliament.  

6 ‘Resolution on Determining the Macedonian State Positions in the Context of Blockages of the European 
Integrations’ 

10 

 
 
                                                           
 
Work  should  continue  on  improving  the  efficiency  of  the  democratic  system,  including 
transparency on the funding of political parties, along the lines of the recommendations of 
the  Group  of  States  against  Corruption  (GRECO)  –  see  Chapter  23  –  Judicial  and 
fundamental rights. Political parties should also improve their internal democratic processes. 
SDSM7 held the first-ever direct elections for a party leader.  

Governance 

The government worked on the EU reform agenda and on addressing the consequences of the 
COVID-19  pandemic.  It  needs  to  keep  up  the  reform  momentum  and  focus  on  the 
implementing  the  existing  legal  framework  rather  than  launching  sporadic  new  initiatives. 
Timely and substantial implementation of the reform agenda requires sustained support from 
society as a whole. Inter-ethnic relations remained stable. The Ohrid Framework Agreement, 
the 20th anniversary of which was celebrated in August 2021, continued to be implemented.  

In  March  2021,  all  62  coalition  Members  of  Parliament  confirmed  their  support  for  the 
government in a vote of confidence initiated by the Prime Minister. The government adopted 
the  reform  plan  ‘Europe  at  Home’,  aiming  at  streamlining  reforms  under  the  fundamentals 
cluster  and  based  on  the  revised  enlargement  methodology,  as  well  as  the  ‘Action  21’,  an 
action  plan  on  the  fight  against  corruption.  The  National  Plan  for  Adoption  of  the  Acquis 
(2021-2025) was adopted in June 2021. 

In  light  of  the  COVID-19  situation,  the  Prime  Minister  and  the  leader  of  the  biggest 
opposition party  agreed to  postpone the census  from  April to  September 2021 and the local 
elections from the first to the second half of October 2021.  

Women  constitute  20%  of  the  Ministers,  7%  of  the  Deputy  Ministers  and  25%  of  the  State 
Secretaries.  

Inter-ethnic relations remain stable overall. Further commitment is needed, both at the local 
and  the  national  level,  to  increase  trust  between  ethnic  communities.  All  political  actors 
should further engage in a constructive and open dialogue with relevant stakeholders to meet 
the obligations arising from the 2001 Ohrid Framework Agreement, including by preserving 
the  multi-ethnic  character  of  the  society.  In  August  2021,  the  country  marked  the  20th 
anniversary of the Ohrid Framework Agreement.  

The reform process of the system of local self-government launched in 2019 has stalled. The 
government should show active leadership, promoting coordination and a systemic dialogue 
between  ministries  and  local  self-government.  Efforts  to  improve  municipal  finances 
produced  mixed  results.  Revenue  collected  at  local  level  increased  as  a  percentage  of  total 
revenue  of  municipalities  and  transparency  of  local  budgets  improved.  Ad  hoc  financial 
transfers from the central to the local level provide short term relief but do not  contribute to 
build  a  sustainable  financial  framework  based  on  predictable  resources.  More  efforts  are 
needed  to  strengthen  public  finance  management  capacities  and  internal  audit  at  the  local 
level.  

Civil society  

Civil society organisations (CSOs) continue to operate, overall, in an enabling environment. 
They continued to be active and have an important role to play in the reform process. Further 
efforts are needed to ensure a more a timely, meaningful and transparent consultation process 
with  civil  society.  In  the  context  of  the  challenges  faced  in  recovering  from  the  COVID-19 
crisis,  governmental  and  non-governmental  actors  are  expected  to  build  long-term 

7 Social Democratic Union of Macedonia 

11 

 
 
                                                           
partnerships  and  to  strengthen  existing  cooperation.  The  financial  framework  under  which 
CSOs operate still needs to be improved. 

Civil society is a crucial component of any democratic system and continues to be recognised 
as such by the state institutions. 

Civil  society  organisations  continued  to  play  the  role  of  watchdog  and  participated  in  the 
decision-making process on key laws, including the laws on prevention and protection against 
discrimination and on prevention and protection against violence against women and domestic 
violence. Civil society significantly contributed to ensuring the protection of human rights and 
fundamental freedoms, especially with respect to assistance provided to the most vulnerable 
categories. 

Civil  society  engaged  on  a  regular  basis  with  public  institutions  and  bodies  such  as  the 
Council for Cooperation between the Government and Civil Society and the Council for Open 
Government  Partnership.  Continued  efforts  are  needed  to  further  strengthen  the  existing 
structured dialogue, coordinated by the government unit for cooperation with NGOs. 

Mechanisms  for  dialogue  such  as  the  inter-party  parliamentary  groups  and  the  sectoral 
working  groups  need  to  be  fully  exploited.  A  systematic  follow-up  of  exchanges  with  civil 
society  is  needed.  Actors  from  the  entire  political  spectrum  are  encouraged  to  enhance 
cooperation  with  civil  society,  based  on  a  timely,  meaningful  and  transparent  consultation 
process. Similarly, local authorities are encouraged to further involve grassroots civil society 
organisations in policy and decision-making processes. 

The  COVID-19  pandemic  had  an  economic  impact  on  civil  society  actors.  The  ongoing 
reform of the state funding for the civil society organisations is expected to further regulate 
the current legal framework and to ensure that sufficient means are put at the disposal of the 
sector. The process should be conducted in a transparent and inclusive manner. 

In order to maintain the positive trend, the government should finalise the 2021-2023 Strategy 
for  Cooperation  with  Civil  Society,  together  with  a  realistic  action  plan  to  implement  the 
measures programmed in the Strategy. All relevant institutions should ensure the transparent 
and timely implementation of the objectives included in the Strategy. 

Civilian oversight of the security/intelligence sector  

The reform of the intelligence sector, resulting in new structures being established and a legal 
framework being developed, has almost been completed. 

However,  the  National  Security  Agency  (NSA)  is  still  located  inside  the  premises  of  the 
Ministry  of  Interior.  The  Operational  Technical  Agency  (OTA)  continued  to  acquire  the 
necessary tools to fulfil its role. However, some authorised bodies have yet to be connected to 
the OTA. In January 2021, the Law on the Intelligence Agency was revised to harmonise its 
legal framework with the country’s new security system arrangements. It is essential that all 
these structures act according to the relevant laws and in an independent manner. 

Parliamentary oversight  of the intelligence services was exercised after the establishment of 
the new Parliament. The relevant  committees performed inspections in  the institutions  from 
the security sector. The procedure for the selection of technical experts for the Committee for 
Interception was completed. However, they have not been employed yet, which affected the 
performance of the committee’s oversight mandate.  

The work of the Civilian Oversight Council was impeded since the resignation of its president 
and  deputy  in  2020.  There  is  an  urgent  need  to  provide  all  necessary  administrative  and 
financial resources for the Council to be fully functional. 

12 

 
 
2.1.2  Public administration reform  

North  Macedonia is  moderately  prepared  in  the reform  of its public  administration.  Some 
progress was made in finalising the horizontal functional review of the state administration. 
Recommendations  were  made  for  the  new  organisation  of  state  administrative  bodies  with 
improved  lines  of  accountability.  These  need  to  feed  into  the  relevant  legislation,  which 
should be adopted and implemented. North Macedonia is currently reviewing the legislative 
framework  on  human  resources  management  through  the  revision  of  the  Law  on 
Administrative Servants and the Law on Public Service Employees, and is introducing a new 
Law on Top Management  Service.  The new framework should improve the management of 
human resources across  the administration and will  contribute to  ensuring better respect  for 
merit-based  recruitments,  promotions  and  dismissals,  including  at  senior  management  level. 
The monitoring reports on the implementation of the Public Administration Reform Strategy 
and  the  Public  Financial  Management  Reform  Programme  were  presented.  The  State 
Commission for the Prevention of Corruption (SCPC) continued to address cases of alleged 
nepotism,  cronyism  and  political  influence  in  the  process  of  recruitment  of  public  sector 
employees  and  in  the  process  of  appointment  of  members  of  supervisory  and  management 
boards.  Its  findings  and  recommendations  need  to  be  systematically  followed-up  by  the 
concerned institutions. 

Most of last year’s recommendations have been partially implemented. In the coming period, 
the country should, in particular:  

  adopt  and  implement  the  revised  Law  on  Administrative  Servants,  the  Law  on  Public 

Service Employees and the Law on Top Management Service; 

  adopt and implement the Law on State Organisation and other related laws in line with the 

recommendations for the new organisation of state administrative bodies ; 

  ensure full implementation of the Law on General Administrative Procedures. 

Strategic framework for public administration reform 

The  implementation,  monitoring  and  reporting  of  the  2018-2022  public  administration 
reform  strategy  and  the  2018-2021  public  financial  management  reform  programme 
continued.  The  high-level  Public  Administration  Reform  Council  and  the  Public  Financial 
Management Council ensured both political support for and supervision of reforms. To drive 
the process at the technical level, a properly staffed public administration sector is necessary 
within  the  Ministry  of  Information  Society  and  Administration.  The  Ministry  of  Finance 
continues  to  be  fully  involved  in  the  reform  coordination  efforts.  Overall,  managerial 
accountability in public institutions requires further strengthening (see Chapter 32 – Financial 
Control).  The  state  budget  includes  a  separate  programme  for  public  administration  reform, 
but full implementation of both strategies continues to depend primarily on donor funding. 

Policy development and coordination  

The legal framework and institutional structures for a coherent policy-making system are in 
place.  Efforts  are  ongoing  to  clarify  the  division  of  responsibilities  between  policy-making 
institutions to avoid overlaps, set out clear reporting lines and ensure their proper functioning. 
Medium-term  budgetary  planning  and  fiscal  policies  are  in  line  with  the  government’s 
strategic priorities. The central coordination and quality control role of the General Secretariat 
was slightly improved, but remains insufficient. The coordination system for EU integration is 
being  revised  to  match  the  revised  enlargement  methodology.  A  new  IT  solution  is  being 
developed to improve the technical level quality of the EU integration coordination system for 

13 

 
 
 
policy  measures  and  harmonisation  with  EU  regulations.  A  new  IT  system  for  donnor 
assistance measures was introduced. 

Evidence-based  policy  and  legislative  development  continue  to  be  partially  ensured. 
Administrative data collection further improved, but the quality of data remains an issue. The 
state  institutions  need  to  reinforce  and  simplify  sharing  of  administrative  data  through  the 
interoperability  system  and  use  this  data  more  consistently  in  the  decision-making  process. 
The  regulatory  impact  assessments  continued  to  be  used  formally  for  all  laws  that  the 
government sent to Parliament in regular procedure, but not for the laws that were adopted in 
shortened  procedure.  The  quality  of  regulatory  impact  assessments  needs  to  be  further 
improved  and  quality  control  needs  to  be  ensured.  The  budgetary  impact  assessments  are 
either missing or are not comprehensive. There  are inter-ministerial  consultations at  various 
levels, many of which take place online due to COVID-19 restrictions. Public consultations 
through the dedicated national electronic consultation system allow for inclusive participation 
of all stakeholders, however the electronic system is not used to its full potential. The quality 
control and the follow-up to the public consultation process needs to improve. The number of 
laws adopted under shortened procedures is still high, at 42% in 2020 (see 2.1.1. Democracy). 
The  quality  of  legislative  drafting  continues  to  be  an  issue,  with  frequent  legislative 
amendments creating legal uncertainty and impeding proper implementation. The use of ‘EU 
flag’ needs to be coherent and linked to laws, large part of which aim at being aligned with 
the EU acquis (see 2.1.1 Democracy). 

Public  scrutiny  of  government  work  is  ensured  through  the  publication  of  government 
monitoring reports and improved communication.  

Public financial management 

to 

implement 

The  national  authorities  continued 
the  2018-2021  public  financial 
management  (PFM)  reform  programme  and  the  2020  action  plan,  with  some  delays 
occurring,  including  due  to  the  COVID-19  crisis.  The  2021-2023  fiscal  strategy,  with 
prospects until 2025 aiming to enhance fiscal predictability, was adopted in December 2020 
together  with  the  2021  budget,  following  a  limited  public  debate.  The  strategy  is  not  yet 
sufficiently used as a tool in the preparation of the budgetary cycle. The government adopted 
the new Organic Budget Law in December, following public consultations, however it has not 
yet  been adopted  by Parliament. The new law covers a medium-term  budgetary  framework, 
improved  budget  classification,  a  fiscal  council  and  fiscal  rules.  Following  a  Public 
Investment Management Assessment (PIMA), the government adopted a national action plan 
for  the  implementation  of  the  PIMA  recommendations  in  December  2020.  A  co-ordination 
structure  has  to  be  established  involving  all  key  institutions  in  order  to  ensure  efficient 
implementation. 

The Ministry of Finance continued its efforts to improve transparency in the management of 
public  finances.  The  portal  ‘Open  Finance’  was  enhanced  by  providing  information  on 
transactions  made  by  municipalities.  In  addition,  the  Ministry  of  Finance  launched  a  new 
transparency tool on public debt. A ‘SMART’ public finance system was promoted as one of 
the  priorities  of  the  government.  Focus  was  put  on  replacing  traditional  budgeting  with 
performance budgeting and the introduction of multi-annual  budgetary  framework. SMART 
key performance indicators were defined in order to assess the achievement of objectives and 
implementation of results. As of October 2020, the Ministry of Finance started to publish data 
on the revenue and expenditure of public and state-owned companies on a quarterly basis as 
well as data on the execution of the local government budget. 

The publication of the 2021 Citizens’ Budget was delayed to February 2021. The Ministry of 
Finance  has  to  invest  further  efforts  in  increasing  public  inclusion  at  every  phase  of  budget 

14 

 
 
preparation, execution and reporting. In addition, the adoption and efficient implementation of 
the new Organic Budget Law as well as the foreseen development of an Integrated Financial 
Management  Information  System  (IFMIS)  will  contribute  to  an  increase  in  budgetary 
transparency. 

Public service and human resources management 

To  ensure  better  respect  for  merit-based  recruitment  and  promotion  and  have  in  place 
more  objective  criteria  for  dismissal,  North  Macedonia  is  currently  revising  the  two  major 
public  service  laws  on  Administrative  Servants  and  on  Public  Sector  Employees  and  is 
introducing a new Law on Top Management Service. The contradictory rules in the Law on 
Internal  Affairs,  which  allow  employees  to  be  excluded  from  the  provisions  of  the  Law  on 
Administrative  Servants,  are  still  in  force.  Procedures  for  temporary  or  service  employment 
contracts, with lower criteria, continue to be used frequently, bypassing the criteria set in the 
Law on Administrative Servants. The grounds for dismissals need to be more transparent. A 
number of top management positions were filled with persons in an ‘acting’ capacity for an 
extended  duration.  Many  of  the  managers  in  acting  positions  were  appointed  for  a  full 
mandate in the summer 2021. The State Commission for Prevention of Corruption continued 
to address cases of non-merit based appointments in 2020. The Commission issued a number 
of recommendations for the improvement of public sector recruitment procedures to eliminate 
nepotism, clientelism and cronyism, including for the appointment of managers and members 
of supervisory and management boards. See Chapter 23 – Judiciary and fundamental rights. 
These recommendations  are not  yet embedded in the respective legislation. The cooperation 
of  some  state  institutions  in  providing  data  or  following  up  on  the  Commission’s 
recommendations in individual cases is not sufficient. 

The Ministry of Information Society and Administration continues to coordinate and monitor 
the management of human resources across the public administration. The engagement and 
capacity  of  all  concerned  institutions  still  needs  to  be  increased  to  ensure  that  legislation  is 
applied  systematically  and  data  is  uploaded  regularly  in  the  human  resources  management 
application. Not all line institutions use the human resources management information system, 
whose potential could be further exploited. The remuneration system has yet to be revised to 
ensure  more  consistent  levels  of  pay  and  to  promote  mobility.  With  the  amendments  to  the 
law on 2021 budget execution, the amounts for salary supplements for number of institutions 
were  increased  sevenfold.  This  includes  the  21  institutions  at  central  level,  for  which  some 
criteria for awarding salary supplements was adopted. 

The  representation  of  women  in  the  public  service  remains  over  50%,  including  in  middle 
management.  Women  are,  however,  less  represented  in  top  management  positions.  The 
equitable  representation  of  minorities  is  inconsistent  across  the  public  sector  and  across  all 
categories  of  civil  servants.  A  special  law  was  adopted  to  transfer  to  various  institutions 
public employees, who were recruited years ago and continued to receive a salary without a 
formal  assignment  and  without  having  to  show  up  for  work.    As  of  July  2021,  more  than 
1,200  out  of  1,349  such  employees  were  assigned  with  new  jobs  in  237  different  state 
institutions.  Some  institutions  are  reluctant  to  take  over  these  employees  as  they  are 
transferred  to  positions  which  do  not  match  the  needs  of  these  institutions.  This  parallel 
recruitment procedure affects other institutions’ independence when selecting their employees 
according to institutions’ needs, following the requirements for equitable representation. The 
principle of fair representation of men, women and ethnic groups needs to be applied across 
the whole public sector.   

Professional development remains unsystematic. Many institutions offer specialised training 
to  their employees. Nevertheless, there is  no centralised database of all trainings offered by 

15 

 
 
various  institutions.  Adequate  regulations  on  integrity  in  the  public  service  are  in  place, 
including through whistle-blower legislation. However, there is no data on how the integrity 
mechanisms  are  implemented  in  practice,  nor  on  whether  and  how  whistle-blowers  are 
protected from retaliatory actions. 

Accountability of the administration 

framework,  eliminating  overlapping  competences  and  enhancing 

In  North  Macedonia,  the  new  Law  on  State  Organisation,  aiming  at  streamlining  the 
the 
institutional 
administration’s  efficiency,  has  yet  to  be  adopted.  The  functional  review  of  139  central 
government  institutions  was  completed.  During  the  reporting  period,  some  institutions 
reported to both their line ministry and to the government in parallel. Delegation of decision-
making  authority  to  middle  management  remains  limited  both  at  central  and  at  local  level. 
Continued  efforts  are  needed  to  efficiently  mainstream  managerial  accountability  across  the 
entire public administration (see Chapter 32 - Financial Control). 

The  protection  of  the  citizens’  right  to  good  administration  by  independent  institutions, 
especially  the  Ombudsman  and  the  State  Audit  Office,  is  provided  for  in  the  law.  A 
systematic  follow-up  to  their  recommendations  needs  to  be  ensured.  The  legal  framework 
safeguards the citizens’ right to access public information. All institutions need to regularly 
provide and update the data on their websites. New IT tools are in testing phase and allow the 
Agency for Protection of Free Access to Public Information to monitor compliance with the 
rules  on  proactive  disclosure  of  information.  This  reduces  the  grounds  upon  which  requests 
for public information can be refused. The Agency’s capacity to implement the new law was 
somewhat improved. All accrued appeals to the Agency were resolved. The COVID-19 crisis 
led to delays in responding to requests for public information by many institutions. 

The legal framework for the citizens’ right to administrative justice is in place. In practice, 
the  appeal  procedures  are  still  onerous,  complex  and  lengthy,  comprising  several  appeal 
layers  and  numerous  repetitions.  Most  of  the  decisions  are  not  based  on  merit  but  on 
procedural  considerations.  Enforcing  administrative  court  rulings,  which  were  themselves 
rarely decided on merit, continued to be delayed by the respective institutions. The legislation 
regulates  the  citizens’  right  to  seek  compensation  and  the  liability  of  public  authorities  in 
cases of wrongdoing.  

Service delivery to citizens and businesses 

The national e-portal for services is being upgraded in an attempt to make the administration 
more  user-oriented,  an  encouraging  development  given  the  importance  of  digitalising  the 
public  administration  and  strengthening  the  provision  of  online  services  to  citizens  and 
businesses  in  the  current  COVID-19  context.  State  institutions  must  demonstrate  more 
commitment  to  provide  services  through  the  national  e-portal  and  encourage  citizens  to  use 
the  e-portal  and  the  electronic  register  of  population  to  their  full  potential.  The  electronic 
register  of  population  will  also  be  used  to  crosscheck  census  data.  The  use  of  electronic 
signatures  for  services  to  citizens  and  companies  modestly  increased.  The  interoperability 
framework improved in scope, but political will and funding are needed for it to reach its full 
potential.  A  number  of  basic  key  services,  such  as  issuance  of  passports,  driving  licences, 
incurred  significant  delays  and  caused 
school  certificates,  registration  of  vehicles, 
dissatisfaction among citizens. 

No developments were made towards simplifying administrative procedures. The Law on 
General Administrative Procedures (LGAP) is still not systematically implemented across the 
administration  despite  the  recurrent  recommendations  of  the  European  Commission.  This 
creates legal uncertainty for the recipients of administrative services. Many legal deadlines set 

16 

 
 
in the LGAP were not respected due to the COVID-19 pandemic. The administration needs to 
reinforce training and awareness-raising for its employees to ensure legal certainty for citizens 
and businesses. 

2.2.  RULE OF LAW AND FUNDAMENTAL RIGHTS  

2.2.1  Chapter 23: Judiciary and fundamental rights  

The EU’s founding values include the rule of law and respect for human rights. An effective 
(independent,  quality and efficient) judicial system and an  effective fight  against  corruption 
are of paramount importance, as is the respect for fundamental rights in law and in practice.  

The country has some level of preparation / is moderately prepared to apply the EU acquis 
and  European  standards  in  this  area.  Overall,  some  progress  has  been  made,  including 
through strengthened judicial independence and addressing instances of police impunity. The 
implementation  of  the  judicial  strategy  continues,  including  the  Law  on  the  Public 
Prosecutor’s  Office,  ensuring  accountability  for  the  crimes  arising  from  and  related  to  the 
illegal wiretaps. The State Commission for the Prevention of Corruption, using its reinforced 
powers, continues to deliver results, including on high-level cases. Corruption is prevalent in 
many  areas and remains an issue of concern.  North Macedonia  continue  to  meet  its general 
obligations  on  fundamental  rights  but  there  are  challenges  in  implementing  the  existing 
legislation.  As  regards  the  legal  and  policy  framework,  the  new  Parliament  re-adopted  the 
Law on the Prevention and Protection against Discrimination, after  it had been struck down 
on  procedural  grounds  by  the  Constitutional  Court,  and  appointed  the  members  of  the 
Commission  for  the  Prevention  and  Protection  against  Discrimination.  The  Ombudsman’s 
Office  needs  an  increase  of  its  budget,  allowing  recruitment  of  specialised  staff,  in  order  to 
better  accomplish  its  role.  It  is  essential  to  complete  the  appointment  of  members  of 
independent  and  regulatory  bodies  based  on  merit.  The  functional  independence  of  these 
bodies must be guaranteed at all times, including through the appropriate financial resources.  

Functioning of the judiciary  

The  judicial  system  of  North  Macedonia  has  some  level  of  preparation/  is  moderately 
prepared. Some progress was achieved regarding the implementation of the judicial reform 
strategy,  thereby  further  addressing  the  recommendations  from  the  Venice  Commission  and 
the Senior Experts’ Group on systemic Rule of Law issues. Efforts are still needed to ensure 
systematic implementation of the updated action plan on the judicial reform strategy and the 
human  resources  strategies  for  the  judiciary  and  prosecution.  Judicial  institutions  continue 
applying the new rules for the appointment, promotion, discipline and dismissal of judges and 
prosecutors. Most of the implementing legislation of the revised Law on the Council of Public 
Prosecutors  was adopted.  It is  important  to  continue implementing the legal  framework  and 
strategic  plans  related  to  the  reform  of  the  Judicial  Council  and  the  Council  of  Public 
Prosecutors. Any new draft Law on the Academy for Judges and Prosecutors should maintain 
the Academy as the sole entry point to the judiciary and prosecution and should secure a fair 
and transparent access to these professions 

In the coming year, the country should, in particular:  

  step  up  the  consistent  implementation  of  the  judicial  reform  strategy  and  the  updated 
action plan, with a specific focus on adopting a new law on civil procedure, in line with 
the European standards; 

  implement  the  human  resources  strategies  for  the  judiciary  and  public  prosecution 

network, use them as an indicator for projections on next recruitments;  

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  improve the automated court case management information system (ACCMIS) to ensure 

that it is fully functional and reliable. 

Strategic documents 

Implementation of the Strategy on Judicial Reform (2017-2022) has continued. The Council 
for  Monitoring  the  Implementation  of  the  Judicial  Reform  approved  the  bi-annual 
implementation  report  for  2019  and  2020.  The  implementation  of  the  updated  Action  Plan 
adopted in October needs to be stepped up. The long awaited strategies for Human Resources 
Management in the courts and in the Public Prosecutor’s Offices were adopted in November 
2020 and December 2020 respectively with relevant action plans for their implementation.  

Management bodies 

In December 2020, Parliament elected a new member of the Judicial Council. The election 
of  another  member  of  the  Judicial  Council  has  been  pending  since  July  2021.  The  Council 
elected its new president in April 2021 from among its lay members, in line with the Law on 
Judicial  Council.  The  Judicial  Council  adopted  several  documents,  in  order  to  ensure  its 
effective  activity:  a  Strategic  Plan  2020-2022;  a  Plan  for  Strategic  Communication; 
methodologies for qualitative assessment of judges and of presidents of courts; and an Internal 
Plan  for  the  assessment  of  the  courts,  judges  and  presidents  of  courts  in  2021.  The 
methodology  for  determining  the  complexity  of  court  cases,  by  analysing  the  indicative 
number of cases to be addressed each month by a judge, was adopted in September 2021. The 
Council  needs  to  maintain  its  role  as  a  guardian  of  the  independence  and  impartiality  of 
judges, and to build on its efforts to operate in a transparent manner.  

In  December  2020,  Parliament  elected  two  new  members  of  the  Council  of  Public 
Prosecutors.  The  Council  adopted  rules  for  monitoring  the  performance  of  the  work  of  the 
Public Prosecutor’s Offices. The Strategic Plan 2021-2023 was adopted in August 2020. The 
Council should provide reasoning for its decisions, and ensure regular access of the media to 
its  sessions.  The  Council  received  a  budget  allocation  equivalent  to  EUR  320000  but  still 
lacks the human and IT resources to perform its tasks effectively.  

Independence and impartiality  

Judicial independence is enshrined in the Constitution. The commitment to the full respect of 
the  principle  of  independence  of  judiciary  as  well  as  increased  transparency,  notably  in  the 
work of the Council for Public Prosecutors, needs to continue. It is important to ensure that 
the  judiciary  is  shielded  from  any  risk  or  perception  of  undue  external  interference.  The 
Association  of  Judges  and  the  Judicial  Media  Council  actively  promoted  strengthening 
transparency as one of the tools to restore public trust in the judiciary. 

The  proceedings  in  the  so  called  ‘racket  case’  continue.  In  July  2021,  the  Skopje  Court  of 
Appeals  rejected  as  unfounded  the  appeal  of  the  defendant,  the  former    Special  Prosecutor, 
and  upheld  the  first  instance  conviction  verdict.  Public  trust  in  the  judicial  system  will  be 
enhanced  by  handling  and  finally  closing  the  trial  cases  of  the  former  Special  Prosecutor’s 
Office (SPO). 

The  sustainability  of  the  former  SPO’s  work,  in  ensuring  the  accountability  for  the  crimes 
arising from and related to the wiretaps, was enforced by the implementation of the Law on 
the Public Prosecutor’s Office. The provisions of the law have to be properly implemented, in 
order  to  ensure  a  professional  and  impartial  prosecutorial  system,  more  resilient  to  risks  of 
external interference.  

The Law on Case Flow Management in the courts entered into force on February 2020. The 
provisions  of  the  law  regulate  the  automatic  and  random  distribution  of cases  in  the  courts, 

18 

 
 
through the automated court case management information system (ACCMIS). In October 
2021, the Court of Appeal  in  Skopje upheld  the  first  instance judgement  against the former 
president  of  the  Skopje  Criminal  Court  for  manipulation  of  ACCMIS.  The  alleged 
wrongdoings were revealed during inspections, which were suspended due to COVID-19 and 
resumed  in  2021.  Full  implementation  of  the  law  depends  on  the  decision  to  upgrade  the 
current  software  or  to  develop  a  new  one.  Continued  commitment  is  needed  to  ensure  the 
system’s  capacity  to  produce  automatically  reliable  statistical  data,  in  line  with  the 
recommendations  and methodology of the CEPEJ, on the performance of both  the judiciary 
and the prosecution. 

Accountability 

The  Council  for  Judicial  Ethics  has  met  six  times  since  February  2020.  The  initial  training 
programme at  the Academy for Judges  and Prosecutors for 2020/21  includes  27 lectures  on 
ethics, business culture and deontology.  

to  determine 

the  responsibility  of  a 
The  Judicial  Council  received  140  requests 
judge/president of court in 2020. Since June 2020, the Judicial Council has dismissed  seven 
judges  including  a  former  president  of  the  Supreme  Court.  The  general  reason  provided  for 
the dismissals  is  related  to  unprofessional  performance. The Judicial  Council established its 
Commission  tasked  to  prepare  an  Action  Plan  for  monitoring  corruption  in  the  judiciary  by 
determining specific target groups, methods of monitoring, indicators and timelines. In 2020, 
the State Commission for the Prevention of Corruption issued misdemeanour payment orders 
against  15  judges  or  presidents  of  courts  and  10  prosecutors  (from  the  former  Special 
Prosecutor’s Office) for failing to submit asset declarations or reports on change of property 
status and interest. 

Professionalism and competence  

The  Judicial  Council  started  to  apply  the  new  methodology  for  professional  evaluation  in 
view of appointments and promotions.  In  February 2021, the Judicial  Council elected the 
President of the Supreme Court.  Since June 2020, the Judicial  Council has  appointed  seven 
judges and eight Presidents of courts, and allowed 18 retired judges to perform their tasks for 
an additional year. In April 2021, it recruited the remaining six graduates of the Academy for 
Judges and Prosecutors. The Council of Public Prosecutors appointed five prosecutors each in 
the  Higher  Public  Prosecutor’s  Office  Skopje  and  in  the  Public  Prosecutor's  Office  for 
Prosecuting  Organised  Crime  and  Corruption  (OCCPO),  and  heads  of  two  Basic  Public 
Prosecutor’s  Offices.  The  Academy  for  Judges  and  Prosecutors  organised  130  in-service 
training sessions for 2,858 professionals. 

Quality of justice  

A  proposed  draft  Law  on  the  Academy  for  Judges  and  Prosecutors  should  maintain  the 
Academy as the sole entry point to the judiciary and prosecution, secure a fair and transparent 
access  to  these  professions,  and  must  follow  the  recommendations  of  the  2018  peer  review 
mission  on  judicial  training  and  address  European  Commission’s  concerns  about  possible 
limited  restructuring  of  initial  training.  The  first  ever  Deputy  Director  of  the  Academy  was 
elected in March 2021. The training of 60 students of the seventh intake started in September 
2020. The selection of 97 candidates of the eighth intake is still ongoing. The Academy is an 
observer  to  the  European  Judicial  Training  Network  (EJTN)  and  it  started  to  be  more  pro-
active in benefiting from the expertise of the network. The 2021 budget of the Academy saw 
an increase of approximately 35%. Three new employees were recruited in 2021. 

The Supreme Court and the four Courts of Appeal have continued their efforts to improve the 
consistency of judgements and to harmonise court practices. 

19 

 
 
According  to  the  European  Commission  for  the  Efficiency  of  Justice  (CEPEJ),  the 
implemented judicial system budget for 2020 was EUR 40 million. This amounts to EUR 19.5 
per  inhabitant,  which  is  less  than  the  Western  Balkans  median  of  EUR  37,  8.  The  Judicial 
System  Budget  (the  budget  for  courts,  public  prosecution  services  and  legal  aid)  has 
decreased by -8,3% since 2019.  

At the end of 2020 there were 493 judges,  (23  per 100 000 inhabitants) 61% female judges  
and 187 prosecutors (nine per 100 000 inhabitants), 55% female prosecutors. Compared with 
2019, there is a slight decrease in the number of judges and prosecutors for 2020. It remains 
essential  to  ensure  an  adequate  assessment  of  staffing  needs,  notably  in  the  prosecution 
services,  based  on  timely  implementation  of  the  adopted  human  resources  strategies  for  the 
courts  and  Public  Prosecutors'  Offices.  Implementation  of  the  IT  strategy  in  the  judiciary 
remains predominantly funded by donors. Initial considerations for the digitalisation of all 34 
courts  will  require  the  engagement  of  additional  IT  staff,  a  challenging  task  due  to 
uncompetitive salaries on offer for such tasks in the public sector. 

Permanent efforts are needed to promote the use of alternative dispute resolution including 
for commercial cases. In 2020, the number of mediation cases rose by 55% compared to 2019. 

Efficiency 

Nearly  all  courts  continued  a  positive  trend  by  maintaining  a  clearance  rate  of  100%.  The 
number  of  unfinished  cases  under  the  old  procedural  laws  decreased  further.  The  Venice 
Commission  recommendations  to  re-examine  the  provisions  of  the  Law  on  the  Use  of 
Languages related to bilingualism in judicial proceedings have not yet been addressed. Judges 
have  yet  to  receive  all  the  supplements  to  their  salaries,  while  claims  in  the  judicial 
administration,  including  for  career  advancement,  are  still  pending.  The  overall  cost  and 
duration  of  enforcement  procedures  should  be  addressed  at  all  points  of  the  enforcement 
chain.  In  October  2020,  the  Association  of  Judges  prepared  a  detailed  protocol  for  the 
implementation of Protection Measures in Courts concerning the COVID-19 pandemic. The 
protocol aims to protect the health of court employees and of all citizens who exercise their 
rights before the court.  

Fight against corruption  

North Macedonia has some level of preparation / is moderately prepared in the prevention 
and  fight  against  corruption.  Some  progress  has  been  made  as  the  country  continued  to 
consolidate its track record on investigating, prosecuting and trying several corruption cases, 
including  at  high  level,  and  strengthened  its  institutional  framework,  especially  the  State 
Commission  for  Prevention  of  Corruption  (SCPC)  and  the  Prosecutor  for  Organised  Crime 
and  Corruption  (OCCPO).  In  April  2021,  Parliament  adopted  the  2021-2025  National 
Strategy  for  the  Prevention  of  Corruption  and  Conflict  of  Interest  and  related  Action  Plan, 
consolidating the country’s commitment to prevent corruption and sanction corrupt behaviour. 
The  cases  initiated  by  the  former  Special  Prosecutor’s  Office  (SPO)  continued  to  move 
forward, thereby establishing accountability for the illegal wiretaps. A number of cases were 
subject  to  first  instance  rulings  and  new  cases  were  opened  on  the  basis  of  investigative 
material  from  the  former  Special  Prosecutor’s  Office.  The  State  Commission  for  the 
Prevention  of  Corruption  has  been  pro-active  in  preventing  corruption  and  opened  several 
cases,  including  against  high-level  officials.  The  State  Commission  was  allocated  new 
premises.  Nonetheless,  the  efforts  to  improve  its  functioning  should  continue,  especially  by 
allocating extra funding for the recruitment of expert staff. 

In the coming year, the country should, in particular:  

20 

 
 
  continue the efforts to fight corruption by increasing the support  for the relevant bodies, 
implementing  the  National  Strategy  for  the  Prevention  of  Corruption  and  Conflict  of 
Interests and providing clear policy guidance to state institutions; 

  ensure that proper resources are allocated to the Office of the Basic Public Prosecutor for 
Organised  Crime  and  Corruption  in  order  to  ensure  the  efficient  accountability  for  the 
crimes arising from and related to the wiretaps as well as for new high-profile corruption 
cases; 

  continue  to  increase  the  track  record  of  convictions  in  high-level  corruption  cases, 
followed by confiscation of criminal assets, building upon last years’ positive results. 

Track record 

Progress  in  investigating,  prosecuting  and  trying  corruption  cases  has  continued,  including  
high-level  corruption  cases,  despite  the  fact  that  the  hearings  slowed  down  because  of 
COVID-19.  In  addition,  new  high-level  corruption  cases  were  opened.  The  cases  of  the 
former Special Prosecutor’s Office continued to be tried mostly under the Public Prosecutor 
for Organised Crime and Corruption. So far, there have been final convictions in seven cases 
against 17 defendants. Trials are ongoing for most of the remaining cases, with several dozen 
hearings  having  taken  place  throughout  the  year.  The  statute  of  limitations  was  reached  for 
some charges against one defendant in one case, while other cases had to restart, because of 
the inconsistency of the proceedings. First-instance verdicts have been issued in nine cases. 
The  Courts  issued  39  imprisonment  sentences  including  against  prominent  former 
government officials such as a former Prime Minister, former Minister of Transport, former 
Minister  of  Interior  and  former  Director  of  the  Bureau  of  Security  and  Counterintelligence 
(UBK). Three of those found guilty remain at large.  

In February 2021, the Court ruled in first instance on the former Special Prosecutor’s Office 
‘Monster’  and  ‘Target-Fortress’  cases.  In  the  ‘Monster  case’,  the  court  ordered  life 
imprisonment  for  three  defendants,  who  were  found  guilty  of  terrorism,  and  ordered  prison 
sentences  of  15  and  9  years,  respectively,  to  two  others,  accused  of  the  murder  of  four 
teenagers and a fisherman near the Smiljkovci Lake, in Skopje in 2012.  

In a core case brought by the former Special Prosecutor’s Office called ‘Target-Fortress’, the 
court found the defendants guilty of abuse of official position, conducting illegal wiretapping 
of over 4,200 telephone numbers of citizens and illegally destroying the equipment used for 
these activities in an attempt to destroy evidence. A former UBK director was sentenced to 12 
years  in  prison,  the  former  Head  of  Cabinet  to  six  years  in  prison  and  former  Minister  of 
Interior to four years in prison. Two former police officials who are  currently at large, were 
given 15 years in prison in absentia. A former Head of Department at the Ministry of Interior, 
was  given  three  years  in  prison.  The  remaining  five  defendants  (UBK  employees)  were 
sentenced to two year suspended prison sentences. 

In April 2021, the Court ruled in another case of the former Special Prosecutor’s Office called 
the ‘Treasury Case’ and sentenced the former director of the UBK to eight years in prison, a 
former head of the fifth UBK directorate, to 15 years in prison in absentia; a former chief of 
staff  to  five  years  in  prison;  the  former  assistant  of  the  Minister  of  Interior  to  five  years  in 
prison. They were charged with abuse of office and causing damage to the state budget in the 
amount  of  over  862,000  euros  for  the  procurement  of  electronic-communication  equipment 
and training for its use.  

21 

 
 
In  July  2021,  the  Criminal  Court  froze  the  assets  and  accounts  of  the  former  Government 
Secretary  General  and  extended  his  house  detention  until  September  2021.  The  initial 
assessment of the fraud against the state budget is EUR 290,000.  

The Office of the Public Prosecutor for Prosecuting Organised Crime and Corruption, on the 
basis  of  the  Special  Prosecutor  investigations  and  pre-investigations,  opened  one  new  case 
and filed several indictments against high officials. 

In 2020, the Public Prosecutor for Prosecuting Organised Crime and Corruption opened 
investigations  into  14  cases  of  alleged  corruption  against  49  suspects  (10  high  profile 
investigations  involving  55  individuals  in  2019).  Investigations  are  ongoing  against  35 
individuals regarding alleged abuse of official positions and against 14 individuals on alleged 
money  laundering.  Indictments  were  filed  in  ten  cases  against  28  individuals  and  one  legal 
entity. Trials are ongoing in 36 cases against 189 individuals. 50 individuals were convicted 
in  eight  first  instance  judgments  (first  instance  judgements  against  7  individuals  in  2019). 
Two individuals were convicted in two second instance judgements.  

In  2020,  following  financial  investigations  of  the  Ministry  of  Interior,  criminal  charges  for 
corruption  were  brought  in  two  cases  where  temporary  measures  regarding  the  disposal  of 
immovable  property  were  adopted.  In  three  cases  valuable  assets  were  confiscated  after  the 
first instance judgements.  

The State Commission for the Prevention of Corruption (SCPC) has continued to be pro-
active  in  preventing  corruption  and  opened  several  new  cases.  In  regard  to  allegations  of 
conflict of interest, in 2020, the SCPC processed a total of 86 cases, out of which six were 
initiated by the SCPC itself and 80 upon the request of other parties. In 2020, a total of 149 
cases  were  closed  (40  in  2019),  out  of  which  116  dating  from  2019  and  33  from  2020.  In 
2021, a conflict of interest was established in eight cases. Six cases were resolved upon follow 
up  by  institutions/individuals.  In  seven  cases,  the  SCPC  found  grounds  for  suspicion  of 
violation of the provisions of the Law on the Prevention of Corruption and Conflict of Interest 
(LPCCI)  as  a  result  of  which  it  submitted  initiatives  to  determine  responsibility  to  the 
competent authority. In two cases, the suspects were dismissed from their institutions. A total 
of 47 cases were established based on 47 requests for opinions. In regard to violations of the 
LPCCI provisions on conflict of interest, the SCPC issued 20 misdemeanour payment orders. 
The SCPC also submitted five requests to initiate misdemeanour proceedings against officials 
to the SCPC Misdemeanour Commission, due to non-execution of payment after issuance of 
payment  orders.  In  2020,  the  SCPC  submitted  six  indications/recommendations  to  various 
institutions  in  cases  where  there  was  a  suspicion  of  potential  conflict  of  interest.  As  of  24 
August 2021, 7,672 asset declarations are accessible on the SCPC website (7275 in 2019). On 
irregularities in asset declarations, in 2020, 73 misdemeanour payment orders were issued by 
the  SCPC,  out  of  which  60  were  related  to  non-submission/untimely  submission  and  13  to 
failure to report an increase in property. 16 requests to initiate misdemeanour procedures were 
submitted  to  the  SCPC.  In  regard  to  corruption  cases,  in  2020,  a  total  of  418  cases  were 
initiated, 12 on the own initiative of the SCPC and 406 based on reports submitted by third 
parties. 378 cases were resolved. Out of the cases submitted on the basis of reports, the SCPC 
found  ground  for  suspicion  of  violation  of  the  criminal  code  in  two  cases  and  submitted 
initiatives to the public prosecutor (2 cases in 2019). The SCPC instigated initiatives before 
the competent authorities to determine the responsibility of officials in 11 cases.  

According  to  the  2020  Council  of  Europe  Group  of  States  against  Corruption  (GRECO) 
activity  report,  North  Macedonia  implemented  52%  and  partially  implemented  40%  of  the 
recommendations.  Twelve  of  the  implemented  recommendations  regarded  judges,  six 
regarded  prosecutors  and  seven  members  of  Parliament.  According  to  the  2021  GRECO 

22 

 
 
Compliance  Report  to  the  fifth  evaluation  round,  four  recommendations  were  met  and  nine 
recommendations were partially met. These concerned the introduction of integrity checks for 
government  advisers,  increased  transparency  of  police  by  enhancing  access  to  information, 
the conducting of a study on post-employment activities of police employees and complaints 
against police staff being reflected in comprehensive statistics.  

The adoption of a code of conduct for ‘persons entrusted with top executive functions’ from 
the central government was welcomed in the report. However, placing the implementation of 
the  code  of  conduct  in  the  hands  of  a  Deputy  Prime  Minister  was  considered  incompatible 
with  GRECO  practice,  because  the  Deputy  Prime  Minister  could  at  the  same  time 
investigate/sanction violations and provide confidential counselling on the code. 

Concerns were also raised regarding the substantial number of cases of conflict of interest and 
asset  disclosure  involving  top  executive  functions  processed  by  the  SCPC.  Most  of  the  ten 
non-implemented recommendations regarded the police. 

Institutional framework 

In 2020, the government appointed a Deputy Prime Minister responsible for anti-corruption, 
sustainable  development  and  human  resources.  The  Deputy  Prime  Minister  is  tasked  with 
coordinating  the  anticorruption  policies  and  the  institutions  involved  in  the  fight  against 
corruption.  In  March  2021,  the  government  adopted  an  anti-corruption  action  plan  titled 
‘Action  21’  with  priorities  and  measures  related  to  digitalisation,  the  functioning  of  the 
investigation  centres,  the  increased  use  of  the  National  Interoperability  Platform  and 
amendments  to  anticorruption  legislation.  In  January  2021,  the  Ministry  of  Interior  also 
developed its own anti-corruption programme aimed at  ensuring the integrity of employees, 
inter-institutional co-operation and fostering public trust. 

Preventive measures 

The  State  Commission  for  the  Prevention  of  Corruption,  appointed  in  February  2019, 
reinforced its capacity to verify statements of interest and assets and to initiate misdemeanour 
procedures.  The  State  Commission  finally  received  appropriate  new  premises.  Its  resources 
now need to be further consolidated and supplemented, in particular, through the provision of 
expert staff. 

A new Code of Ethics for members of the government and public office holders appointed by 
the government was adopted in 2020 and amended in 2021. Efforts continue to improve the 
transparency  of  public  institutions.  The  new  National  Strategy  for  the  Prevention  of 
Corruption  and  Conflict  of  Interest  systematises  measures  in  public  procurement  and 
employment in the public as well as other sectors. 

Law enforcement 

The  main  institutions  dealing  with  law  enforcement  are  the  Public  Prosecutor's  Office  for 
Prosecuting Organised Crime and Corruption within the Public Prosecutor's Office (OCCPO) 
and the Department for Serious and Organised Crime within the Ministry of the Interior. The 
OCCPO  inherited  most  of  the  former  Special  Prosecutor’s  Office  (SPO)  high-profile  cases 
and also deals with organised crime, often related to the smuggling of migrants. The OCCPO 
was allocated new premises, although it has not moved yet. 

The State Commission for the Prevention of Corruption, the State Audit Office and the other 
institutions with competences in fighting corruption need an appropriate allocation of resource 
in order to be able to pursue high-profile cases. One of these key resources is represented by 
additional prosecutors, their appointment being  described as a matter of  urgency in  the new 
Public  Prosecutor  Law.  Five  new  prosecutors  were  appointed  in  April  2021.  The  newly 

23 

 
 
established  investigative  centre/judicial  police  in  the  Prosecutor’s  office  still  needs  to 
demonstrate its capacity to support the office by increasing its investigations. 

In  2020,  accounts  were  frozen  in  one  case,  while  in  two  cases  temporary  measures  were 
adopted  to  prohibit  the  use,  alienation  or  disposal  of  real  estate.  Three  cases  of  alleged 
corruption  were  opened  and  assets,  including  money  and  luxury  goods,  were  confiscated 
following a first instance verdict. Between January and March 2021, movable and immovable 
property, as well as shares of significant value, were frozen in one case. 

Legal framework 

The  country  is  part  of  all  international  anti-corruption  conventions,  including  the  United 
Nations Convention against Corruption.  

The  Law  on  the  Financing  of  Political  Parties  stipulates  how  financial  means  can  be 
provided to political parties and managed correctly. The Electoral Code sets out the rules on 
the financing of electoral campaigns. The State Audit Office (SAO) exercises ex-post control. 
In 2020, according to SAO, 13 political parties failed to submit within the legally prescribed 
deadline one or all of the three types of financial reports – annual accounts, annual financial 
reports and reports from the register of donations received for 2019. A procedure was initiated 
before the Ministry of Justice  and a measure of  suspension  of payment of funds for  regular 
annual financing was pronounced. In 2020, audits of the financial statements for the regular 
operation  of  four  political  parties  as  well  as  audits  of  the  financial  statements  of  all  15 
organisers of electoral campaigns for the 2020 early parliamentary election were performed. 
According  to  a  new  systematisation,  the  SAO  established  a  new  sector  with  competence  to 
audit political parties, the State Commission for Prevention of Corruption, the State Election 
Commission and the Agency for Audio and Audiovisual Media Services. 

The  Law  on  free  access  to  public  information  allows  information  to  be  obtained  on  the 
public financing of political parties. 

The  2008  Law  on  lobbying  regulates  lobbying  activities,  the  registration  of  lobbyists  and 
includes  a  supervision  mechanism.  A  new  Law  on  lobbying    was  adopted  by  Parliament  in 
June 2021. The law extends the competences of the SCPC adding the responsibility to keep a 
register  of  lobbyists  and  lobbying  organisations.  The  Law  on  the  Protection  of  Whistle-
blowers  still  needs  to  be  further  aligned  with  the  EU  acquis.  Recommendations  for 
harmonisation of the Law with the EU Directive 2019/1937 were provided in the framework 
of an EU funded project.  

Strategic framework 

The National Strategy for the Prevention of Corruption and Conflict of Interest (2021-2025) 
and the related  Action Plan is  the main reference document. The strategy  was drafted in  an 
inclusive process, involving relevant stakeholders and experts. It was adopted by Parliament 
in April 2021. 

Fundamental rights  

The legal framework on the protection of fundamental rights is largely in line with European 
standards.  The  Law  on  the  Prevention  and  Protection  against  Discrimination  and  the 
Commission  for  the  Prevention  and  Protection  against  Discrimination  are  in  place.  The 
deinstitutionalisation  process  made  real  progress  and  most  of  the  children  concerned  were 
resettled to community-based care. The Ministry of Labour and Social Policy is investing in 
community  services,  including  supporting  victims  of  gender-based  violence.  Important 
progress  was  achieved,  with  the  adoption  of  the  Law  on  Prevention  and  Protection  from 
Violence against Women and Domestic Violence, with cross-party support. An improvement 

24 

 
 
is  noted  in  gender  mainstreaming  and  respect  for  women’s  rights,  although  women  are  part 
among  categories  most  severely  affected  by  the  pandemic.  Recommendations  of  European 
and  international  human  rights  bodies,  particularly  regarding  the  treatment  of  detained  and 
convicted  persons  must  be  fully  implemented  without  delay.  It  is  also  important  for  the 
country to  enhance the implementation of the legislation on hate speech  and of the national 
action  plan  for  the  implementation  of  the  Istanbul  Convention’s  provisions.  The  civilian 
external  oversight  mechanism  over  the  police  is  not  fully  functional,  and  the  absence  of 
genuinely  independent  investigators  impedes  addressing  police  impunity  and  effective 
prosecution.  The  country  should  continue  to  improve  the  situation  in  prisons  and  to  further 
increase alternatives to detention.  

In the coming year, the country should, in particular:  

  implement  all  the  provisions  of  the  Law  on  the  Prevention  and  Protection  against 
Discrimination,  and  allocate  the  necessary  resources  enabling  the  Commission  for 
Prevention and Protection against Discrimination to become fully functional;  

  address  in a prompt  and more systematic  manner the recommendations  of international 
monitoring  bodies,  especially  with  regard  to  the  rights  of  persons  in  detention/prison; 
promote,  protect  and  guarantee  rights  of  persons  in  a  disadvantaged  or  marginalised 
situations; 

  further  improve  the  quality  of  community  services  to  identify  children  at  risk  and  to 
provide adequate support to vulnerable categories of children, especially children victims 
of violence, Roma  children and children with disabilities. 

North  Macedonia  has  ratified  most  international  human  rights  instruments.  In  October 
2020,  the  country  informed  the  Committee  on  the  Elimination  of  Discrimination  against 
Women (CEDAW) of the measures to implement the recommendations contained in the Sixth 
Periodic Country Report.  

In  2020,  there  were  320  applications  pending  before  the  European  Court  for  Human 
Rights.  The  ECtHR  found  violations  of  the  European  Convention  on  Human  Rights  in  14 
cases (against nine in 2019), relating mainly to the right to a fair trial, protection of property, 
respect  for  private  and  family  life,  and  the  prohibition  of  torture.  According  to  CEPEJ,  11 
cases  were  considered  as  closed  after  a  judgement  of  the  ECtHR,  and  the  execution  of 
judgements process (against 26 in 2019). 

The  Ombudsman  Office  remains  the  central  body  for  the  promotion  and  protection  of 
human rights. The appointment of the new Ombudsman in January 2021 raised concerns due 
to the political affiliation of the selected candidate. Five Deputy Ombudspersons need to be 
appointed  by  Parliament.  The  Ombudsman’s  Office 
reports  and 
recommendations  on  online  education,  the  rights  of  children,  persons  with  disabilities  and 
those in custodian-type institutions during the COVID-19 pandemic. The budget of the Office 
increased by 2.3% compared to 2019 and there were no additional recruitments. Out of 2,448 
complaints  received  in  2020,  the  highest  number  again  concerned  the  judiciary  (notably 
bailiffs),  followed  by  labour  relations,  consumers  rights,  detention  conditions,  social 
protection  and  property  rights.  The  institutions  responded  to  63%  of  the  Ombudsman’s 
recommendations, which is a decrease compared to previous years.  

issued  special 

The government continued to be committed to improving the prevention of torture and ill-
treatment and to have a regular dialogue with the European Committee for the Prevention of 
Torture  (CPT)  on  its  recommendations.  The  latest  CPT  reports  were  published  on  11  May 
2021  and  on  27  July  2021.  Many  of  the  past  recommendations  by  the  Committee  are 

25 

 
 
outstanding and progress in their implementation remains slow. The main shortcomings of the 
prison  system  remain:  the  poor  management  and  performance  of  staff,  low  staffing  levels, 
poor  quality  of  health-care  provided  to  inmates,  inter-prisoner  violence,  squalid  material 
conditions and endemic corruption. 

The  external  oversight  mechanism  for  the  police,  including  the  prison  police,  is  not  fully 
functional, as the three civil society organisations’ representatives selected in December 2019 
did not join the Department of the Ombudsman's Office. Outstanding issues for the effective 
participation  of  civil  society  representatives  must  be  resolved,  including  extension  of  their 
one-year mandate. Only two investigators were assigned to the dedicated section in the Public 
Prosecutors’  Office  for  Organised  Crime  and  Corruption.  In  2020,  the  Ombudsman’s  civil 
control  mechanism  acted  upon  21  complaints,  14  against  police  officers  and  seven  against 
members  of  the  prison  police.  It  submitted  a  total  of  ten  requests  (eight  concerning  police 
officers and two members of the prison police) to the Public Prosecutor’s Office to initiate a 
procedure  for  determining  criminal  responsibility.  This  led  to  two  indictments  against 
members of the police for the criminal offences of harassment in the performance of duty and 
torture and other cruel, inhuman treatment or punishment. The dedicated section in the Public 
Prosecutors’ Office opened 80 new cases against 143 persons with police powers or members 
of  the  prison  police  upon  suspicion  of  having  committed  criminal  offences.  As  a  result  of 
investigations,  ten  indictment  proposals  and  four  criminal  orders  proposals  were  submitted, 
one  police  officer  was  indicted,  and  first-instance  verdicts  against  ten  persons  (four 
imprisonment  sentences  and  six  suspended  sentences)  were  issued  in  2020.  Cooperation 
between  the  main  actors  should  intensify.  Further  awareness-raising  of  this  mechanism, 
including  with  judges,  law  enforcement  and  legal  professionals  is  still  required  to  ensure  a 
good understanding of the system. 

Safeguards  against  ill-treatment  by  police  and  regular  trainings  of  law  enforcements  agents 
must  be  implemented  systematically,  and  reported  cases  must  be  thoroughly  investigated. 
Cooperation  with  civil  society  organisations  in  the  fight  against  ill-treatment  has  increased 
with  the  signature  of  a  memorandum  of  cooperation  with  the  Directorate  for  Execution  of 
Sanctions,  in  February  2020,  and  the  Ministry  of  Interior  in  March  2021.  In  2020,  the 
Department for Internal Control and Professional Standards at the Ministry of Interior handled 
65 complaints on the use of excessive physical force by police officers, out of which 27 were 
found  to  be  ungrounded  and  30  lacked  evidence.  Two  submissions  were  partially 
substantiated. In six cases, charges were filed for harassment in the performance of duty and 
one case for torture and other cruel and inhuman or degrading treatment or punishment. The 
Department  has  submitted  30  cases  to  the  Section  responsible  for  the  investigation  and 
prosecution  of  criminal  acts  committed  by  individuals  with  police  authority.  In  2020,  39 
complaints  were  filed  by  the  prisoners  directly  with  the  Directorate  for  Execution  of 
Sanctions, including two complaints for ill-treatment.  

The persistent issue of inadequate detention conditions in some prisons, police stations, social 
care and psychiatric facilities should be urgently addressed, in line with the recommendations 
of the last CPT report. The Ombudsman has reported that adequate resources were allocated 
for the activities of the National Preventive Mechanism against Torture and the  civil control 
mechanism  in  2020.  The  National  Preventive  Mechanism  has  drawn  attention  to  important 
weaknesses in efforts to prevent ill-treatment, including the lack of information and access to 
a lawyer in police stations and the lack of adequate healthcare in prisons. The findings of its 
reports should be thoroughly addressed. 

While the opening of the Bitola prison and the Educational-Correctional Facility near Tetovo 
at the end of 2020 are positive steps to improve overall conditions of detention in the prison 
system, the inhumane detention conditions in the Idrizovo Penitentiary-Correctional Facility 

26 

 
 
and  in  parts  of  other  detention  facilities  remain.  The  rehabilitation  of  the  most  derelict 
buildings  should  be  fast-tracked.  The  need  for  quarantine  cells  due  to  the  COVID-19 
pandemic puts additional pressure on some prisons, which are already overcrowded. The 2019 
law on the execution of sanctions and related by-laws are not yet fully applied and have not 
led to an improvement in prisons’ management and supervision. Inspection of prisons should 
be systematised, including to tackle the recurrent issue of corruption. In 2020, one member of 
the  prison  police  was  dismissed  after  a  disciplinary  procedure  for  corruption.  At  the  Prison 
Training Centre in Idrizovo, there is still no structured training programme in place for initial 
and  continuous  professional  trainings,  allowing  for  the  professionalisation  of  the  staff.  The 
new strategy for the development of the penitentiary system 2021-2025 was adopted in July 
2021 and will require funds and additional staff for proper implementation. Inter-institutional 
coordination  within  prisons  and  for  post-penal  assistance  should  be  developed,  at  the  same 
time as preparations for releasing convicted persons back into the community. Healthcare and 
treatment of drug addictions in prisons continues to remain an issue of serious concern. 

The  probation  system  has  steadily  developed,  including  with  the  opening  of  two  new 
probation  offices  and  recruitment  of  probation  officers.  In  2020,  276  probation  cases  were 
recorded,  an  increase  from  2019,  most  of  which  were  for  conditional  release  and  cases  of 
suspended sentences with protected supervision. A strategy for development of the probation 
services  2021-2025  was  adopted  in  June  2021.  The  cooperation  between  the  public  and 
private  sector  and  civil  society,  and  interagency  cooperation  should  continue.  Coordination 
between  probation  officers,  judges,  public  prosecutors,  prison  staff  and  other  institutions 
before  the  release  of  a  convicted  person  has  developed  and  should  continue,  as  well  as 
awareness raising on the benefits of probation. Amendments to the legal framework regarding 
alternative  sentences  and  alternative  procedures  have  yet  to  be  adopted  to  increase  the 
application of alternative sanctions to detention, as a means to improve the resocialisation and 
rehabilitation of convicts and to decrease the risk of re-offending, including for juveniles. No 
meaningful  progress  has  been  made  to  address  the  overall  lack  of  purposeful  activities 
educational, recreational and vocational for sentenced and for remand prisoners. Educational 
and resocialisation services, as well as treatment programmes, should be implemented in all 
penitentiary facilities. 

Regarding  the  protection  of  personal  data,  in  June  2021  Parliament  ratified  the  Protocol 
CETS  No 223 of the modernised Convention for the Protection of  Individuals  and Personal 
Data  Protection.  In  August  2021,  the  transitional  period  ended  by  which  all  controllers  and 
processors  had  to  align  data  processing  in  accordance  with  the  February  2020  Law  on 
Personal Data Protection.  

The Personal Data Protection Agency is executing its enhanced tasks and powers created by 
the new law. Despite a temporary suspension in March 2020 due to the COVID-19 pandemic, 
the Agency conducted 235 supervisions in 2020, 45 more compared with 2019. Almost half 
of  these  supervisions  (106)  were  conducted  online  and  about  60%  of  them  in  the  public 
sector. A supervision mission to the Operational Technical Agency (OTA), for interception of 
communications,  was  conducted  and  recommendations  provided.  Additionally,  the  Agency 
published a report on processing of personal data by municipalities. 

In  2020,  the  Agency  received  418  complaints,  of  which  65%  were  related  to  allegations  of 
violation  of  personal  data  protection  rights  on  social  networks.  The  Agency  received  eight 
notifications and performed three supervisions in reaction to a reported data breach, a novelty 
in  the  new  Law  on  Personal  Data  Protection.  The  Agency  acted  upon  four  cases  of 
misdemeanour  concerning  breach  of  data  protection 
two 
laws,  which  resulted 
misdemeanour fines. Training of personal data controllers and processors is ongoing. 

in 

27 

 
 
The Agency issued 15 opinions and 27 recommendations to other institutions on harmonising 
sectoral  legislation with  the  Law on Personal  Data Protection. Despite some progress,  these 
recommendations  have  not  been  fully  implemented  and  not  all  sectoral  laws  and  by-laws 
regulating personal data processing have been submitted to the Agency before adoption.  

The  Agency  overall  functioning  depends  largely  on  the  Ministry  of  Finance  (MoF)  and  the 
Ministry  of  Information  Society  and  Administration  (MISA).  For  staff  recruitment  the 
Agency  needs  the  approval  of  the  MoF,  while  for  promotion  of  staff  and  revision  of  the 
organisational chart it needs the approval of the MISA. This undermines, to a certain extent, 
the Agency’s ability to perform effectively and fully independently. 

Freedom  of  thought,  conscience  and  religion  is  guaranteed  in  law  and  in  practice,  and 
discrimination  on  grounds  of  religion  prohibited.  Coordinated  by  the  Commission  for 
Relations  with  Religious  Communities  and  Groups,  the  religious  leaders  jointly  agreed  to 
support the government in combating the spread of COVID-19, and to dissuade people from 
mass  gatherings  during  the  religious  celebrations.  The  recently  elected  new  head  of  the 
Islamic Religious Community played a positive role in improving inter-religious dialogue in 
the country.  

----------------------------------------------------------------------------------------------------------------- 

Freedom of expression  

North Macedonia has achieved some level of preparation/ is moderately prepared in the 
area  of  freedom  of  expression.  Overall,  there  was  limited  progress  during  the  reporting 
period.  The  general  context  is  favourable  to  media  freedom  and  allows  for  critical  media 
reporting  although  there  have  been  increased  tensions  during  the  COVID-19  crisis.  Self-
regulation efforts need to be resumed and followed by concrete results for the advancement in 
professional standards of journalism. Greater transparency should be ensured regarding media 
advertising  by  state  institutions  and  political  parties.  The  authorities  need  to  increase  their 
efforts  to  reform  the  public  service  broadcaster,  ensuring  its  independence  and  financial 
sustainability.  The  public  service  broadcaster  adopted  a  five-year  development  strategy  but 
the reform process is hampered by delays in appointing the members of its managing council 
and of the council of the Agency for Audio and Audio-visual Media Services. The COVID-19 
crisis had a strong economic impact on the media sector, especially on the regional and local 
actors. Media outlets were included in the relief package, but the labour rights of journalists 
still need to be addressed. Most of last year’s recommendations remain valid. In the coming 
year, the country should:  

  revise  the  legal  framework  in  the  area  of  media  in  accordance  with  the  EU  acquis  and 
European  standards  in  particular  by  continuing  the  efforts  for  the  harmonisation  of 
national laws with the revised European Directive on Audiovisual Media Services; 

  make the necessary efforts for the implementation of the strategy for reforming the public 
broadcaster,  and  finalise  appointments  for  the  public  service  broadcaster's  programme 
council and the media regulator's council; 

  enforce  a  zero-tolerance  approach  regarding  intimidation,  threats  and  acts  of  violence 
against journalists in the exercise of their profession and ensure that the perpetrators are 
brought to justice.    

The overall political context in which the media operates remained generally favourable to the 
promotion  of  freedom  of  expression  and  pluralistic  viewpoints.  Challenges  remain  in  the 
implementation of the Law on Audio and Audiovisual Media Services. Instances of physical 
and verbal violence, and threats against journalists and media workers increased, while their 

28 

 
 
working conditions, especially labour and social rights, remain very difficult. The authorities 
continued  to  ensure  support  for  media  outlets  in  the  context  of  the  COVID-19  pandemic. 
Media  reforms  need  to  be  enhanced,  engaging  all  relevant  stakeholders  in  a  genuine 
consultation process. 

Intimidation of journalists 

In 2020, ten cases of intimidation of journalists were reported to the Ministry of Interior while 
the Association of Journalists registered two physical attacks and 12 various forms of verbal 
life-threats  and  intimidation.  In  five  of  those  cases,  female  journalists  were  insulted  and/or 
threatened.  At  the  beginning  of  2021,  one  physical  attack  and  one  death  threat  were  also 
registered.  Law  enforcement  authorities  and  the  Public  Prosecutor’s  Office  follow  up 
incidents  involving  journalists,  but  better  coordination  between  different  institutions  to  act 
faster  on  reported  violations  and  prevent  impunity  of  perpetrators  is  needed.  Draft 
amendments  to  the  Criminal  Code  are  proposed,  in  order  to  enhance  the  protection  of 
journalists and other media workers by placing them in the group of professions that would 
receive  additional  protection  when  exposed  to  attacks  and  threats  due  to  the  nature  of  their 
work.  

National  and  international  media  associations  noted  that  threats  from  politicians  and  public 
officials,  online  harassment  and  verbal  attacks  on  journalists,  including  on  social  networks, 
have  increased.  The  authorities/judicial  system  should  demonstrate  a  more  proactive  and 
systematic condemnation of attacks.   

Only a small percentage of the perpetrators of physical attacks against journalists have  been 
brought to justice.  

Legislative environment 

To mitigate the impact  of the COVID-19 pandemic, the government  adopted several  decree 
supporting the media. In November 2020, the government submitted a proposal to Parliament 
to revoke Article 143 (para 3 and 4) of the Law on Audio and Audiovisual Media Services, to 
resolve the disagreement between cable operators and broadcasters related to  copyrights  for 
broadcasting  or  rebroadcasting  TV  channels.  These  provisions  were  previously  assessed  as 
unconstitutional  by  the  Constitutional  Court  and  were  struck  down.  There  is  an  ongoing 
revision of several laws that also  encompass the work of media, such as amendments to the 
Criminal Code to ensure greater safety for journalists as well as amendments to the Law on 
Civil Liability for Defamation and Insult introducing provisions to reduce penalties for non-
pecuniary  damage.  The  authorities  initiated  the  process  of  revision  of  the  legal  framework 
encompassing  the  work  of  media  in  line  with  the  EU  acquis.  Appointments  of  the  new 
members of the public service broadcaster's programme council and media regulator's council 
were  further  delayed  in  Parliament,  thereby  impeding  the  anticipated  positive  effects  of 
reform to strengthen their independence. The Law on audio and audio-visual media services 
provides an option for authorities to limit the allocation of funds to the regulator, the public 
broadcaster and the public enterprise for broadcasting. The possibility for political parties to 
use  state  funding  for  political  advertising  in  the  media  remains  a  concern  among  media 
associations, relating to possible influence on media independence. Hate speech is illegal both 
online and offline but remains prevalent online.  

Implementation of legislation/institutions 

As  part  of  media  monitoring  during  the  2020  early  parliamentary  elections,  the  Agency  for 
Audio and Audiovisual Media Services initiated three misdemeanour procedures for violating 
the election silence and two misdemeanour procedures for failing to ensure just, balanced and 
unbiased  coverage  of  the  election  campaign.  The  Agency  also  monitored  the  media  on  the 

29 

 
 
occasion of the early municipal elections in Shtip and Plasnica in December 2020, issuing a 
misdemeanour  procedure  against  one  regional  media  outlet.  The  regulator  continued  its 
engagement with  civil  society organisations and media outlets  on promoting media literacy. 
The  financial  stability  and  independence  of  the  media  regulator  need  to  be  further  ensured 
following the harmonisation of national legislation with the EU Audiovisual Media Services 
Directive.  In  2020,  the  Council  of  Media  Ethics  received  140  complaints  for  disrespect  of 
ethical  standards,  90%  of  which  concerned  online  cases.  The  self-regulatory  body  noted  an 
increase  of  69%  of  complaints  compared  to  the  previous  year  and  the  increasing  trend 
continued in 2021. The Association of Journalists reported around 30 ongoing court cases of 
insult and defamation involving journalists.  

Public service broadcaster 

The  reform  of  the  public  service  broadcaster,  which  was  further  delayed,  needs  to  be 
prioritised. According to the Law on Audio and Audiovisual Media Services, the amount of 
public funding for the public broadcaster is defined as a percentage of the state budget, with a 
gradual increase over time (up to 0.8% in 2019; up to 0.9% in 2020; 1% as of 2021). Due to 
the  authorities’  discretionary  rights  envisaged  by  law,  the  transfer  of  funds  continued  to  be 
executed  at  a  lower  rate.  In  December  2020,  the  government  decreased  the  monthly 
instalment  by  50%,  leading  to  a  total  budget  for  2020  of  EUR  13.1  million.  The  regulator 
market analysis published in September 2020 shows a continuous decline in financing of the 
public broadcaster over the last few  years (the budget in  2015 was EUR 20.9 million). The 
public service broadcaster adopted a development strategy for a period of five years, in close 
consultation  with  media  associations.  The  substantial  decrease  in  funding  hampers  the 
successful  implementation  of  the  Strategy  and  affects  the  quality  of  performance.  Solutions 
for the public service broadcaster’s old  debts  towards state institutions were not  found. The 
independence  and  sustainability  of  the  public  broadcaster,  both  financial  and  as  regards  the 
legal  framework  covering  the  public  broadcaster,  still  needs  to  be  ensured.  Some  media 
associations  praised  visible  improvements  in  the  quality  of  the  public  service  broadcaster’s 
reporting.  However,  challenges  persist  related  to  the  modernisation  of  working  procedures 
and technical equipment. During the COVID-19 outbreak, the public broadcaster continued to 
cooperate with  relevant institutions to convey timely and accurate information. Programmes 
for  children  continued  to  be  broadcast  on  two  national  channels,  as  a  remedy  for  the 
disruption of the educational process. 

Economic factors 

The COVID-19 pandemic had a negative impact on already declining revenues in the media 
sector.  The  authorities  introduced  several  measures  supporting  the  sector,  including  both 
traditional  and  online  media.  The  financial  viability  of  media  outlets  and  available  funding 
continue  to  raise  concerns  over  media  integrity  and  independence.  Additional  measures 
supporting professional and investigative journalism are needed. In January 2021, the Central 
Registry set up a 90-day deadline for registration of data in the ‘Register of Actual Owners’, 
thus  further  ensuring  transparency  in  the  ownership  of  legal  entities,  including  media.  The 
media agency performs regular monitoring on media ownership. Efforts are needed to ensure 
the independence of the media from political interference. 

Government  advertising  on  commercial  channels  is  banned.  Concerns  have  been  raised  by 
media  associations  over  possible  amendment  of  article  102  of  the  Law  on  Audio  and 
Audiovisual  Media  Services  to  allow  state  funded  campaigns  of  public  interest.  The 
possibility for political parties to use state funding for advertisement in the media continue to 
cause concern among media associations about possible political influence on editorial lines. 

30 

 
 
There are five daily newspapers, including two in Albanian language. In December 2020, the 
authorities allocated EUR 500,000 to support the print media. 

Internet 

There  are  differing  opinions  in  the  media  sector  concerning  the  legal  regulation  of  online 
media  in  particular  as  regards  the  emerging  issue  of  disinformation.  As  a  response,  a  self-
regulation mechanism has been adopted, but there has been no other concrete follow-up. The 
established registry of online media (promedia.mk), which is voluntary and sets a number of 
minimum  professional  requirements,  included  152  online  media  outlets  in  September  2021.  
Further  efforts  are  needed  to  address  issues  related  to  disinformation  and  hate  speech, 
including online. With regard to access to information, the Agency for the Protection of Free 
Access  to  Public  Information  has  received  109  complaints,  of  which  ten  were  from 
journalists. Complaints filed by investigative journalists refer to the lack of responses by the 
institutions. 

Professional organisations and working conditions 

The  Independent  Trade  Union  of  Journalists  and  Media  Workers  is  a  full  member  of  the 
International  Federation  of  Journalists  and  of  the  European  Federation  of  Journalists.  The 
Union  has  a  dialogue  with  the  government,  which  needs  to  be  more  regular  and  better 
structured  in  addressing  persisting  challenges  faced  by  the  profession.  Journalists’  working 
conditions, especially their labour and social rights still need to be significantly improved, in 
particular  at  the  local  level.  The  survey  conducted  by  the  Independent  Trade  Union  of 
Journalists  showed  that  23%  of  media  workers  have  no  health  and  social  insurance,  19% 
answered  that  the  media  management  does  not  allow  workers  to  form  a  trade  union.  Low 
income,  as  well  as  disrespect  of  the  law  on  labour  relations  by  employers  are  the  most 
common and persisting  challenges for journalists. Due to poor labour conditions, journalists 
and media workers are vulnerable to self-censorship. 

(See also Chapter 10 - Information society and media) 

----------------------------------------------------------------------------------------------------------------- 

The right to freedom of assembly and association is guaranteed by the Constitution. In June 
2020,  following  the  end  of  the  state  of  emergency  due  to  the  pandemic,  the  freedom  of 
assembly  and  association  were  restored.  Additional  efforts  are  needed  to  implement  all  the 
rulings of the European Court of Human Rights in regards to the registration of associations. 
The  provisions  of  the  Constitution  and  the  law  on  public  assemblies  provide  a  sound  legal 
framework that ensures the right to hold public assemblies without administrative obstacles, 
despite  the  COVID-19  pandemic.  The  legislation  is  in  line  with  the  EU  Charter  of 
Fundamental  rights  and  the  European  Convention  on  Human  Rights.  During  the  past  year, 
political  parties  organised  or  joined  gatherings  and  demonstrations  on  a  regular  basis. 
Numerous demonstrations took place to draw attention to social, economic and human rights 
matters. The numerous peaceful and lawful public gatherings were usually held in compliance 
with  the  health  rules  in  force.  However,  incidents  occurred  during  a  protest  organised  to 
contest  the verdict  in  the ‘Monster’ case, at  the end of February. Nine people were arrested 
following  a  confrontation  between  a  small  group  of  protesters  and  law-enforcement  forces, 
during which reportedly several police officers and one journalist were injured. 

Issues  of  labour  and  trade  union  rights  are  further  covered  in  Chapter  19  -  Social  policy 
and employment. 

Procedures  for enforcing  property rights remain lengthy and expensive for citizens, due to 
the  absence  of  a  central  institution  and  a  lack  of  coordination  between  institutions  dealing 

31 

 
 
with  these  rights.  There  is  still  no  national  strategy  with  regard  to  property  rights.  Existing 
registers  are  not  regularly  updated  and  are  still  kept  in  analogue  format,  particularly  at  the 
municipal level. The Cadastre Office maintained a satisfactory rate of over 90% of resolved 
cases.  Registration  of  land  and  properties  has  been  completed  and  laser-scanning  has  been 
that  handle  restitution, 
conducted  across 
compensation, and legalisation processes still struggle to manage their caseload mainly due to 
understaffing. Although the denationalisation process was declared closed nine years ago, in 
reality  there  are  still  approximately  6,500  unsolved  denationalisation  cases,  some  of  which 
were initiated more than a decade ago. 

territory.  The  administrations 

the  entire 

Regarding non-discrimination, in January 2021, the new equality body – the Commission for 
the Prevention and Protection against Discrimination was elected. Most of the Commissioners 
come  from  the  civil  society  sector  and  are  experienced  professionals  in  anti-discrimination. 
However,  there  has  been  criticism  concerning  a  perceived  lack  of  diversity  in  the  new 
Commission,  notably  as  regards  gender  and  persons  with  disabilities.  The  Commission  has 
wide-ranging  powers,  including  the  right  to  initiate  proceedings  for  the  protection  against 
discrimination upon its own initiative. In the first several months since the election, the new 
Commission faced numerous logistical and financial challenges that need to be addressed in 
order to become fully operational.  

The  main  anti-discrimination  legislation  in  North  Macedonia  is  the  Law  on  Prevention  and 
Protection  against  Discrimination,  which  includes  definitions  of  direct  and  indirect 
discrimination,  harassment,  incitement,  encouragement  and  instruction  to  discriminate, 
victimisation  and  segregation.  A  new  Strategy  for  Equality  and  Non-Discrimination  2021-
2026  is  still  under  preparation.  The  National  coordinative  body  for  equality  and  non-
discrimination  is  well  perceived  by  civil  society  organisations.  The  Ombudsman’s  Office 
received  62  complaints  on  discrimination,  the  majority  of  which  in  the  field  of  work  and 
labour relations, and issued 21 opinions. The Ombudsman followed the provisions of the new 
law on the prevention and protection against discrimination  in  the collection of statistics by 
areas and grounds of discrimination. The Ombudsman’s department for the protection against 
discrimination  is  understaffed.  In October 2020,  the Ministry of  Interior launched  a website 
for citizens to report hate crime, hate speech and other forms of violence. The absence of the 
systematic  collection  of  data  on  hate  speech  remains  an  issue.  A  proactive  and  holistic 
approach in addressing hate speech and hate crime is needed. 

Some  progress  was  achieved  on  gender  equality  with  further  legal  alignment  with  the 
Istanbul  Convention.  The  Law  on  the  Prevention  and  Protection  from  Violence  against 
Women  and  Domestic  Violence  was  adopted  in  January,  introducing  a  systematic 
reintegration  of  victims  of  violence.  Alignment  of  related  laws,  adoption  of  bylaws  and  of 
operating procedures  are needed. An effective monitoring system  for the implementation  of 
the Convention’s action plan is still lacking. The Ministry of Defence and the army adopted 
an  operational  plan  for  the  implementation  of  UN  Resolution  1325  on  Women,  Peace  and 
Security,  and  for  institutional  coordination,  in  partnership  with  civil  society.  Both,  the 
equality body and the Ombudsman, have competences to handle gender equality cases. 

The National Gender Equality Index, which was published for the first time in 2019, remains 
a key indicator for measuring the equality of citizens, but it has not yet been updated. Proper 
gathering  and  analysis  of  gender  statistics  requires  the  enhancement  of  the  capacity  of 
relevant institutions and improved coordination. 

There were more cases of domestic gender-based violence against women during the COVID-
19  pandemic.  The  Ministry  of  Social  Policy  and  Labour  continued  to  invest  in  community 
services to support victims of gender-based violence, but the capacities of the shelters needs 

32 

 
 
to  be  enhanced  to  meet  the  Istanbul  Convention  standards,  including  those  on  access  to 
women  with  disabilities.  Police  need  proper  capacity  building  for  assessing  the  risk  of 
violence against women and take adequate measures. Access to services supporting victims of 
violence has been reduced due to the pandemic. A specialised 24/7 team for urgent protection 
of vulnerable groups operates only in the capital. 

Gender stereotyping persists, and women in public life are particularly susceptible to attacks 
through  social  media.  The  two  ‘Public  Room’  cases,  where  explicit  photos  and  private 
information of girls and women were shared on an online platform, raised public concerns and 
civic protests against the lack of timely action by the authorities and demonstrated that there 
are gaps in the legislative framework.   

The  legal  framework  concerning  the  protection  of  the  rights  of  the  child  largely  complies 
with  international  standards.  However,  further  improvements  addressing  legal  gaps,  such  as 
the discrepancy between the Family  Law provisions on adoption and international standards 
are  needed.  The  Law  on  Child  Protection  was  amended  in  December  2020,  introducing 
changes on the use of the right to an education allowance during emergency situations. The 
alternative  report  on  child  rights  by  civil  society  organisations  notes  structural  challenges, 
such  as  a  lack  of  resources  by  state  institutions  dealing  with  child  rights,  the  absence  of 
consultations  of  youth  in  policy-making  and  a  lack  of  a  basic  strategic  documents  on  child 
rights. 

The statutory body  responsible for overseeing the implementation  of the  Convention on the 
Rights  of  the  Child  (CRC)  is  not  fully  operational.  A  mechanism  for  monitoring  the 
implementation  of  the  CRC  and  an  action  plan  for  children  need  to  be  prepared,  with  an 
appropriate  budget  and  sectoral  models  that  will  provide  effective  services  for  children. 
Exchange on child-focused data collection and analysis is needed. Data on vulnerable groups 
such  as  children  with  disabilities  or  children  from  the  Roma  community  still  need  to  be 
further improved to allow for solid policy analysis. 

In 2020, 111 complaints were filed to the Ombudsman related to child rights violations and 37 
complaints  related to  children with  disabilities. The Ombudsman issued 42 and 17 opinions 
respectively.  The  majority  of  complaints  continues  to  be  submitted  by  parents/caregivers, 
rather than by children themselves. A national strategy to end violence against children (2020-
2025)  was  adopted  but  there  are  still  challenges  with  its  full  implementation.  For  instance, 
there  are  gaps  in  the  response  by  the  child  protection  system  to  the  challenges  of  online 
violence  and  abuse  (cyber-bullying).  Programmes  for  the  rehabilitation,  resocialisation  and 
reintegration for child victims of violence are not available. Further efforts are needed to raise 
awareness  of  violence  against  children  and  develop  a  more  unified  approach  in  providing 
support services  between relevant  state institutions and several  CSOs that provide legal  and 
psycho-social support to victims. 

The  COVID-19  pandemic  demonstrated  that  efforts  to  enhance  digital  services  should  be 
accompanied  by  efforts  to  prevent  the  further  marginalisation  of  vulnerable  groups,  due  to 
lack of digital skills and access to technologies. The authorities introduced a substantial set of 
social and child protection measures to combat the socio-economic consequences of COVID-
19.  However,  further  efforts  are  needed  to  improve  the  child-sensitivity  of  the  social 
protection system and child-centred services delivery model. 

During the COVID-19 pandemic, the Ministry of Labour and Social Policy provided didactic 
materials  for  children  with  disabilities  in  day-care  centres  and  foster  families  and  provided 
online psychosocial support to children with disabilities. 

33 

 
 
The  deinstitutionalisation  process  is  completed,  the  remaining  four  children  in  institutional 
care are in transitional period and soon to be resettled. The conditions for children settled into 
community-based  care  homes  are  generally  satisfactory.  Additional  community  services 
continue to be needed to identify children at risk and to support Roma children and children 
with disabilities who are victims of discrimination and segregation. 

The  National  Unit  for  the  Suppression  of  Human  Trafficking  and  Migrant  Smuggling 
identified seven victims of trafficking in  human beings  in  2020, six of whom  were children 
who  were  trafficked  victims  for  the  purpose  of  forced  marriage,  sexual  and  labour 
exploitation.  Further  efforts  are  needed  to  ensure  the  protection  of  vulnerable  categories  of 
children from sexual exploitation.  

The implementation of the law on juvenile justice must be improved, including on access to 
justice, legal  representation and the capacity  of public officials involved  with  child victims, 
child  witnesses  and  children  in  conflict  with  the  law.  The  inter-sectoral  approach  for  the 
implementation  of  the  legal  framework  needs  to  be  systematised  and  streamlined  among 
professionals  of  juvenile  justice.  The  legal  framework  should  be  further  updated  with 
international  standards  and  EU  directives,  including  the  Directive  on  Procedural  Safeguards 
for Children who are Suspects or Accused Persons in Criminal Proceedings. The opening in 
October/November  2020  of  the  juvenile  educational-correctional  facility  near  Tetovo  has 
improved  detention  conditions  and  provided  access  to  better  education  and  healthcare  to 
children  and  juveniles,  although  the  facility  is  oversized  for  its  purpose.  The  facility  is  in  a 
remote location, making it unfit for resocialisation and rehabilitation purposes. The role of the 
State Council for the Prevention of Juvenile Delinquency should be further strengthened, as 
should  the  capacity  of  the  local  councils  to  develop  programs  for  inclusion  of  the  local 
community in the prevention of juvenile offenses.  

There  was  little  progress  in  improving  the  rights  of  persons  with  disabilities.  The 
mechanism  for  monitoring  the  implementation  of  the  Convention  for  the  Rights  of  Persons 
with Disabilities was established within the Ombudsman’s Office. The national coordination 
body  for  implementing  the  Convention  continued  to  meet  regularly  but  its  mandate  and  its 
capacity  to  influence  decision  makers  in  the  state  structures  remain  weak.  The  Agency  for 
Audio and Audio-visual Media Services adopted a policy for providing access to audio-visual 
media  services  for  persons  with  sensory  disabilities.  The  national  de-institutionalisation 
strategy  2018-2027  is  the  most  relevant  policy  document,  in  addition  to  the  Law  on  Social 
Protection. Protocols for minimising the risks of COVID-19 in  residential social institutions 
and  supported  living  units  were  established.  Persons  with  disabilities  continue  to  face 
considerable discrimination, both  direct  and indirect,  due to  infrastructure-related barriers, a 
lack  of  information  and  services,  discriminatory  attitudes  and  social  exclusion.  In  2020,  the 
Ombudsman’s  Office  reported  37  complaints  of  discrimination  against  children  and  adults 
with disabilities. (See also Chapter 19 – Social Policy and employment) 

The  Law  on  the  Prevention  and  Protection  from  Discrimination  includes  sexual  orientation 
and gender identity as protected grounds, thus enhancing the legal framework of the rights of 
lesbian, gay, bisexual, transgender, intersex and queer (LGBTIQ) persons. The promotion 
of equality and condemnation of discrimination, hate speech and hate crime against LGBTIQ 
people needs to be enhanced in practice. The Ministry of Labour and Social Policy cooperated 
with LGBTIQ civil society on the National Action Plan for LGBTIQ 2021-2025, and on the 
opening  of  the  first  national  helpline  for  LGBTIQ  people.  Education  authorities  and  civil 
society  organisations  cooperated  on  a  guide  for  dealing  with  and  preventing  violence  in 
primary  schools,  revision  of  textbooks,  transphobia  and  gender  stereotypes.  The  second 
Skopje Pride took place, with the participation of high level officials. No progress has been 
noted in investigations on attacks against LGBTIQ activists and the LGBTIQ support centre. 

34 

 
 
The capacities of the authorities and law enforcement officers and legal professionals need to 
be  further  strengthened.  Тhe  legal  framework  does  not  allow  for  the  official  recognition  of 
same-sex  couples.  The  COVID-19  pandemic  affected  the  most  vulnerable  in  LGBTIQ 
communities,  preventing  access  to  some  of  the  state  institutions  and  community-based 
services,  affecting  their  physical  and  mental  health.  At  the  end  of  2020,  an  inter-party 
parliamentary  group  for  advancing  rights  of  LGBTIQ  persons  was  established  in  the  new 
Parliament. 

Concerning  procedural  rights,  the  draft  law  on  the  compensation  of  victims  of  crime, 
including victims of trafficking in human beings, which was publicly consulted has still not 
been adopted. 

As regards the protection of minorities, the authorities continued to implement the national 
strategy  ‘One  Society  for  All  and  Interculturalism’.  The  Ministry  of  Political  System  and 
Inter-Community Relations and the National Coordinator on interculturalism should maintain 
a  constant  dialogue  with  all  non-majority  communities.  Moreover,  the  coordination  process 
within  the  Permanent  Advisory  Body  of  the  government  and  the  Coordination  Body  of  the 
Prime Minister’s office should be held in an inclusive and transparent manner, also ensuring 
that the rights of smaller non-majority communities are respected. More efforts are needed to 
provide  additional  resources  to  the  Agency  for  Communities  Rights  Realisation  and  the 
Language  Implementation  Agency.  Both  institutions  remain  understaffed  and  insufficiently 
funded.  Furthermore,  the  local  authorities  should  make  use  of  the  national  strategy  ‘One 
Society for All and Interculturalism’ to improve the situation at the municipal level, where the 
representation of non-majority communities remains insufficient.  

Limited  progress  on  inclusion  of  Roma  was  made  in  the  last  year.  The  Roma  inclusion 
strategy (2014-2020) has expired, and the new one is not yet ready, although the preparatory 
work  has  started.  There  is  no  more  Minister  without  portfolio  –  instead  an  advisor  to  the 
Prime  Minister  responsible  for  Roma,  lowering  the  possibility  for  Roma  issues  to  be 
discussed  by  the  government.  The  implementation  of  the  strategy  and  the  corresponding 
action  plans  for  education,  employment,  housing,  gender  and  health  was  incomplete.  347 
Roma  children  aged  6  were  enrolled  for  the  school  year  2020/2021,  which  is  1.16%  of  the 
total number of children enrolled in school for the first time. In kindergartens, about 90 Roma 
children received subventions from public funds. As estimated by CSOs, the annual dropout 
rate per grade for Roma children in primary education is 6% and for secondary education is 
4%. There is no system and baseline data for the reintegration of children that have not been 
enrolled in  education on time or have left education without completing it.  Roma education 
mediators are mainstreamed in the Law on Primary Education, but they are not  yet foreseen 
for  secondary  education.  The  majority  of  Roma  children  do  not  have  access  to  technical 
equipment to follow distance-learning education. Segregation in school remains high.  

The number of unemployed Roma is  continuously increasing, 13,703 Roma were registered 
as unemployed in 2020, compared with 9,239 in 2019. The number of Roma benefiting from 
active  measures  for  employment  is  increasing  (431  in  2021  against  86  in  2020).  Still,  new 
measures  should  be  introduced  with  a  more  targeted  and  affirmative  approach  for  Roma 
beneficiaries.  The  Regional  Roma  Survey  data  showed  that  94%  of  Roma  are  covered  by 
health insurance and that 50% of the marginalised Roma use preventive and curative health 
services.  In  2020,  43%  of  those  that  died  before  the  age  of  65  were  Roma.  There  are  21 
licensed Roma health mediators, with the number decreasing over the year mostly because of 
the  COVID-19  crisis.  On  housing,  the  funds  for  Roma  housing  were  significantly  cut 
redirecting  them  to  respond  to  COVID-19  crisis.  It  is  not  clear  whether  the  support  to 
infrastructure projects at local level will continue, after the departure of its initiator the Roma 
Minister  without  portfolio.  Initiatives  on  legalisation  of  the  Roma  settlements  in  some 

35 

 
 
municipalities are underway; however, the majority are still not covered by urban plans. The 
new  law  on  social  housing  has  not  been  adopted.  The  state  budget  committed  for  Roma 
housing is not entirely used.  

The  Law  on  Persons  Unregistered  at  the  Birth  Registry  was  adopted  but  implementation  is 
slow. Of an estimated 700 Roma without ID, 202 requests were submitted, out of which birth 
certificates were issued to 92 applicants, which represents a rather small number. Roma girls 
remain particularly vulnerable, often due to unemployment and early marriages. There are no 
systematic  measures  by  state  institutions  to  address  the  issue  of  street  children.  Priority 
actions  identified  in  the  November  2019  Roma  seminars  are  moderately  addressed  and 
monitoring  and  reporting  responsibilities  remain  unclear.  Commitment  to  implement  the 
Poznan  Declaration  priorities  remains  satisfactory.  A  set  of  humanitarian  measures  was 
introduced to provide support during the pandemic to the most marginalised Roma.  

EU citizens’ rights 

Since  December  2012,  North  Macedonia  has  introduced  a  modification  in  the  law  allowing 
the  acquisition  of  citizenship  for  special  economic  interest.  The  migratory  and  security 
risks  this  scheme  could  pose  to  the  EU  are  being  closely  monitored,  especially  keeping  in 
mind inconsistencies in the criteria for granting the citizenship. As indicated in the fourth visa 
suspension  mechanism  report8,  North  Macedonia  should  refrain  from  enabling  systematic 
acquisition of citizenship for special economic interest. 

2.2.2  Chapter 24: Justice, freedom and security  

The  EU  has  common  rules  for  border  control,  visas,  residence  and  work  permits,  external 
migration and asylum. Schengen cooperation entails the lifting of border controls within the 
EU. EU Member States also cooperate with North Macedonia in the fight against organised 
crime and terrorism, and in judicial, police and customs matters and are supported by the EU 
Justice and Home Affairs Agencies. 

North Macedonia is moderately prepared to implement the EU acquis. Some progress was 
made in addressing last year’s recommendations, mainly on improving operational capacities 
of  law  enforcement  agencies.  Implementation  of  the  priorities  of  the  Joint  Action  Plan  on 
Counterterrorism  was  improved.  Measures  to  counter  violent  extremism  and  fight  terrorism 
need to continue. Migration management efforts continued. Registration of migrants needs to 
be carried out in a systematic manner and protection-sensitive profiling needs to be improved. 
The country should establish a proper system for managing irregular movement and stop the 
practice of returning migrants outside a legal framework. A more systematic approach needs 
to be taken to fighting the smuggling of migrants.  

Most of the recommendations from the 2020 report remain outstanding. In the coming year, 
the country should, in particular:  

  Continue the proactive implementation of the institutional reforms  of the security sector 
(criminal  police,  financial  units,  National  Coordination  Centre  for  the  Fight  against 
Organised Crime) to achieve further tangible results;  

  Continue  to  implement  the  Joint  Action  Plan  on  Counterterrorism,  including  in  the 
education sector, and ensure effective performance of the National Coordinator's office by 
allocating sufficient budget; 

  Systematically register migrants and improve protection-sensitive profiling while adopting 

a more systematic approach to fighting migrant smuggling.  

8 COM(2021) 602 final 

36 

 
 
                                                           
Fight against organised crime 

The  country  has  some  level  of  preparation  in  the  fight  against  organised  crime.  The 
legislative  framework  is  broadly  in  line  with  European  standards  and  efforts  to  implement 
strategies against organised crime must continue. Some progress was made at the operational 
level, but more needs to be done to improve the effectiveness of law enforcement in fighting 
certain forms of crime, such as money laundering and financial crimes. Coordination remains 
crucial for all stakeholders involved in combatting organised crime. 

Some  of  the  previous  recommendations  from  the  2020  report  remain  outstanding.  In  the 
coming year, the country should, in particular:  

  further  improve  the  track  record  of  investigations,  prosecutions  and  convictions  for 
organised  crime  and  money  laundering,  and  demonstrate  the  ability  to  effectively 
dismantle large criminal networks; 

  adopt and implement the necessary legislation that would regulate the activity of the Asset 
Recovery Office and enhance the effectiveness of  the national asset recovery system; 

  allocate the necessary financial and human resources to the investigative centres, set up in 
the  Basic  Public  Prosecution  Office,  allowing  them  to  increase  the  efficiency  of  the 
investigations and improve inter-institutional cooperation. 

Institutional set-up and legal alignment  

The country has 341 uniformed police officers per 100 000 inhabitants. In 2021, 585 police 
officers were employed. In December 2020, 600 new vacancies were published. 

Key  institutions  in  the fight  against organised crime include specialised  police units within 
the  Ministry  of  Interior.  Each  of  them  deals  with  different  types  of  organised  crime  and 
financial investigation. In addition, there is the Financial Intelligence Unit under the Ministry 
of  Finance  that  collects  information  and  helps  identify  suspicious  transactions.  Financial 
Investigation units were also set up within the Customs Administration, the Financial Police 
and within the Ministry of Interior. 

The  police  is  generally  well  equipped  and  trained.  The  Police  Training  Centre  within  the 
Ministry of the Interior provides both initial and continuous training. 

North Macedonia implemented wide-ranging reforms in order to accede to NATO, including 
a comprehensive reform of its intelligence services. The National Security Agency (NSA) is 
functional, but still located in the premises of Ministry of Interior. The NSA was designed as 
an  independent  state  body  without  police  powers,  unlike  its  predecessor  the  Bureau  for 
Security and Counterintelligence (UBK). This is in line with recommendations of the Senior 
Experts’  Group  on  systemic  rule  of  law  issues.  The  technical  conditions  for  a  proper 
functioning of the system for the interception of communications have been further improved. 
However,  three  out  of  six  authorised  bodies  have  yet  to  be  connected  to  the  Operational 
Technical Agency. The new Law on the Intelligence Agency was adopted in January 2021 in 
order to complete the new security set-up.  

The  Asset  Recovery  Office  (ARO)  set  up  within  the  Public  Prosecution  Office,  is 
understaffed, employing only one public prosecutor, out of five to be employed. Furthermore, 
the Law on the Asset Recovery Office  has not been adopted.  

The  National  Cyber  Security  Council  was  established  in  July  2020  in  accordance  with  the 
National Computer Security Strategy (2018-2022). The Council is composed of the ministers 
of defence, interior and information society and administration. 

37 

 
 
Regarding  the  legal  framework,  the  Criminal  Code  is  broadly  in  line  with  European 
standards and criminalises trafficking in  human  beings,  online child pornography, computer 
crime and drug trafficking. 

On the strategic framework, the National  Strategy for the prevention of money laundering 
and financing terrorism (2021-2023) was adopted in August 2021. The National Strategy for 
capacity building for financial investigations and confiscation of property (2021  - 2023) and 
the Action Plan were adopted in July 2021. 

A  National  Strategy  for  Combating  Trafficking  in  Human  Beings  and  Illegal  Migration 
(2021-2025)  was  adopted  in  April.  The  National  Commission  for  Combating  Trafficking  in 
Human Beings and Illegal Migration is responsible for monitoring the implementation of the 
strategy.  The  decentralisation  of  the  National  Commission,  through  the  creation  of  local 
commissions  at  the  municipal  level,  has  yet  to  prove  its  effectiveness.  There  is  a  Police 
Development  Strategy  and  an  action  plan  for  its  implementation  for  2016-2020.  There  is  a 
National Cybersecurity Strategy 2018-2022 and related action plan. 

Implementation and enforcement capacity  

The track record of investigations, prosecutions and convictions in the fight against organised 
crime has improved. 

In 2020, 15 investigations were launched against 77 people. In the period between January to 
March 2021, there was  one investigation, against  4  people. There  were indictments brought 
against  63  persons  in  2020  in  18  cases,  and  against  16  persons  on  3  cases  in  the  period 
between  January  to  March  2021.  These  crimes  included  trafficking  in  human  beings, 
smuggling  of  migrants,  drug  trafficking,  illegal  trade  in  weapons,  money  laundering.  There 
are 26 ongoing trials against 137 defendants.  In 2020, final convictions were pronounced in 
15 second instance judgments against 34 defendants,  and in  one second  instance judgement 
against  two  defendants  in  the  period  between  January  to  March  2021.  There  were  19  cases 
with first instance decisions to seize or confiscate assets against 36 individuals (cars, money, 
computers  etc.  The  external  oversight  mechanism  has  been  implemented.  The  Special 
Department  for  investigation  and  prosecution  of  crimes  committed  by  persons  with  police 
powers  and  members  of  the  prison  police  in  the  Public  Prosecutor's  Office  has  only  two 
investigators.  The  department  registered  264  cases  of  excessive  use  of  force  by  law 
enforcement officials against 483 persons. Investigative procedures were launched in 3 cases 
against 3 persons. Other investigative actions were taken in 59 cases against 111 individuals. 
Three  individuals  were  put  in  custody.  A  total  of  19  first-instance  verdicts  were  delivered 
against 27 persons.  

Following  an  investigation  involving  the  Public  Prosecutor,  the  Ministry  of  Interior  and 
international  partners  a  scheme  involving  the  sale  of  passports  was  uncovered  involving  a 
group  of  ten  Ministry  of  Interior  employees  and  one  outsider.  In  total  215  passports  were 
issued  to  214  foreign  nationals  and  one  national  under  a  false  name.  Seven  of  the  accused 
were  sentenced  to  imprisonment  while  criminal  proceedings  against  the  remaining  accused 
are  pending.  Disciplinary  procedures  were  initiated  against  nine  employees  of  Ministry  of 
Interior and their employment was terminated. Following an internal analysis the Ministry of 
Interior has identified possible weaknesses in the system for issuing personal documents. Both 
structural and legal changes have been initiated. The National Coordination Centre for the 
Fight  against  Organised  Crime  has  improved  its  operational  capacity.  All  participating 
authorities have access to their respective databases. The Centre provides an inter-institutional 
exchange of information. 

38 

 
 
Despite  the  appointment  in  April  of  five  new  public  prosecutors  in  the  Basic  Public 
Prosecutor’s  Office  against  Organised  Crime  and  Corruption  (OCCPO),  this  Office  has 
insufficient  human  resources  and  lacks  the  financial  resources  to  engage  the  services  of 
experts. There is a need for specialisation within the Office, as well as a pro-active approach 
to pursuing cases. 

The investigative centres set up in the Basic Public Prosecution Office in Skopje, Kumanovo 
and  Tetovo,  and  in  the  OCCPO  are  operational  but  lack  human  and  financial  resources, 
including for the investigators’ allowances, and adequate equipment to properly perform their 
functions.  These  investigative  centres  are  aimed  at  increasing  the  efficiency  of  the 
investigations  and  improving  relations  between  prosecutors,  the  police  and  the  other 
relevant bodies.  

The  country  participates  in  international  police  cooperation  through  the  main  cooperation 
channels. Cooperation with Europol is well established following the conclusion of a strategic 
agreement in 2007 and an operational agreement in 2011. There is operational cooperation in 
the fight against trafficking  in human beings, weapons, and drugs. A secure communication 
link  for  information  exchange  (SIENA)  was  established.  A  liaison  officer  from  North 
Macedonia  has  been  posted  in  Europol  headquarters  in  The  Hague  since  2015.  North 
Macedonia participated in Europol’s Analysis Projects in the area of environmental crime and 
cybercrime. North Macedonia is active in all elements of cooperation (incl. in EMPACT) in 
which  Europol  includes  its  external  partners,  including  in  the  areas  of  cybercrime,  migrant 
smuggling  and  counterterrorism,  as  well  as  Europol’s  reporting  and  operations.  In  addition, 
SIENA is reported to be used in the day-to-day operation and during implementation of Joint 
Action  Days,  for  exchange  of  firearms-related  information  with  Europol.  In  2020,  North 
Macedonia  participated  in  four  cases  opened  at  Eurojust  related  to  organised  crime. 
Cooperation  between  the  country  and  the  EU  Agency  for  Law  Enforcement  Training 
(CEPOL) is well established and based on a working arrangement. A dedicated contact point 
is in place. North Macedonia has full access to the CEPOL Exchange Programme as well as to 
the free of charge electronic learning system of CEPOL. 

Some efforts have been made to unify standard operative procedures in the law enforcement 
units and prosecution bodies for financial investigations. 

In 2020, confiscation or seizure of criminal assets was used against 41 persons in 19 cases in 
first-instance verdicts. Confiscation of criminal assets should become a strategic priority in 
the fight against organised crime, terrorism and high level corruption in the country.  

There  were  visible  results  on  small  arms  and  light  weapons,  with  171  pieces  of  firearms 
seized  in  2020  and  53  in  the  first  half  of  2021.  In  2020  148  criminal  offences  of  illegal 
production, possession and trading in weapons were detected, for which 156 perpetrators were 
criminally  charged.  Until  June  2021,  77  criminal  offences  were  detected,  for  which  84 
perpetrators  were  criminally  charged.  The  Firearms  Focal  Point  set  up  in  the  Ministry  of 
Interior  should  be  more  operational.  A  structured  database  is  necessary.  However,  North 
Macedonia  has  well-equiped  and  functional  ballistics  laboratory.  The  Ministry  of  Interior 
upgraded 
its  Weapons  Registration  and  Stockpile  Management  Software  (WRMS), 
contributing to easier identification and tracing  of firearms. There is  a lack of legal basis to 
conduct  deactivation  of  firearms  and  the  criminal  law  framework  is  not  in  line  with  the 
standards of the UN Firearms Protocol. 

Regarding  cybercrime,  a  total  of  160  computer  crimes  were  detected,  for  which  88 
perpetrators were criminally charged in 2020. Until March 2021, 20 persons were charged. In 
2020 the number of cases of sexual exploitation of children on the internet decreased by 27% 
compared to 2019. 

39 

 
 
Cooperation in the field of drugs 

Institutional set-up and legal alignment 

A National Drugs Observatory (NDO) exists since 2007 in the Ministry of Health. However, 
it  lacks  sufficient  staff  and  hence  its  operational  capacity  (e.g.  in  terms  of  data  collection) 
remains  limited.  There  is  currently  no  National  Early  Warning  System  to  liaise  with  the 
EMCDDA on new psychoactive substances and new trends. However, in the past, the NDO 
has regularly informed the EMCDDA about the appearance of new psychoactive substances 
in  the  country.  The  country  will  have  to  make  the  necessary  efforts  to  secure  sufficient 
national funding to maintain on-going data collection for all drug-related indicators. 

The 2014-2020 National Drug Strategy is aligned with the 2013-2020 EU Drugs Strategy and 
2017-2020 action plan. The new Strategy for the period 2021-2025 was adopted in July 2021. 
The draft law on Control of Narcotic Drugs and Psychotropic Substances has raised serious 
concerns.  Any  changes  to  the  law  must  comply  with  the  EU  acquis  and  international 
standards.  

Implementation and enforcement capacity 

The operational capacity of the NDO is limited. It needs to have sufficient staff and regular 
cooperation with relevant stakeholders. A national early-warning system needs to be set up.  

In 2020, there was a significant improvement in the prevention of drug trafficking. A total of 
733  criminal  offences  were  recorded,  from  which  857  perpetrators  were  reported.  In  the 
period  January-June  2021,  306  criminal  acts  were  detected,  for  which  criminal  prosecution 
measures  were  taken  against  368  perpetrators.  Six  organised  criminal  groups  with  24 
members (four operating internationally and two  nationally) were uncovered in  2020,  while 
two  organised  groups  of  16  members  were  uncovered  in  2021.  In  2020,  the  Ministry  of 
Interior  seized  1890  kilograms  of  marijuana,  16  kilograms  of  heroin  and  two  kilograms  of 
cocaine.   In the period January – June 2021, one tone of marijuana was seized.  

Cooperation  with  neighbouring  countries  is  good,  including  on  ad  hoc  operations.  In  2020, 
North  Macedonia  participated  in  one  coordination  meeting  organised  at  Eurojust,  in  a  drug 
trafficking case. 

Fight against terrorism 

Institutional set-up and legal alignment  

There  is  a  national  coordinator  for  counter-terrorism  and  countering  violent  extremism  and 
two  deputies  responsible  for  prevention  of  violent  extremism  and  for  the  fight  against 
terrorism. A new coordinator and two deputy were appointed for a term of 4 years in August. 
The office has been reinforced with additional staff in February 2021.  

The  Office  is  responsible  for  coordinating  inter-institutional  cooperation,  in  the  form  of  the 
National  Committee  for  the  Prevention  of  Violent  Extremism  and  the  Fight  Against 
Terrorism,  chaired  by  the  National  Coordinator.  The  Committee  includes  representatives  of 
the key institutions countering terrorism and violent extremism.  

Responsibility  for  terrorism-related  issues  is  with  the  Ministry  of  Interior’s  Department  for 
suppression of organised and serious crime. 

The legal framework is broadly aligned with the EU acquis and international anti-terrorism 
instruments.  

North Macedonia has a national strategy for countering terrorism (2018-2022) and a strategy 
for countering violent extremism (2018-2022), both with related action plans.  

40 

 
 
A    National  Plan  for  reintegration,  resocialisation  and  rehabilitation  of  foreign  fighters 
returnees and members of their families (women and children) was adopted in June 2020, in 
order 
identified  priorities  for  preventing  violent  extremism  and 
to 
radicalisation. 

implement 

the 

The Plan intents to develop a single comprehensive national approach in terms of dealing with 
foreign terrorist fighters and their families. 

The  country  has  been  implementing  the  Bilateral  Implementing  Arrangements  of  the  Joint 
Action  Plan  on  Counter-Terrorism  for  the  Western  Balkans  since  2019.  North  Macedonia 
submitted the second interim report in December 2020. Further efforts are required in order to 
implement all activities envisaged in the arrangements. 

Implementation and enforcement capacity  

There  were  two  anti-terrorist  operations  in  2020,  which  resulted  in  criminal  charges  filed 
against 11 suspects. 

There are currently 11 foreign terrorist fighters in prison, 6 were released from prison in 2020 
and none in 2021. 

143 citizens of the country have left for conflict zones since 2012: of these 69 have returned, 
38  have  been  killed.  There  are  five  active  fighters  in  the  conflict  zones,  while  four  are 
imprisoned in Syria. No one left in 2020 and 2021. In July 2021, 23 people (four men, five 
women and 14 children) were repatriated from Syria and Iraq. 

There is a good and regular exchange of information with Europol. 

Local  mechanisms  for  the  prevention  and  countering  of  violent  extremism  are  in  place. 
Community action teams set  up in  four sensitive municipalities (Cair, Gostivar, Kicevo and 
Kumanovo) have prepared their own action plans. The division of competences between the 
local  and  central  levels  on  prevention  of  radicalisation  and  violent  extremism  should  be 
formally clarified. 

Efforts were made to set up structures and mechanisms to deal with reintegration at the local 
level.  Seven  local  multidisciplinary  teams  have  been  set  up  in  Skopje,  Tetovo,  Kumanovo, 
Gostivar, Ohrid, Struga, Kicevo, Plasinca and  Makedonski Brod. More needs to be done on 
reintegration and resocialisation of returnees.  

Legal and irregular migration 

Institutional set-up and legal alignment  

The legal framework is largely in line with EU standards. The declaration of a state of crisis 
at the country’s borders was extended allowing for the continued deployment of the army.  

The Ministry of Interior is the main actor in the field of migration. The fragmentation of tasks 
between the institutions dealing with migration persists, making management less effective. 

The  Resolution  on  Migration  Policy  adopted  by  the  government  in  2015  is  the  main  policy 
document in this field. In order to prepare a new Resolution, in March 2020 the government 
established an Inter-Ministerial Group for the Creation of Migration Policy. The new strategy 
for integration of refugees and foreigners is still pending adoption. 

The country ratified the 1961 Convention on the Reduction of Statelessness. 

Implementation and enforcement capacity  

The  country  continues  to  play  an  active  role  in  the  management  of  mixed  migration  flows, 
lying on one of the main transit routes for irregular mixed movement. The contingency plan to 

41 

 
 
manage large migratory flows has not yet been finalised. The control of the southern border 
continues with the support of guest officers from EU Member States. 

The country has still not set up a proper protection-sensitive migration management system. 
Registration  of  migrants  was  suspended  at  the  southern  border  from  April  2020  to  January 
2021. There needs to be a systematic registration of all individuals apprehended in irregular 
movement,  for  humanitarian  and  migration  management  purposes.  Following  registration, 
anyone  being  in  need  of  international  protection,  needs  to  be  identified  by  the  systematic 
protection-sensitive  profiling  and  referred  to  national  protection  mechanisms.  The  border 
police  cooperate  with  the  European  Border  and  Coast  Guard  Agency  (Frontex)  for  the 
eventual establishment of a biometric registration system that follows the Eurodac model. In 
the absence of a proper system for managing irregular movements, the practice of returning 
migrants  outside  of  a  legal  and/or  procedural  framework  remains  the  norm.  There  is  no 
available  data  on  how  many  individuals  are  actually  apprehended  on  the  territory  of  the 
country,  which  is  estimated  to  be  almost  the  totality  of  what  the  authorities  define  as 
prevented attempted illegal crossings. 

In  2020,  irregular  movement  through  the  territory  continued  at  an  increased  pace  compared 
with previous years. While specialised international organisations observed 41,257 arrivals in 
2020,  the  country  reported  that  it  had  prevented  32,100  attempted  illegal  crossings. 
Movements are predominantly northward, from Greece towards Serbia. 

In  2020,  nationals  of  Afghanistan  and  Pakistan  constituted  the  largest  groups  (within  the 
mixed  migration  flows),  while  in  2021  a  significant  number  of  nationals  of  Somalia  and 
Eritrea were also noted. People in irregular movement remain the target of organised criminal 
groups engaged in people smuggling often subjecting them to extortion and various forms of 
abuse. 

The number of detected smuggling attempts has increased, and although police operations and 
some arrests took place, smuggling continues on a large scale. In particular, known villages 
close to the northern border continued to be used as smuggling hubs. The country should take 
a  more  methodical  approach  to  fighting  the  smuggling  of  migrants,  including  stepping  up 
cooperation within the EMPACT priority on tackling migrant smuggling. As of August 2021, 
around 97 people were stranded in the country. There are on-going investigations against 25 
individuals  for  the  smuggling  of  migrants.  65  criminal  charges  were  filed  against  92 
individuals  and  12  rulings  were  issued  against  15  individuals  for  cases  opened  in  2021  In 
2020, actions were taken against three criminal groups.  

Both  temporary  transit  centers  on  the  southern  and  northern  borders  provide  short-term 
accommodation for a total of 971 persons, which can be expanded up to 2,000 in emergency 
situations.  Neither  of  the  transit  centres  are  suitable  for  long-term  stays,  and  the  authorities 
continue  to  be  reluctant  to  provide  for  more  than  a  temporary  stay.  The  legal  status  of  the 
transit centres remains to be clearly defined.  

The readmission agreement with the EU is being implemented in a satisfactory manner by the 
country. According to EUROSTAT, 2,360 citizens of North Macedonia were ordered to leave 
in 2020 (3,620 in 2019). There were 1,445 returns following an order to leave (a return rate of 
61%)  in  2020  against  3,005  in  2019  (83%).  Assisted  voluntary  returns  procedures  towards 
third  countries  were  carried  out  for  three  individuals.  Attention  should  be  given  to  the 
successful reintegration of returnees. 

With  the  support  of  EU  and  Member  States’  funding,  the  International  Organisation  for 
Migration  (IOM)  implements  the  Assisted  Voluntary  Return  and  Reintegration  (AVRR) 
programme supporting capacity building of North Macedonia’s return system and facilitating 

42 

 
 
access  to  Assisted  Voluntary  Return.  About  259  refugees  from  Kosovo,  mostly  Roma,  of 
which 14 with refugee status, 122 under subsidiary protection and 123 tolerated, represent a 
vulnerable segment of the society  and are in  need of a sustainable solution.  The practice of 
cancelling subsidiary protection has left some of these individuals without a regulated status 
in the country. 

During August and September 2021, North Macedonia started temporarily hosting some 193 
evacuees/refugees  from  Afghanistan.  They  are  eligible  to  receive  a  90-day  temporary  stay, 
which can be extended. The evacuees were hosted in local hotels, while awaiting resettlement 
to other countries.  

Asylum 

Institutional set-up and legal alignment  

The law on international and temporary protection, adopted in April 2018, is largely aligned 
with  the  EU  acquis.  In  2020,  standard  operating  procedures  related  to  the  registration  of 
asylum seekers and to refugee status determination procedures were adopted. A gap remains 
in the area of the detention for people in irregular movements, as the current legislation does 
not provide alternatives to detention. The law provides the right for family reunification but 
concerns  remain  in  relation  to  delayed  family  reunification  for  persons  under  subsidiary 
protection,  two  years  following  status  recognition,  while  refugees  can  benefit  from  it 
immediately.  As  subsidiary  protection  is  the  prevalent  form  of  protection  granted  in  the 
country, and is often granted to unaccompanied children, such delays may significantly affect 
the  right  to  family  unity  and,  in  the  case  of  children,  contravene  the  principle  of  the  best 
interest of the child. 

Implementation and enforcement capacity  

Asylum procedures still need to be implemented fully in line with the EU acquis. COVID-19 
mitigating  measures  were  successfully  introduced  in  the  Centre  for  Asylum  seekers  in 
Vizbegovo.  As  a  result,  a  very  low  number  of  asylum-seekers  living  in  the  centre  tested 
positive and they were treated on an equal footing with nationals. Despite the good conditions 
in the centre, the high rate of onward movements of asylum-seekers continued. The absence 
of the right to work for asylum-seekers outside of the centre further hampers the prospects for 
inclusion.  The  arbitrary  detention  of  people  apprehended  in  illegal  border  crossing  in  the 
reception  centre  for  foreigners  in  the  Gazi  Baba  municipality  to  ensure  their  testimony  as 
witnesses  in  court  cases  against  smugglers  continued.  A  total  of  78  persons  (37%  of  all 
asylum  applications)  were  detained  in  the  centre  for  foreigners  in  Gazi  Baba  before  being 
released and admitted to the reception center for asylum seekers in Vizbegovo. 

State-run accommodation facilities for persons with specific needs are not available. The time 
spent  in  detention  also  increased.  There  is  still  no  effective  judicial  control  over  detention 
practices  and  migrants  in  detention  do  not  benefit  from  free  legal  assistance.  Due  to  the 
COVID-19  crisis,  the  government  decided  to  allocate  the  transit  centre  Vinojug  as  a 
quarantine centre for asylum seekers. 

Access to asylum procedures continued to be ensured. In 2020, 211 applications for asylum 
were submitted (490 in 2019), out of which 47 (22%) were from Afghanistan, 33 (16%) from 
Pakistan,  26  (12%)  from  Turkey  and  23  (11%)  from  Syria.  There  is  no  backlog  of  asylum 
cases,  although  the  majority  of  cases  are  discontinued,  due  to  the  high  rate  of  claim 
abandonment.  In  2020,  the  Sector  for  Asylum  issued  two  decisions  granting  subsidiary 

 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. 

43 

 
 
                                                           
protection, 39 negative decisions for 46 persons and 201 decisions for the discontinuation of 
asylum procedures for 215 persons. There have  been no positive decisions granting refugee 
status since 2018. 

The quality of asylum adjudication remains a concern, also at the appeal stage. Most of those 
granted  protection  are  vulnerable  persons  and  unaccompanied  or  separated  children.  The 
length of the entire asylum procedure can be very long and often there is not enough emphasis 
on the specific needs of the persons concerned. The judicial review is administrative, and the 
Administrative and High Administrative Courts tend to deliver decisions on technical rather 
than  on  substantial  grounds.  However,  the  new  law  on  administrative  disputes  has  brought 
improvements in some critical areas, such as the procedures for the hearing of the parties, but 
no hearings took place until now.  

The  Sector  for  Asylum  continued  the  practice  of  terminating  international  protection  for 
refugees  from  Kosovo  who  were  granted  subsidiary  protection.  Between  January  and 
December  2020,  23  Kosovo  Roma  lost  subsidiary  protection.  Such  practices  undermine 
possibilities to find lasting solutions for the remaining refugees from Kosovo and closing this 
long-standing  issue.  Legal  aid  under  the  amended  Law  on  Free  Legal  Assistance,  remained 
ineffective.  Reportedly,  no  individuals  undergoing  an  asylum  procedure  were  granted  state-
funded  free  legal  aid.  In  line  with  the  Law  on  Primary  Education,  the  positive  trend  of 
enrolling asylum-seeking children in the local schools continued. 

Further  improvements  in  the  asylum  system  are  still  needed,  especially  regarding  the 
systematic  registration  of  migrants.  The  country  cooperates  with  the  European  Asylum 
Support Office (EASO) on the basis of comprehensive roadmaps. A new Roadmap to support 
the establishment of asylum and reception systems in line with EU standards was endorsed for 
the period 2020-2022. 

Visa policy 

The visa regime is largely aligned with that of the EU. The Commission’s fourth Report under 
the Visa Suspension Mechanism9 of August 2021 concluded that North Macedonia continues 
to meet the visa liberalisation benchmarks. Short stay visas have been unilaterally abolished 
for  nationals  of  third  countries  who  are  national  holders  of  a  permanent  or  temporary 
residence  permit  issued  by  an  EU/Schengen  Member  State  as  well  as  for  nationals  of  third 
countries who are in possession of valid multiple US, Canadian and UK visas. The visa-free 
regime between North Macedonia and Ukraine entered into force. 

The  visa  policy  needs  to  be  further  aligned  for  a  number  of  countries  currently  on  the  EU 
white list, whose nationals are still required to have a visa to enter North Macedonia. The visa 
policy is not fully in line with the EU list of countries whose nationals are subject to a visa for 
short stays in the EU.  

Schengen and external borders  

Institutional set-up and legal alignment  

The Department of Border Affairs and Migration is a specialised unit within the Ministry of 
Interior.  The  border  police  is  structured  into  four  regional  centres,  within  which  police 
stations for border surveillance and for border checks operate. 

The legislative framework for the management of external borders is largely aligned with EU 
standards. The 2015-2019 integrated border management strategy is aligned with the 2006 EU 
concept on integrated border management. The new strategy is under preparation. 

9  COM(2021) 602 final  

44 

 
 
                                                           
Implementation and enforcement capacity  

Mixed  police  patrols  are  being  deployed  on  the  southern  border  involving  members  of  the 
border  police  of  Austria,  Croatia,  Czechia,  Hungary,  Poland,  Slovenia  and  Slovakia,  to 
manage  migration  flows.  The  national  authorities  cooperate  with  the  European  Border  and 
Coast  Guard  Agency  (Frontex),  including  as  observers  in  joint  operations.  The  text  of  the 
status agreement between the EU and North Macedonia, which would allow for deployment 
by Frontex of European border and coast guard teams on the country’s territory at its common 
borders  with  neighbouring  EU  Member  States,  was  initialled  in  July  2018.  Pending  the 
signature  and  ratification  of  the  agreement  which  is  delayed  due  to  a  bilateral  issue,  the 
country  cooperates  with  Frontex  in  developing  an  operational  plan,  allowing  for  the  rapid 
deployment of teams in the country. Signature of the agreement is important, particularly in 
view of possible renewed migratory pressure. 

North Macedonia’s National Coordination Centre, established in 2007, is partially operational 
with  more  progress  required  on  institutional  and  operational  capacity,  IT  and  technical 
expertise. 

Cooperation  with  neighbouring  countries  continues  to  be  good.  There  is  a  smooth 
implementation of border agreements with most neighbouring countries. A formal agreement 
has not yet been concluded with Greece, but bilateral technical cooperation works in practice. 
Joint border patrols with neighbouring countries and the joint police contact centres continued 
to  regularly  exchange  information.  There  are  currently  two  common  border-crossing  points 
for local  traffic  with  Serbia and one with  Albania. Agreements  were signed and ratified for 
the opening of new border crossings with Greece (Markova Noga and Maidan). 

Judicial cooperation in civil and criminal matters  

There  was  limited  progress  regarding  the  legal  framework.  The  application  of  the  Law  on 
International  Private  Law  started  in  February.  A  total  of  five  staff  employed  in  the  unit  for 
mutual  legal  assistance in civil  matters dealt  in  the first  quarter of 2021  with  568 incoming 
and 561 outgoing requests. 

In  April  2021,  Parliament  adopted  a  law  on  international  cooperation  in  criminal  matters. 
There were 1,224 incoming and 741 outgoing requests for mutual legal assistance in criminal 
matters. For the period June 2020 – June 2021, the country sent 395 and received 399 requests 
for transfer of sentenced nationals back to their country of origin, and issued 96 and received 
97 extradition requests. 

Staff in the Department for Mutual Legal Assistance completed English courses. Of the four 
employees in the unit for criminal matters, one is the EUROJUST contact point and another is 
the  European  Judicial  Network  (EJN)  contact  point.  Good  cooperation  with  EUROJUST 
continues.  In  2020,  North  Macedonia  participated  in  36  cases  at  Eurojust,  a  38%  increase 
compared to 2019, most of them relating to swindling and fraud, money laundering and drug 
trafficking. Cooperation should be established with the European Public Prosecutor’s Office 
(EPPO), which started its operational activities on 1 June 2021. 

All aspects of customs cooperation are now covered under Chapter 29 – Customs Union.  

45 

 
 
 
 
 
 
 
2.3.   ECONOMIC DEVELOPMENT AND COMPETITIVENESS 

In  line  with  the  conclusions  of  the  European  Council  in  Copenhagen  in  June  1993,  EU 
accession  requires  the  existence  of  a  functioning  market  economy  and  the  capacity  to  cope 
with competitive pressure and market forces within the Union. 

Economic  governance  has  become  even  more  central  in  the  enlargement  process  in  recent 
years.  The  Commission’s  monitoring  takes  place  in  two  processes:  the  Economic  Reform 
Programme exercise and the below assessment of compliance with the economic criteria for 
accession.  Each  enlargement  country  prepares  an  annual  Economic  Reform  Programme 
(ERP), which sets out a medium-term macro-fiscal policy framework and a structural reform 
agenda aimed at ensuring competitiveness and inclusive growth. The ERPs are the basis for 
country-specific  policy  guidance  jointly  adopted  by  the  EU  and  the  Western  Balkans  and 
Turkey at ministerial level each year. 

2.3.1.   The existence of a functioning market economy 

North  Macedonia  has  made  some  progress  and  is  at  a  good  level  of  preparation  in 
developing  a  functioning  market  economy.  Severely  hit  by  the  pandemic,  the  economy 
slipped into a recession in 2020. A gradual recovery set in as of spring 2021. The government 
implemented a  strong  fiscal  response to  mitigate  the crisis  impact  on households and firms. 
The  fiscal  deficit  rose  to  8.2  %  of  GDP  in  2020  while  the  public  debt  level  rose  sharply  to 
60.2 % of GDP, as additional financing needs had to be covered. Capital expenditure was cut 
in a budget revision to create space for crisis-related transfer payments, yet it was still heavily 
under-executed.  The  authorities 
improve  fiscal 
transparency, although a fully operational state aid registry is yet to be developed. There has 
been little progress made in improving revenue mobilisation and collection, as well as public 
investment  management,  including  through  a  stronger  framework  for  public-private 
partnerships. The new organic budget law, which is expected to significantly improve fiscal 

took  some  additional  measures 

to 

46 

201820192020North Macedonia - Key economic figuresGDP per capita (% of EU-27 in PPS)1)36373838Real GDP growth 2.32.73.2-4.5Economic activity rate of the population aged 15-64 (%), total1)64.865.466.365.5      female51.852.254.854.0      male77.578.377.376.7Unemployment rate of the population aged 15-64 (%), total1)26.921.017.416.6      female26.420.118.616.1      male27.221.516.616.9Employment of the population aged 15-64 (annual growth %)2.32.55.1-0.3Nominal wages (annual growth %)1.65.85.18.3Consumer price index (annual growth %)1.11.50.81.2Exchange rate against EUR61.5961.5161.5161.67Current account balance (% of GDP)-1.9-0.1-3.3-3.5Net foreign direct investment, FDI (% of GDP)2.45.63.21.9General government balance (% of GDP)-3.5-1.1-2.2-8.2General government debt (% of GDP)37.240.640.751.2Notes: 1) EurostatSource: national sources2012-17 average 
 
 
governance, is yet to be adopted by Parliament, and its implementation is delayed. Bolstered 
by  regulatory  easing,  the  financial  sector  remained  strong  and  lending  to  the  private  sector 
constant. The business environment continued to be impeded by the large size of the informal 
economy. 

As the recommendations of the 2020 Report were partly implemented and in order to improve 
the functioning of the market economy, North Macedonia should in particular: 

  Continue  supporting  the  economy  through  well-targeted  fiscal  measures  until  the 
economic recovery is on firm grounds, while anticipating a gradual return to the pre-crisis 
primary deficit in the medium-term; improve revenue collection and broaden the tax base 
in line with the Tax System Reform Strategy, including by streamlining tax exemptions; 

  Adopt  the  Organic  Budget  Law  with  adequate  provision  for  fiscal  rules  in  line  with 
Commission  comments  and  take  the  necessary  legislative  steps  for  the  establishment  of 
the Fiscal Council; 

  Further  reduce  institutional  and  legal  obstacles  to  swift  and  effective  non-performing 
loans (NPL) resolution, including by facilitating out-of-court settlement and modernising 
the insolvency regime.   

Economic governance 

The  government  addressed  the  challenges  from  the  COVID-19  pandemic,  while  at  the 
same  time  making  some  progress  on  important  fiscal  and  structural  reforms.  Between 
March  2020  and  April  2021,  the  government  successively  adopted  five  sets  of  measures  to 
mitigate  the  economic  and  social  impact  stemming  from  the  COVID-19  pandemic.  These 
included subsidies to wages and to employer contributions, tax deferrals, as well as interest-
free  loans.  The  central  bank,  too,  reacted  swiftly  to  support  the  economy,  by  implementing 
four  successive  cuts  in  the  key  policy  rate,  and  regulatory  easing  measures  to  provide 
borrower  relief  and  bolster  bank  lending.  The  government  improved  fiscal  transparency, 
notably by  enhancing  the reporting on the finances  of public enterprises and municipalities. 
However, the most important measure to improve fiscal governance, the new Organic Budget 
Law,  which  contains  provisions  for  fiscal  rules  and  a  fiscal  council,  was  adopted  by  the 
government  in  December  2020,  but  has  not  yet  been  adopted  by  Parliament.  Moreover,  its 
implementation  depends  heavily  on  the  introduction  of  the  new  Integrated  Financial 
Management  Information  System  (IFMIS),  which  is  delayed.  Other  important  reforms  are 
also  lagging  behind,  in  particular  measures  to  combat  the  informal  economy,  and  the 
establishment of a fully functional state aid registry. To address the increased financing needs 
in  2020,  the  government  was  granted  assistance  under  the  International  Monetary  Funds’s 
Rapid  Financing  Instrument  (IMF  RFI),  and  loans  from  the  World  Bank.  It  also  benefitted 
from  macro-financial  assistance  from  the  EU,  which  was  completed  in  June  2021  after  the 
government  had  fulfilled  all  conditions  for  disbursement  of  the  second  tranche.  The  policy 
guidance jointly agreed at the May 2020 Economic and Financial Dialogue between the EU 
and the Western Balkans and Turkey has been partially implemented. 

Macroeconomic stability  

North Macedonia’s economic upswing came to a sudden halt in 2020, as the COVID-19 
pandemic  hit  domestic  and  foreign  demand.  North  Macedonia’s  economy  had  been  on  a 
path  of  accelerating  growth  in  the  two  years  prior  to  the  crisis,  when  the  pandemic  hit  the 
country  in  March  2020.  Domestic  economic  activity  plunged  in  the  wake  of  containment 
measures,  and  external  trade  suffered  from  lockdowns  and  recessions  in  trading-partner 
economies, and through the temporary breakdown of automotive supply chains. Due to falling 

47 

 
 
imports, net exports contributed positively to GDP growth, as did government consumption, 
mitigating  the  impact  of  lower  private  consumption  and  investment.  Household  disposable 
income suffered from a stark drop in remittances from abroad. Investment, which had picked 
up in  the second half of 2019 after two sluggish  years, plummeted in the second quarter of 
2020,  yet  recovered  over  the  summer.  After  a  steep  drop  in  output  between  April  and  June 
2020,  the  annual  decline  gradually  eased  in  the  second  half  of  the  year,  as  containment 
measures  were  lifted  and  foreign  demand 
strengthened.  Overall,  annual  real  GDP 
dropped by 4.5% in 2020. Convergence with 
EU  income  levels  remains  sluggish.  Real 
GDP  per  capita  has 
increased  only 
marginally  in  the  past  five  years,  from  36% 
of  the  EU-28  average  in  2015  to  38%  in 
2020. 

External  imbalances  increased during the 
pandemic. After averaging at 1.5% of GDP 
between 2014 and 2018, the current account 
deficit increased in 2019, and further in 2020, to 3.5%, as private transfers dropped markedly 
below  their  average  of  the  past  five  years,  and  in  spite  of  an  improving  merchandise  trade 
balance.  The  shortfall  was  not  covered  by  net 
FDI  inflows,  which,  against  stark  outflows  of 
intercompany debt, amounted to only 1.9% of 
GDP,  much  below  their  average  of  3%  in  the 
preceding  five  years.  After  having  decreased 
each year between 2016 and 2019, the external 
debt  ratio  rose  in  2020  to  80.2%  (+7.3 pps. 
year-over-year),  mainly  as  a  result  of  foreign 
financing  for  crisis-induced  needs.  However, 
the  structure  of  the  debt  implies  moderate 
risks. About 70% of the total consists in long-
term debt, and the share of intercompany debt and trade credits, which constitute less volatile 
components  of  foreign  debt,  remained  high.  With  substantial  foreign  capital  inflows, 
including  through  two  Eurobonds  issued  in  2020  and  2021,  the  government  bolstered  its 
foreign  exchange  reserves  (+30%  year-over-year  at  end-March  2021),  representing  five 
months of prospective imports. 

Monetary  policy  supports  the  ongoing  economic  recovery,  while  heeding  rising 
inflationary  pressures.  Inflation  was  subdued  until  picking  up  in  the  second  half  of  2020, 
driven by rising prices for food, fuels, including higher excises on oil products, and a statutory 
price  rise  for  electricity  in  August.  In  the  first  half  of  2021,  additional  domestic  price 
pressures  arose  from  services,  in  particular  the  transport  sector.  On  average,  the  consumer 
price index (CPI) rose by 1.2% in 2020, compared to 0.8% in 2019, and further to 2.7% in the 
first eight months of 2021. The currency is in a stable, de facto pegged exchange rate regime 
with the euro. The central bank lowered the key policy rate in March 2020, followed by three 
further  cuts  of  25  bps  each,  to  reach  the 
historic  low  of  1.25%  in  March  2021. 
Overall,  the  monetary  policy  stance  is  in 
line  with  current  economic  fundamentals, 
including still moderate inflation dynamics, 
and  the  need  to  support  the  economic 

48 

-12-9-6-3036-18-15-12-9-6-3036920162017201820192020Graph 2: North Macedonia -Current account selected components and FDI Workers' Remittances balanceGoods and services trade balanceCurrent account balance (rhs)Net FDI (rhs)% of GDPSource: IMF and National Bank of North Macedonia020406080-9-6-303201520162017201820192020Graph 3: North Macedonia -Fiscal developmentsPrimary balance (lhs)Interest (lhs)CG balance (lhs)Public Debt (rhs)Source: National sources% ofGDP-8-4048201520162017201820192020Graph 1: North Macedonia -Real GDP growth and contributionsPriv. cons.Gov. cons.GFCFStocksNet exportsreal GDP growthSource: Macrobond, own calculations% y-o-y 
 
recovery amidst lingering domestic and external risks due to the COVID-19 crisis.  

Public  finances  deteriorated  in  2020,  as  automatic  stabilisers  kicked  in  and  the 
government  implemented  discretionary  support  measures.  Between  2014  and  2019,  the 
general government fiscal deficit was declining each year, in terms of GDP, albeit largely on 
the back of under-execution of budgeted capital expenditure. In 2020, the deficit rose to 8.2% 
of GDP, as revenue declined by 6.9% year-over-year, while current expenditure increased by 
13.9%. The government adopted a range of crisis-support measures in 2020 and early 2021, 
comprised of fiscal measures as well as liquidity support, and including i.a. wage subsidies, 
tax  deferrals,  and  interest-free  loans.  Fiscal  support  from  these  packages  amounted  to  some 
3% of GDP in 2020, with further implementation of measures in the first  half of 2021. Tax 
revenue has recovered since the last quarter of 2020, as containment measures were gradually 
lifted  and  companies  paid  deferred  income  tax  liabilities.  Capital  spending,  at  82%  of  the 
revised budget, was, again, severely under-implemented.10 The government had to resort to a 
budget reallocation and to two supplementary budgets to accommodate the support measures. 
The  composition  of  public  spending  was  hence  tilted  towards  transfer  payments.  Overall, 
shortcomings in revenue collection and a large number of tax exemptions eroding the tax base 
have  contributed  to  a  decline  in  public  revenue  ratios  in  recent  years,  adding  to  fiscal  risks 
from  a  rising  pension  deficit,  large  indebtedness  of  public  enterprises,  and  still  significant 
budget arrears.  

Debt  levels  surged,  as  the  government  needed  to  meet  crisis  related  financing 
requirements  and  roll  over  maturing  debt.  General  government  debt  rose  by  10.5 pps. 
year-over-year to 51.2% of GDP, accounting almost exclusively for the rise in the public debt 
ratio  to  60.2%.  Foreign  borrowing  made  up  a  large  part  of  the  debt  increase,  including  two 
Eurobonds  of EUR 700 million  each, issued by the government  in  May 2020 and in  March 
2021.  

The  government  further  enhanced  fiscal  transparency.  In  2020,  the  Ministry  of  Finance 
started publishing consolidated data of municipalities’ budget execution on its website. This is 
an  important  step  towards  addressing  weaknesses  in  local  governments’  management  of 
public finances. Moreover, the government requires all public and state-owned enterprises at 
state  level  to  publish  quarterly  income  and  expense  statements  with  a  three-to-four  months 
lag,  hence  allowing  for  improved  management  of  fiscal  risks  arising  from  the  finances  of 
these enterprises, many of which run sizeable deficits and have accumulated large debt stocks. 
Still, there is a need for more detailed income and expense statement as well as balance sheets 
for state owned enterprises. Current data presentation does not allow for a meaningful public 
finance  and  fiscal  risks  analysis.  In addition,  the government  set  up  a dedicated website for 
information  on  the  implementation  of  COVID-19  related  support  measures,  including  the 
main beneficiaries. 

The  governance  of  public  finances  was  further  strengthened,  but  concerns  remain 
regarding  the  implementation  of  the  new  Organic  Budget  Law.  In  December,  the 
government adopted a draft Organic Budget Law, which includes provisions for fiscal rules, a 
fiscal council, and a proper medium-term budget framework. However, the law still needs to 
be adopted by Parliament and accompanied by implementing legislation, which could lead to 
protracted implementation. The draft provides for escape clauses proposed for the fiscal rule 
which are too wide and would allow for an accelerated rise in public debt. Enforcement of the 

10 However, this does not account for capital expenditure carried out by off-budget entities, the most significant 
one being the PESR, which is implementing a sizable investment programme of over EUR 1 billion. Central and 
local government habitually accounts for about one third of total public sector investment. 

49 

 
 
                                                           
 
new  law  is  unclear  in  view  of  the  phasing  approach  for  its  enactment.  The  work  on  the 
development  of  the  secondary  legislation  is  still  in  its  initial  phase.  Moreover,  its 
implementation depends heavily on the introduction of the new integrated IT system (IFMIS), 
which is yet to be adopted as well.   

There  is  a  need  to  adopt  robust  fiscal  rules  and  ensure  commitment  to  such  rules. 
Namely, the medium-term fiscal strategy adopted recently that targeted a return to the planned 
fiscal rule, was discredited a week later with the adoption of the 2021 budget revision which 
delayed fiscal consolidation plans until 2025. With a view to improving revenue mobilisation, 
the  government  conducted  a  review  of  foregone  revenues  from  tax  deductions  in  direct 
income taxation and preferential VAT rates, in line with the 2020-2023 Tax System Reform 
Strategy  adopted in  December  2020. Moreover,  the government  adopted  an Action Plan for 
improving  public  investment  management,  based  on  the  recommendations  of  the  respective 
2020  IMF  report.  However,  the  government  has  not  yet  progressed  in  its  project  to  include 
off-budget  entities  into  the  general  government  sector  where  warranted  by  international 
statistical standards.  

The  government  started  work  on  strengthening  the  framework  for  public  private 
partnerships  (PPP).  The  Ministry  of  Economy  is  preparing  draft  amendments  to  the  2012 
PPP law, providing for a streamlining of powers regarding administrative guidelines, contract 
formats, terms and conditions concerning selection, implementation and management of PPP 
projects.  The  draft  also  includes  new  tools  and  processes  to  ensure  better  management  of 
fiscal  risks arising  from  PPP.  However, considerable delays are expected  with regard to  the 
development  and  establishment  of  the PPP  and  concessions  registers  which  would  facilitate 
the implementation of the laws. 

Once the economic recovery firms up, a shift in the policy stance would be appropriate. 
While  the  fiscal  and  monetary  stance  is  still  appropriate  in  light  of  current  financial  and 
economic conditions, the country will need to gradually phase out and reorient crisis-related 
fiscal  support as  the economic recovery  gains  firmer ground. The  government’s response to 
the crisis managed to soften the impact in particular on employment and disposable income. 
In order to support a sustainable economic recovery and faster growth in an effective manner, 
the  government  needs  to  address  major  challenges  facing  the  economy,  such  as  wider 
mobilisation  of  public  revenue;  improved  management  of  public  investment;  investment  in 
human  resources;  and  more  transparent  allocation  of  state  aid.  It  also  needs  to  envisage  a 
gradual  return to  fiscal  consolidation  and debt  stabilisation.  Moreover, the continued rise in 
wages,  bolstered  by  crisis-induced  government  wage  subsidies,  remain  a  challenge  for 
external competitiveness, given the adverse developments in labour productivity over recent 
years. 

Functioning of product markets 

Business environment 

The government takes first steps towards reducing the number of para-fiscal fees. With a 
view  to  streamlining  the  large  array  of  parafiscal  charges  imposed  on  businesses,  the 
government published, on a designated web page, a list containing 377 parafiscal charges at 
central  and  local  level  including  their  value.  The  implementation  of  other  key  measures,  is 
however,  protracted,  such  as  the  2019  Law  on  inspection  supervision  and  implementing 
transparent  and  consistent  procedures  for  inspections.  The  new  bankruptcy  law,  intended  to 
facilitate market exit by reducing the cost and time of procedures, is still under preparation. 
Furthermore, increasing the efficiency and transparency of public administration, reducing the 
time  and  costs  of  commercial  disputes  and  promoting  alternative  dispute  resolution 

50 

 
 
mechanisms  would  address  some  of  the  factors  limiting  the  competitiveness  of  domestic 
companies. 

Challenges posed by the large informal economy are not addressed in a decisive manner. 
The  informal  economy  continues  to  pose  an  important  obstacle  to  business  operations  for 
regulated firms. According to IMF estimates, it could account for as much as 37.6% of GDP. 
The  country’s  informal  sector  takes  various  forms,  of  which  the  most  prominent  are 
unregistered labour, partially undeclared wages and other irregularities in the enforcement of 
the  Labour  Relations  Act.  Other  practices  common  to  the  informal  economy  include  not 
issuing  tax  receipts  or  invoices,  or  underreporting  turnover.  Freelance  work  and  personal 
services  provided  at  home  or  via  the  internet,  the  prevalence  of  which  is  growing,  often  go 
unregistered.  Implementation  of  the  government’s  2018-2020  Action  Plan  to  combat  the 
informal economy remains sluggish. A new Action Plan has yet to be developed and adopted.  

State influence on the product market 

The  government  provided  large-scale  support  in  the  pandemic  and  improved 
transparency  on  these  payments.  The  government  has  consistently  ensured  public 
dissemination of information  related to  the adoption of the COVID-19 support  measures. A 
designated  webpage  is  active  and  contains  information  on  the  condition  and  criteria  for  the 
allocation of the support. All financial transactions related to the payment of the COVID-19 
support, including the amounts of aid and names of beneficiaries, are available on-line in real 
time. The government has also prepared and has made available online a clear overview of the 
implementation  of  the  COVID-19  support  packages  according  to  type  of  aid.  Transparency 
and effectiveness of state aid is affected by the high number of state aid providers, the lack of 
an updated registry, and the still marginal competences of the Commission for the Protection 
of Competition (CPC) in state aid supervision.  

Privatisation and restructuring 

The  public  sector’s  stake  in  the  economy  remains  low  and  unchanged.  In  2020,  the 
number of companies in which the government held a stake remained the same as in the three 
preceding years (16 companies in full state ownership and 40 companies in partial ownership, 
most of these with a state ownership share of below 1% of issued capital.). The total value of 
state ownership in enterprises remained at 10.7% of the GDP. There are currently no plans for 
further privatisations.  

Liberalisation of the electricity and natural gas market has progressed. In early 2020, the 
electricity  market  was  fully  liberalised,  in  line  with  the  2019  Law.  Retail  prices  have  been 
deregulated, except for the universal supplier for which the regulator (ERC) sets the price. At 
end-2020, over 30,000 consumers (per metering points) were purchasing electricity from the 
active suppliers on the open market, under mutually agreed (unregulated) prices. Over 16,000 
retail customers switched suppliers in 2020, more than twice than in the same period one year 
earlier. In September 2020, the government designated a subsidiary of the national electricity 
market  operator  (MEPSO),  to  act  as  the  nominated  operator  of  the  organised  electricity 
market.  The  electricity  transmission  and  distribution  network  operators  are  unbundled  in 
accordance with  the  EU  acquis. The natural  gas  market  was liberalised in 2015. At  the end 
of2020, there were six licensed active natural gas suppliers and natural gas traders. Wholesale 
gas  prices  are  fully  deregulated,  but  the  market  remains  illiquid,  without  a  virtual  trading 
point.  The  gas  transmission  system  operator  is  not  yet  unbundled  in  line  with  the  Third 
Energy Package.  

51 

 
 
 
Functioning of the financial market 

Financial stability 

The authorities strengthened the institutional framework for ensuring financial stability 
but  important  measures  to  bolster  the  financial  safety  net  remain  incomplete.  In  April 
2020, the authorities responsible for the supervision and oversight of different segments of the 
financial  market  signed  a  Memorandum  of  Cooperation  establishing  a  Financial  Stability 
Committee.  A  draft  law  which  will  both  allow  for  the  establishment  of  a  permanent 
committee,  and  assign  the  National  Bank  a  unique  and  leading  role  in  developing  and 
implementing North Macedonia’s macro-prudential and financial stability policies is currently 
being  prepared.  However,  following  regulatory  normalisation,  the  NPL  ratio  is  expected  to 
rise. The new insolvency law could  help  expedite the resolution  of NPLs, but  it  has not  yet 
been  adopted.  In  this  regard,  there  is  also  a  need  to  strengthen  the  framework  for  deposit 
insurance. 

Diversification  of  the  financial  sector  remains  slow.  Banks  continue  to  dominate  the 
country’s  financial  sector,  accounting  for  some  82%  of  sector  assets  at  the  end  of  2020. 
Banking  sector  concentration  remains  moderate  and  was  almost  unchanged  compared  with 
previous  years,  with  some  57%  of  assets  held  by  the  three  biggest  banks.  Ten  out  of  the 
sector’s fourteen banks are predominantly in foreign ownership. The share of foreign in total 
equity has been consistently high in the past five years, at about 75%.  

Bolstered  by  regulatory  easing,  the banking  sector  remained  stable.  The  banking  sector 
remained well capitalised and liquid, reflecting banks’ robust pre-crisis position and support 
from  the  central  bank’s  financial  sector  measures.  The  capital  adequacy  ratio  was  above  its 
level  of  five  years earlier at  end-2020  (+1.2 pps  at  16.7% of risk-weighted assets)  and well 
exceeding  the  regulatory  minimum.  Liquid  assets  account  for  one  third  of  total  assets  and 
cover  more  than  half  of  short-term  liabilities.  The  quality  of  the  loan  portfolio  has  been 
improving gradually since the end of 2013, with the ratio of NPLs falling to a record low of 
3.4%  at  the  end  of  2020,  compared  to  4.8%  at  end-2019.  The  reduction  of  non-performing 
loans continues to be influenced by the mandatory write-off of fully provisioned NPLs11, and 
also  reflects  regulatory  measures  from  March  2020,  which  enabled  banks  to  approve  a 
temporary  moratorium  on  loan  repayments,  providing  greater  flexibility  and  incentives  for 
bank lendingThe central bank’s denarisation strategy is contributing to lowering the share of 
foreign-currency  denominated  loans  and  deposits  in  banks’  portfolios,  and  hence  reducing 
currency risk. At the end of 2020, 44.9% of loans had an FX-component, compared to 46.4% 
five years earlier.  

Access to finance 

Bank lending remained robust, but financial diversification and intermediation are not 
progressing. In 2020, credit to the non-government sector expanded at 6.4% year-over-year, 
compared to 7.2% one year earlier. It slowed down to an average of 4.8% year-over-year in 
the first four months of 2021, as supportive regulatory measures were phased out. As in the 
preceding years, the bulk of credit growth came from household loans, with corporate credit 
growth decelerating compared to 2019. Central bank action as well as liquidity support from 
the  government,  inter  alia  through  European  Investment  Bank-provided  credit  lines  to  the 
Development Bank of North Macedonia, have eased access to finance for companies during 
the pandemic. In March 2020, the central bank lowered reserve requirements for loans to the 

11  From  July  2019,  the  National  Bank  introduced  an  obligation  for  mandatory  write-off  of  non-performing  exposures  that 
have been fully provisioned for more than one year. Until July 2019 (from 1.1.2016 to 30.6.2019), this period was two years. 

52 

 
 
                                                           
most  affected  sectors,  and  in  May  2020,  it  expanded  the  range  of  securities  accepted  from 
banks as collateral in liquidity-increasing operations. 

Functioning of the labour market 

in 

the 

Government support measures have mitigated the negative effect of the pandemic on the 
labour  market.  Job  losses  remained  contained  in  2020,  although  rising  each  quarter.  The 
labour  force  (15-64)  dropped  markedly  (-
2.3%  year-over-year,  end  of  first  quarter 
2021), and the activity rate declined by 1.2 
to  65.3%.  As 
pps 
this  period, 
discouraged  workers 
labour 
left 
market,  the  unemployment  rate  actually 
decreased,  from  17.4%  in  2019  to  16.6% 
in  2020.  However,  structural  deficiencies 
of  the  labour  market  persist,  restraining 
the  most 
potential  growth.  Among 
important  ones  are low participation  rates, 
especially for women. After narrowing by some 7 pps between 2014 and 2019, the gender gap 
widened  again  slightly  in  2020,  in  annual  comparison,  to  22.7  pps,  as  male  labour  market 
participation  dropped  by  less  during  the  pandemic  than  female  participation.  Youth 
unemployment  remains  high,  at  35.7%,  about  the  same  as  one  year  earlier,  although  a 
significant reduction (about 10pps) has been achieved since 2018, more recently supported by 
the  government’s  Youth  Guarantee  scheme.  Women  and  young  people  are  particularly 
exposed to unemployment and inactivity, as are people with disabilities and the low skilled. 
Around  80%  of  unemployed  are  long-term  unemployed,  largely  reflecting  the  skills 
mismatch. The share of informal workers in total employees remained high, at some 14% in 
2019,  according  to  government  data,  even  though  declining  persistently  since  2015.  The 
average tax wedge is regressive in North Macedonia at the bottom of the income distribution: 
the average contribution rate therefore takes a much higher share of the total income of low-
wage earners.  

2.3.2.   The  capacity  to  cope  with  competitive  pressure  and  market  forces  within  the 
Union 

North Macedonia has made some progress in addressing last year’s recommendations and is 
moderately prepared to cope with competitive pressure and market forces within the Union. 
Integration  with  the  EU  in  trade  and  investment  remained  entrenched  also  during  the 
pandemic.  The  level  and  structure  of  trade  and  manufacturing  output  were  affected  by 
lockdowns  and  supply  chain  disruptions,  domestically  and  in  trade  partner  countries.  The 
structure of the industry  is  continuously improving. The deterioration in  labour productivity 
and  price  competitiveness  in  2020  reflects  to  a  large  degree  the  economic  impact  of  the 
pandemic  and  the  government’s  job-retention  measures.  Vocational  Educational  Training 
(VET)  curricula  has  improved.  Still,  skills  shortages,  reflecting  shortcomings  in  education 
curricula, capital investment gaps, and limited integration of domestic firms in global supply 
chains are restricting potential growth. Digitisation of the economy is progressing. 

As some of the 2020 recommendations have not been  fully implemented, North  Macedonia 
should in particular:  

  Speed up the reform of the education system and increase financing for the VET system 

and higher education; 

  Improve access of low-skilled unemployed and vulnerable persons to active labour 

53 

4045505560657001020302014201520162017201820192020Graph 4: North Macedonia -Labour market trends (15-64 age group)Unemployment rate (lhs)Participation rate (rhs)Employment rate (rhs)Source:State Statistical office (SSO) 
 
market measures; 

  Adopt and implement energy efficiency legislation. 

Education and innovation 

Reform of the education system is sluggish and the large skills mismatch persists. While 
North  Macedonia  has  progressed  very  well  in  terms  of  the  number  of  people  with  higher 
educational attainment, curricula are not well suited to equip graduates with necessary skills 
to match labour demand. State financial support for education is insufficient and coordination 
between the education sector and businesses is weak. In 2020, public spending on education 
and training amounted to 3.3% of GDP, compared to an average of 3.7% of GDP in the past 
five years. The government took some steps towards improving vocational education (VET), 
such  as  adopting  several  qualifications  under  the  National  Qualifications  Framework,  and 
introducing  a  reformed  four-year  VET  programme  across  all  schools,  including  a 
strengthened collaboration with private companies.  

Innovation activity remains low. At 0.4% of GDP, the economy’s expenditure on research 
and innovation  has not  increased over recent  years, and remains significantly below the EU 
average. The country remains a modest innovator, according to the EU innovation scoreboard. 
Even  though  government  funding  for  innovation  has  increased  in  2020,  through  the  bigger 
role  of  the  Fund  for  Innovation  and  Technological  Development  (FITD),  private  firms  are 
reserved  about  adopting  new  technologies. The  FITD  invests  in  small  and  medium  sized 
enterprises (SMEs) to improve the innovative capabilities of companies, as well as to support 
adoption  of  new  technologies  contributing  to  private  sector  competitiveness.  Three  public 
calls  were  issued  during  the  reporting  period.  The  impact  of  this  funding  should  be  further 
assessed. Several additional constraints limit innovation activity: insufficient institutional co-
ordination,  funding  limitations,  and  inadequate  support  systems  for  researchers  and 
innovators. 

Physical capital and quality of infrastructure  

Investment  spending  remains  low  in  light  of  major  needs  to  increase  physical  capital. 
Gross capital formation, as a share of GDP, dropped in 2020 to 29.6% from 34.5% one year 
earlier. The share of gross fixed capital formation (GFCF) in GDP has declined gradually in 
the last years, and amounted to 21% in 2019, compared to 24% in 2015. Over half of GFCF is 
typically  accounted  for  by  investment  in  construction.  Public  sector  investment  makes  up 
about  one  quarter  of  the  total  amount  of  GFCF,  mainly  on  account  of  road  construction 
through  the  Public  Enterprise  for  State  Roads.  Meanwhile,  the  need  to  modernise  the 
country’s capital stock, in particular the transport and energy networks, is increasing.   

Regional  transport  connectivity  progresses  slowly.  The  quality  of  transport  infrastructure 
and trade logistics remains low,  notably due to  delays  at  border customs.  When it comes to 
Trans-European networks, Road Corridor VIII needs substantial upgrading to highway level.  
In  June  2021,  the  second  deadline  to  complete  the  construction  of  the  Kicevo-Ohrid 
motorway was missed. Delays in construction works also held up completion of major parts 
of  Road  Corridor  X.  The  construction  of  the  rail  Corridor  VIII  towards  Bulgaria  is  facing 
significant  delays.  The  upgrading  of  cross-border  rail  connections  and  the  facilitation  of 
crossings  on  Rail  Corridor  X  runs  behind  schedule.  The  Joint  Railway  Border  Station  with 
Serbia  at  Tabanovce  is  still  in  its  planning  stage.  Maintenance  and  service  of  regional  and 
local roads and rail systems need to be improved.  

The  digitisation  of  the  economy  is  advancing  further,  but  remains  low  compared  with 
the  EU.  The  percentage  of  households  with  internet  access  at  home  increased  by  10  pps 

54 

 
 
 
between 2015 and 2020, to 79%. A fixed broadband connection to the Internet is used by 88% 
of  household  users,  and  by  92%  of  enterprises  with  ten  or  more  employees,  but  smaller 
companies  still  face  obstacles.  Of  the  total  number  of  enterprises,  54.5%  had  a 
website/homepage. Overall, there is a particular need to increase access to broadband; expand 
available e-government services; and develop digital skills. 

Efforts  towards  energy  diversification  needs  to  be  improved.  The  economy  is 
characterised  by  high-energy  intensity  with  low  efficiency  in  energy  production  and 
consumption. Production  is  highly dependent  on  coal  and imports.  The  government  pursues 
annual targets for raising the share of renewables in energy consumption.  The distribution of 
natural gas, as an intermediate step in the decarbonisatoin process, is advancing, with efforts 
made  to  increase  the  transmission  network.  During  2020,  the  network  length  was 
approximately  200  km,  with  a  distribution  network  of  70  km.  The  total  distributed  quantity 
was  around  350  million  m3.  The  connection  to  regional  gas  pipelines  progresses  slowly. 
Works on the gas interconnection with Greece has not yet started. This project would support 
diversification of natural gas sources and facilitate access to transit pipelines. 

Measures  to  improve  energy  efficiency  are  stalled.  The  government  recently  passed  the 
Law  on  energy  efficiency,  transposing  Energy  Efficiency  and  the  Energy  Performance 
Directives,  and  setting  a  best  practice  for  the  region,  according  to  the  Energy  Community 
Secretariat. However, implementation is hampered by limited human and technical capacity. 
Financing to promote energy efficiency is limited, and plans to set up an Energy Efficiency 
Fund  should  be  prioritised.  There  is  a  particular  need  to  improve  energy  efficiency  in 
buildings. 

Sectoral and enterprise structures 

Manufacturing takes up an increasingly more important share in the economy’s output. 
The  sectoral  and  business  structure  of  the  economy  has  posted  gradual,  though  slow 
transformation  in  the  past  five  years.  The  services  sector  dominates  the  output  structure,  at 
some 64% of total value added. The share of manufacturing has progressively gained ground, 
and stood at 15.3% of value added in 2020. This comes largely as a result of increased foreign 
direct  investment.  The  share  of  agriculture  dropped  below  10%  in  2020.  Over  half  of 
employment was accounted for by service industries in 2020, which is only slightly more than 
five  years  earlier,  followed  by  industry  (33%,  compared  with  31%  in  2015)  and  agriculture 
(12%, down from 17% in 2015). Over 99% of all companies are SMEs, providing over 77% 
of  value  added  in  the  economy  and  an  almost  equal  amount  of  employment.  Supported  by 
government  programmes  for  business  creation  and  innovation,  the  number  of  firms,  in 
particular micro enterprises rose significantly in 2019, according to official data (+23% year-
over-year). 

Economic integration with the EU and price competitiveness 

55 

020406080201220132014201520162017201820192020Graph 5a: North Macedonia -Exports of goodsEUCEFTAOtherSource: WiiW% ofGDP020406080201220132014201520162017201820192020Graph 5b: North Macedonia -Imports of goodsEUCEFTAOtherSource: WiiW% ofGDP 
 
 
Trade  openness  remained  relatively  high.  The  economy  posts  a  high  degree  of  trade 
openness, at 124% of GDP in 2020. This is slightly lower than in the preceding year, as trade 
volumes  declined by  significantly more than GDP. Mainly  reflecting the  geographical  trade 
structure, but also the impact of the pandemic on supply chains, the decline in exports to the 
EU  in  2020  was  less  pronounced  than  for  exports  to  the  CEFTA  region,  while  the  reverse 
holds for imports. In 2020, exports to the EU accounted for 77.5% of total exports, which is 
only slightly less than in 2019, and partly accounted for by the decline in automotive supply 
exports, for which EU economies are the most important destination markets. The EU’s share 
of imports, at 46.3% of total, was also lower than in the preceding year (-4.6pps). The share of 
exports to CEFTA countries (11% of total exports) was lower by 0.4pps, while the share of 
imports  from  CEFTA  countries  increased  by  0.4pps  to  9.6%  of  the  total  in  this  period.  EU 
countries remain the most important investors in North Macedonia, but the EU’s share in the 
total  stock  of  direct  investment  has  declined  between  2014  and  2019,  by  9.4pps  to  72.2% 
(EU-28). 

The economy’s structural transformation remains driven by foreign investors active in 
higher value-added production. An important share of foreign investment in the country is 
allocated  to  higher  value-added  manufactured  goods  (machinery  and  equipment,  chemical 
products).  Accordingly,  their  production  rose  at  the  expense  of  basic  goods  (iron,  steel  and 
clothing).  Since  2018,  domestic  companies  active  in  these  sectors  have  contributed  an 
increasing  share  to  total  exports.  However,  integration  of  domestically  owned  companies  in 
global  production  networks  still  remains  scarce,  mainly  due  to  the  type  of  products 
manufactured  by foreign investors, and their position in the structure of global value chains 
(i.e.  upstream  or  downstream),  but  also  on  account  of  productivity  shortcomings  of  local 
firms.  In  2020,  the  cost  competitiveness  of  the  economy  deteriorated  somewhat  further. 
Labour  productivity  dropped  further,  on  account  of  government-supported  employment  in  a 
year of heavy output decline. Gross  wages,  propped up by  government  anti-crisis  subsidies, 
continued to rise, even though decelerating compared with preceding years. The real effective 
exchange rate (CPI-based) has remained broadly stable in the past five years. 

2.4.   PUBLIC PROCUREMENT, STATISTICS; FINANCIAL CONTROL  

Chapter 5: Public procurement 

EU  rules  ensure  that  the  public  procurement  of  goods,  services  and  works  in  any  Member 
State  is  transparent  and  open  to  all  EU  companies  on  the  basis  of  non-discrimination  and 
equal treatment.  

The  country  is  moderately  prepared  in  the  area  of  public  procurement.  Limited  progress 
was made with the implementation of the bylaws to the Law on Public Procurement and with 
additional  staffing.  Capacities  of  key  institutions,  contracting  authorities  and  economic 
operators have to be further enhanced through continuous training. National authorities should 
implement more effective anti-corruption measures into the procurement cycle. The strategy 
for  the  development  of  the  public  procurement  system  is  not  yet  finalised.  The 
recommendations from the 2020 report were not fully implemented and remain valid. In the 
coming year, the country should in particular: 

  ensure the efficient implementation of the public procurement legal framework, including  
the  development  and  adoption  of  the  Law  on  Public-Private  Partnerships,  the  Law  on 
Concessions and the bylaw on low-value e-marketplace; 

  improve the co-ordination among key players in public procurement and strengthen their 
transparency,  free 
implement 

the  principles  of 

capacities  and 
competition, equal treatment and non-discrimination; 

independence 

to 

56 

 
 
  improve  control  of  public  procurement  procedures  through  efficient  follow-up  and  the 

reporting of irregularities, cases of conflict of interest and fraudulent practices. 

Institutional set-up and legal alignment 

The legal framework on public procurement is largely harmonised with the EU acquis. The 
practice of ‘blacklisting’ of companies due to professional misconduct during the procurement 
phase  continued,  which  is  not  in  line  with  the  relevant  EU  rules.  In  2020,  36  negative 
references  were  issued  by  contracting  authorities,  out  of  which  five  were  rejected  by  the 
Public  Procurement  Bureau  (PPB).  The  finalisation  and  adoption  of  the  Public-Private 
Partnership  Law  and  the  Concessions  Law  is  delayed.  The  adoption  of  the  bylaw  on  low-
value  e-marketplace  is  still  pending  and  the  strategy  for  the  development  of  the  public 
procurement system not finalised. A new draft law on strategic partnership for infrastructure 
projects  has  been  adopted  by  the  Parliament  despite  criticism  by  the  State  Commission  for 
Prevention of Corruption (SCPC).  

The  Public  Procurement  Bureau  continued  to  modernise  and  improve  the  public 
procurement system in the country to enhance its performance and functionalities. However, 
its  monitoring  and  control  competencies  need  to  be  strengthened.  The  cooperation  between 
the  PPB,  the  Ministry  of  Economy  and  the  State  Appeals  Commission  (SAC)  remain 
insufficient. In addition, a more effective exchange of data and information should be ensured 
including with the  Commission for Protection of Competition (CPC), the State Audit Office 
(SAO) and the SCPC. 

In line with the 2020 action plan, the Bureau increased its staff to 38. It organised 14 trainings 
which were attended by 225 participants. Due to the COVID-19 crisis, most of the trainings 
were  organised  online.  In  addition,  three  workshops  for  auditors  from  the  SAO  helped  to 
improve  their  expertise  with  regard  to  the  implementation  of  the  public  procurement  legal 
framework. 

The electronic system for public procurement is functioning efficiently. The development of a 
platform  for  e-marketplace,  e-catalogues  and  further  improvement  of  the  SAC  processing 
system  is  ongoing.  The  contracting  authorities’  annual  procurement  plans  are  regularly 
published on the platform. 

The  capacities  of  the  Ministry  of  Economy,  dealing  with  concessions  and  public  private 
partnerships (PPP), remain limited. The registers on PPP and concessions have still not been 
established. In 2020, the Ministry of Economy organised four trainings on PPP for media and 
non-governmental  organisations  as  well  as  for  central  state  and  local  bodies.  Three  PPP 
contracts were concluded in 2020. 

Implementation and enforcement capacity 

In 2020, the public procurement market dropped to 8% of the country's GDP as compared 
to 11% in 2019. It represented 23% of the state budget. Capacities of contracting authorities at 
the  central  and  local  level  are  uneven  and  have  to  be  further  enhanced  especially  given 
increased transparency and integrity. The use of the most economically advantageous criteria 
is still very limited. Guidelines for the selection of the most economically advantageous bid 
were elaborated and published on the website of the PPB. Continuous training of contracting 
authorities  on  the  application  of  these  criteria  have  to  be  organised.  The  use  of  electronic 
auction is optional but frequently used. 

On monitoring of contract award and implementation, the use of negotiated procurement 
procedures decreased to 5.4% in 2020, as compared to 9.08% in 2019. An assessment of the 
use  of  centralised  procurement  and  framework  agreements  by  the  PPB  is  ongoing.  The 

57 

 
 
proportion of the overall value of public procurement awarded to SMEs slightly increased to 
63%  in  2020  as  compared  to  61.44%  in  2019.  Tender  cancellations  in  2020  increased 
significantly to 30.8% as compared to 18.23% in 2019. 

The e-procurement portal was upgraded and the use of the ‘red flags’ contributed to enhanced 
administrative control from the Bureau. In addition, the electronic archive module allows for 
the integrity of electronic procedures by keeping the documentation in its original electronic 
form, while the e-complaints module provides an electronic exchange of data with the appeals 
procedures. Also, the Law provides for annulment of public procurement contracts as well as 
other possible sanctions, such as fines, imposition of interim measures etc. 

To  increase  transparency,  the  PPB  developed  a  new  functionality  of  the  e-procurement 
system,  enabling the contracting authorities to  mark all contract  award notices linked to  the 
COVID-19 crisis and track these contracts easily. Furthermore, the system feeds the financial 
transparency webpage with data on COVID-19 related public procurement contracts. In 2020, 
there were 2,856 contracts concluded for a total amount of approximately EUR 10 million. 

The  capacity  to  manage  public  procurement  processes  has  to  be  further  enhanced, 
especially  at  the  local  level  to  achieve  a  more  coherent  approach  in  procurement  cycle 
management. The quality of tender documentation remains a challenge for smaller contracting 
authorities. Continuous training of budget users and economic operators on the application of 
the new bylaws has to be ensured. 

As per the Public Procurement Law, contracting authorities are obliged to publish their annual 
public  procurement  plans  as  well  as  concluded  public  contracts  and  their  amendments  to 
ensure increased transparency.  

The  regulatory  and  institutional  mechanisms  on  integrity  and  conflict  of  interest  are  still 
insufficient.  There  is  no  risk  assessment  system  incorporated  into  the  procurement  cycle  to 
ensure  timely  information  on  possible  corruptive  practices  or  irregularities,  including  bid- 
rigging. In 2020, the SCPC investigated eight suspicious cases reported from individuals and 
legal entities and on one case on its initiative. The PPB reported to the State Commission on a 
case where irregularities were observed during contract implementation. 

The role and the capacity of the SAO in performing audits of public procurements have been 
enhanced  through  the  implementation  of  the  new  public  procurement  audit  programme 
providing  updated  guidance  and  methodological  tools  to  auditors.  One  regularity  audit  was 
carried out for emergency public procurements linked to the COVID-19 crisis. (See Chapter 
32 – Financial control). 

Efficient remedy system 

The  legislation  on  the  right  to  legal  remedy  is  broadly  aligned  with  the  EU  acquis.  The 
implementation capacity of the SAC remained insufficient. Given the significantly increased 
number of appeals compared to the past years, there is a need for additional qualified staff to 
ensure  timely  processing  of  the  appeals.  There  is  no  considerable  backlog  of  decisions. 
However, most of them cover exclusively legal and administrative matters rather than issues 
related to the technical substance of the appeals. The number of appeals had grown from 902 
(2019) to 1076 (2020). The resolution rate was 96.4% in 2020. 110 lawsuits were filed against 
the decisions of the Commission and submitted to the Administrative Court for revision. 

58 

 
 
 
 
 
Chapter 18: Statistics 

EU rules require that Member States are able to produce good quality statistics in line with 
the  principles  of  the  European  statistics  Code  of  Practice  and  based  on  professional 
independence,  impartiality,  reliability,  transparency,  and  confidentiality.  Common  rules  are 
provided for the methodology, production and dissemination of statistical information. 

The country has a moderately prepared in the area of statistics. Good progress was made, 
especially  in  preparatory  work  and  conduct  of  the  population  census,  officially  launched  in 
September 2021, for which the legal framework and methodology were adopted. The census 
operation,  the  first  since  2002,  was  completed  on  30  September  2021.  Improvements  are 
noted  in  all  statistical  areas  and  further  aligning  of  sectoral  statistics  with  EU  standards. 
Continued  efforts  are  needed  to  improve  the  scope  and  data  quality  of  macroeconomic  and 
social  statistics.  As  last  year’s  recommendations  were  partially  carried  out,  in  the  coming 
year, the country should in particular: 

  process and publish the results of the population census; 

  continue  to  align  financial  accounts  and  quarterly  national  accounts  with  the  European 

System of Accounts 2010 (ESA 2010); 

  ensure adequate staffing and sufficient financial resources for the State Statistical Office.  

The  legal  framework  for  statistical  infrastructure  is  broadly  in  line  with  the  European 
Statistics Code of Practice. The Statistical Council has met regularly in 2020. Regarding other 
main statistics producers, the central bank is fully committed to the statistical standards’ code 
of practice. The Ministry of Finance has not yet appointed a head of statistics. The IT systems 
of the State Statistical Office (SSO) have been upgraded to increase interconnectivity, storage 
capacity  and  protection  with  the  setup  of  a  backup  system  at  the  national  disaster  recovery 
centre in Prilep from October 2021 onwards. Dissemination of statistical data was realised in 
accordance  with  the  Advanced  Release  Calendar  for  data  publishing.  The  Office  adopted  a 
pro-active  communication  approach  to  inform  citizens  about  the  Census  of  Population, 
Households  and  Dwellings,  including  the  creation  of  a  dedicated  website  as  well  as  social 
media  profiles.  Despite  the  COVID-19  situation,  most  main  statistical  surveys  were  carried 
out.  For  the  first  time,  the  SSO  adopted  a  Handbook  for  Internal  Quality  Audit  of  all 
processes  and  products.  Human  resources  of  the  state  statistical  system  need  to  be  further 
increased and vacancies filled. 

On classifications and registers, the main classifications comply with the EU acquis and are 
updated regularly. Progress was noted in the use of administrative data sources, including for 
piloting the population  census.  The Office finalised the logical  design of the new Statistical 
Business  Register  including  updated  statistical  definitions  in  line  with  the  latest  EU 
regulation,  as  well  as  a  new  delineation  of  enterprise  groups.  The  Statistical  Farm  Register 
was  updated  by  using  data  from  the  administrative  register  of  agricultural  holdings.  Data 
availability and quality improved but still need to further comply with new requirements. Data 
transmission to Eurostat further increased but remains incomplete. 

The  country  made  good  progress  on  macroeconomic  statistics.  GDP  by  production  and 
expenditure approach at current and constant prices are regularly produced and transmitted to 
Eurostat. The timeliness of the publication and transmission of GDP on annual level based on 
quarterly  calculations  improved.  Seasonal  and  calendar-adjusted  data  are  revised  based  on 
methodological improvements. Annual sector accounts are produced in accordance with ESA 
2010. Improvement of the compilation of Quarterly National Accounts (QNA) in accordance 
with  ESA  2010  is  ongoing.  QNA  for  the  government  sector  were  compiled  on  an 

59 

 
 
experimental  basis  for  two  years  (2017  and  2018).  The  supply  and  use  tables  for  2017  in 
accordance with ESA 2010 were published. Progress was made in improving the government 
finance  statistics  (GFS)  and  the  excessive  deficit  procedure  (EDP)  notifications.  The  SSO 
transmitted the October 2020 EDP notification, although not fully filled in. The timeliness of 
preliminary data on  gross value added (GVA) and gross domestic product  (GDP) by region 
and  activities  was  improved.  In  the  area  of  financial  accounts  statistics,  the  National  Bank 
published for the first time the annual financial accounts data and made regular transmission 
of annual financial accounts stock data to Eurostat, with improved methodology and coverage 
for  certain  financial  instruments.  The  National  Bank  produces  statistics  on  the  balance  of 
payments  and  foreign  direct  investment  according  to  the  latest  standards.  It  transmitted  to 
Eurostat detailed FDI data for 2019, by activity and geographical breakdown. 

Structural  business  statistics  and  short-term  statistics  for  the  industry  and  construction 
sectors  are  well  developed.  On  foreign  affiliates  statistics  (FATS),  data  for  2018  were 
published  for  inward  data,  but  not  transmitted  to  Eurostat.  Statistics  on  research  and 
development and on ICT are sufficiently aligned. For services statistics, turnover indices are 
regularly  produced,  disseminated  and  transmitted  to  Eurostat  in  accordance  with  the 
regulation.  The  prices  of  services’  survey  was  piloted  for  transport  services,  and  postal  and 
telecommunication services. The harmonised index of consumer prices data are transmitted to 
Eurostat monthly. The survey on International Trade in Services Statistics has been developed 
but without a detailed geographical breakdown.. Preliminary work to set up tourism satellite 
accounts showed good progress. Transport statistics are produced in accordance with the EU 
acquis. 

Good  progress  was  made  on  social  statistics.  Particularly  relevant  is  the  progress  made  to 
prepare  and  conduct  the  Census  of  Population,  Households  and  Dwellings.  Due  to  the 
COVID-19 pandemic, the census was postponed from April to September 2021. After almost 
20 years, the census was officially launched on 5 September and the data collection process  
lasted until 30 September 2021. The Law and the Methodology for preparing, organising and 
conducting the Census were adopted. They are broadly compliant with the relevant standards 
defined  in  the  European  Union’s  statistical  legislation.  The  survey  on  income  and  living 
conditions  is  regularly  carried  out.  Progress  was  achieved  with  improvements  in  social 
protection statistics. Migration statistics need to be further improved. Labour market statistics 
are  largely  aligned  with  the  EU  acquis.  Activities  are  under  way  to  improve  statistics  on 
crime, education and public health statistics.  

Agricultural statistics are partly in line with the EU acquis. The farm structure survey was 
postponed due to COVID-19. For the annual crop statistics, the EU methodology for surveys 
and the data-editing procedure was tested. The forecast and estimation models for the animal 
production statistics were developed. The questionnaire for fishery statistics was revised and 
aligned to EU standards. Agro-monetary statistics are produced in line with the EU acquis.  

Energy  and  environment  statistics  are  mostly  in  line  with  the  EU  acquis,  including 
environmental  protection  expenditure  statistics,  waste  statistics,  water  statistics,  and 
environment-related taxes’ statistics.  Compilation work has begun  for air  emission accounts 
and physical  energy  flow accounts. Material  flow accounts are  generated, although material 
flow balances are not yet included. The country also provides short-term energy statistics and 
energy balances. The Sample Survey for energy consumption in households was conducted in 
compliance with the EU Regulation 1099/2008.  

60 

 
 
 
 
Chapter 32: Financial control 

Based  on  international  standards,  the  EU  promotes  the  reform  of  national  governance 
systems  to  improve  managerial  accountability,  sound  financial  management  of  income  and 
expenditure, and external audit of public funds. The financial control rules further protect the 
EU’s financial interests against fraud in the management of EU funds and the euro against 
counterfeiting. 

North  Macedonia  is  moderately  prepared  in  this  area.  Limited  progress  has  been  made 
with the improvement of the internal control system and managerial accountability in budget 
users  on  central  and  local  level.  The  implementation  of  the  public  internal  financial  control 
(PIFC) policy paper and action plan has been delayed due to the COVID-19 crisis and limited 
capacities  of  key  stakeholders.  The  functioning  of  the  financial  inspection  is  not  sufficient.  
The independence of the State Audit Office (SAO) is not yet guaranteed by the Constitution. 
The parliamentary oversight of public funds management is not efficient yet.  

In the coming year the country should in particular:  

  adopt  and efficiently implement  the new PIFC law and methodological  tools in  order to 
ensure  improved  transparency,  managerial  accountability  and  sound  management  of 
public funds; 

  enhance the co-operation between State Audit Office (SAO) and Parliament and improve 
implementation  and  follow-up  of  SAO  audit 

parliamentary  scrutiny  of  budget 
recommendations;  

  establish  and  ensure  the  efficient  functioning  of  the  anti-fraud  coordination  (AFCOS) 

network and improve the prevention, management and reporting of irregularities. 

Public internal financial control 

The public internal financial control (PIFC) strategic framework covers priorities defined by 
the 2018-2021 Public Finance Reform programme and by the 2019-2021 PIFC policy paper 
and the 2019-2021 action plan. During 2020, there were delays in the implementation of these 
strategies  due  to  the  COVID-19  crisis  and  limited  resources.  The  PIFC  Committee  and  the 
Public  Finance  Management  (PFM)  Council  continued  to  carry  out  on-line  monitoring  on 
technical  and  political  level.  The  progress  report  on  the  implementation  of  the  PIFC  policy 
paper  covering  the  period  June-December  2020  was  adopted  by  the  PIFC  Committee  in 
March 2021. The adoption of the new PIFC law by Parliament is still pending, together with 
the adoption of the new Organic Budget Law (OBL). Continuous and systematic training of 
experts  in  public  finance  sector  is  expected  to  be  ensured  through  the  establishment  of  the 
Public  Finance  Academy.  The  adoption  of  the  law  on  the  Public  Finance  Academy  is  still 
pending.  

The  efficient  implementation  of  managerial  accountability  remains  a  challenge  for  budget 
users  at  central  and  local  level.  Coherent  application  of  the  manual  on  managerial 
accountability  is  yet  to  be  ensured  together  with  enhanced  delegation  of  powers  by  the 
management level in public entities.  

The legal framework on internal control is harmonised largely with international standards, 
however, its implementation has to be further enhanced. In 2020, the process of adopting risk 
management  strategies  and  risk  registries  continued  both  on  central  and  local  level. 
Nevertheless, their incorporation in main financial control and management processes remains 
insufficient. 

61 

 
 
The  efficient  functioning  of  the  financial  inspection  is  yet  to  be  achieved.  Further 
harmonisation  of  the  legal  basis  is  needed  as  well  as  development  and  implementation  of 
methodological  tools,  which  will  provide  for  sound  financial  management.  Continuous 
training and building up of capacities of financial  officers and inspectors  should be ensured 
too. 

With  regard  to  internal  audit  practice,  a  new  manual  and  guidelines  were  developed  and 
adopted. Currently 164 internal audit units are established, out of which 91 units  - at central 
level and 73 - at local level. However, their capacities to implement internal audit standards 
efficiently remain limited. A national certification system for internal auditors still has to be 
introduced. 

The Central Harmonisation Unit (CHU) continued to provide methodological guidance and 
to coordinate the development of financial management and control and internal audit in  the 
public  sector.  However,  its  capacities  remain  insufficient  especially  concerning  monitoring 
and reporting on the functioning of the overall internal control system. The 2019 annual PIFC 
report  was  adopted  by  the  government  in  August  2020.  An  improved  structure,  scope  and 
procedures of the report have been elaborated and will be implemented following the adoption 
of the new PIFC law. 

External audit 

The State Audit Office (SAO) law is largely harmonised with the International Organisation 
of  Supreme  Audit  Institutions  (INTOSAI)  standards.  Nevertheless,  further  harmonisation  of 
the legal framework is currently on-going in order to ensure improved external audit function 
in  public  sector  as  well  as  enhanced  financial  and  operational  independence  of  SAO.  The 
constitutional amendments providing for SAO's independence are not yet introduced. 

With  regard  to  the  institutional  capacity  of  SAO,  new  acts  for  organisation  and  job 
systematisation  were  adopted  in  2020.  The  number  of  SAO  staff  increased  by  a  total  of  14 
employees,  and  22  employees  were  promoted  to  higher  job  positions.  The  number  of  SAO 
employees  increased  by  over  30%  compared  to  2019.  In  2021,  this  process  continued  with 
additional 15 new staff  and 12 promotions as per the SAO 2021 Annual Employment  Plan. 
The  total  number  of  SAO  employees  is  114,  out  of  which  102  audit  staff  and  12 
administrative support staff. The SAO continued the implementation of the Annual Plan for 
professional development and training of state auditors, though the majority of the trainings 
were held online. The SAO carries out a compliance audit on the final government accounts 
of  the  core  budget  by  June  each  year.  In  2020,  the  audit  coverage  of  the  total  audit 
expenditure  was  59%.  The  SAO  2019  annual  report  on  performed  audits  was  adopted  by 
Parliament in March 2021 and published on SAO’s website. In order to address the challenges 
faced by the country due to the COVID-19 crisis, the SAO included and finalised, under its 
2020  Annual  Work  Programme  two  additional  audits  covering  the  economic  and  social 
measures  of  the  government  for  addressing  the  challenges  of  the  crisis.  Four  additional 
COVID-19 related audits are planned under the 2021 Annual Work Programme. In addition, 
the  following  strategic  documents  were  adopted:  SAO  Communication  Strategy  2020-2023; 
Risk  Management  Strategy  2020  -  2023  and  Risk  Register;  Human  Resources  Management 
Strategy  2020  –  2023;  Guidelines  for  strategic  and  annual  planning  on  audits  and  a  SAO 
strategic  audit  plan  2021-2023.  The  SAO  Annual  Work  Programme  for  2021,  covering  71 
audits, out of which nine performance audits and one IT audit, was prepared and approved in 
December  2020.  Progress  has  been  made  in  raising  public  awareness  of  SAO’s  activities, 
increase interest of media as well as in implementing the Communication Strategy 2020-2023. 

The quality of audit work can be considered as sufficient and harmonised with the INTOSAI 
standards. During 2020, the SAO issued 90 final audit reports which were sent to Parliament 

62 

 
 
and  published  on  the  SAO’s  website.  The  process  of  quality  assurance  of  audits  was 
performed based on the audit quality assurance guidelines and the annual program for quality 
assurance of audit, which was fully implemented in 2020.  

As  regards  the  impact  of  the  audit  work,  the  SAO’s  recommendations  are  not  efficiently 
implemented  by  the  auditees.  In  2020,  84%  of  SAO  audit  recommendations  were 
implemented.  The  co-operation  between  SAO  and  Parliament  has  improved,  however, 
parliamentary scrutiny on budget preparation and implementation has to be further enhanced. 
Transparency and accountability of public funds management has to be ensured on the basis 
of  efficient  monitoring  mechanisms  both  by  the  executive  and  by  Parliament,  including 
through follow-up of audit recommendations provided by the SAO. 

Protection of the EU’s financial interests 

As  regards  EU  acquis  alignment,  national  legislation  is  largely  harmonised  with  the 
Convention on the Protection of the EU’s financial interests. The process of  alignment with 
the  EU  Directive  2017/1371  has  started  and  amendments  to  the  Criminal  Code  were 
elaborated but  yet  to  be  adopted. The  capacities  of the  anti-fraud co-ordination (AFCOS) 
unit at the Ministry of Finance have been enhanced by increasing the staff to four. The legal 
basis for the establishment of the institutional framework (AFCOS network) of the system for 
protection of the EU financial interests has been elaborated and it is expected to be adopted 
following  the  adoption  of  the  Organic  Budget  Law  (OBL).  The  national  anti-fraud  strategy 
(2019-2022) and action plan are being implemented successfully. The 2020 annual progress 
report  was  elaborated  and  adopted  by  the  government  in  May  2021.  Cooperation  with  the 
European Commission continued in 2020, with the national authorities reporting 16 cases of 
irregularities  through  the  irregularity  management  system  out  of  which  13  cases  were 
qualified  as  irregularities  and  3  cases  as  suspected  fraud.  Support  was  provided  by  the 
Financial  Police  and  the  Basic  Prosecutor’s  Office  for  Prosecuting  Organised  Crime  and 
Corruption to OLAF during on-the-spot check operations in the country. 

Protection of the euro against counterfeiting 

As regards EU acquis alignment, national legislation is to some extent harmonised with the 
EU regulations defining the system for the fight  against counterfeiting of the euro. Progress 
has  been  made  by  the  National  Bank  in  carrying  out  a  technical  analysis  and  detection  of 
counterfeit  money,  elaborating  new  methodological  tools  as  well  as  in  timely  exchange  of 
data with national and international authorities. In 2020, the National Bank further improved 
its  capacities  through  continuous  online  trainings  by  involving  experts  from  all  key 
institutions in the system. 

The capacities of the Ministry of Interior to prevent, detect and investigate criminal offences 
related to counterfeiting money, remain limited. There is still insufficient coordination among 
key  institutions  in  the  system.  No  electronic  system  for  exchange,  processing,  analysis  and 
reporting  of  cases  has  been  established.  In  October  2020,  the  National  Bank  concluded  a 
cooperation  agreement  with  the  European  Central  Bank  in  the  field  of  protection  of  euro 
banknotes  against  counterfeiting.  The  country  participates  in  the  Pericles  2020  programme 
and in the regional Balkan Network for Euro Protection initiative. 

3.  

GOOD NEIGHBOURLY RELATIONS AND REGIONAL COOPERATION  

Good  neighbourly  relations  and  regional  cooperation  form  an  essential  part  of  North 
Macedonia’s  European  integration  process  and  contribute  to  stability,  reconciliation  and  a 
climate  conducive  to  addressing  open  bilateral  issues  and  the  legacies  of  the  past.  North 

63 

 
 
 
Macedonia maintained its engagement in a number of regional cooperation initiatives, such as 
the  Central  European  Free  Trade  Agreement  (CEFTA),  Energy  Community,  Transport 
Community,  the  South-East  European  Cooperation  Process  (SEECP)  and  the  Regional 
Cooperation Council. 12 

The  COVID-19  pandemic  has  accelerated  the  ambition  to  enhance  regional  integration,  by 
displaying the important links between markets in the region as well as between the EU and 
the six Western Balkans economies. Given the European perspective of the Western Balkans, 
the EU has continued to treat the region as privileged partners by associating them with the 
Union’s  mechanisms  and  instruments,  including  an  exemption  from  temporary  EU  export 
restrictions of medical equipment.  

At the Sofia Summit on 10 November 2020, which was co-chaired by North Macedonia and 
Bulgaria, the six Western Balkans leaders adopted the Declaration on the Common Regional 
Market  and  the  Declaration  on  the  Green  Agenda  for  the  Western  Balkans.  This  followed 
upon previous commitments  taken at  the EU-Western Balkans  Zagreb summit in  May 2020 
and  the  recognition  of  the  role  of  deepened  regional  economic  integration  to  support  the 
economic  recovery  of  the  Western  Balkans.  The  Common  Regional  Market  is  structured 
around the four freedoms (free movement of goods, services, capital and people)  while also 
covering  aspects  of  digital,  investment,  innovation  and  industrial  policy.  This  makes  it  the 
most  ambitious  regional  integration  effort  to  date  in  the  Western  Balkans.  The  Common 
Regional Market builds on EU rules and standards and represents a stepping-stone to integrate 
the region more closely with the EU Single Market already before accession. 

The  Common  Regional  Market  will  be  critical  in  increasing  the  attractiveness  and 
competitiveness of the region. It will help North Macedonia to speed up the recovery from the 
aftermath  of  the  pandemic,  notably  to  attract  investors  looking  for  diversification  of  supply 
and shorter value chains and to maximise the benefits of the infrastructure investments under 
the Economic and Investment Plan. It is therefore important that all parties play a constructive 
role in building the Common Regional Market and deliver on their joint commitments.  

The Green Agenda for the Western Balkans aims at reflecting the European Green Deal in a 
proportionate  and  adapted  manner  in  the  Western  Balkans.  The  objective  is  to  turn 
environmental  and  climate  challenges,  similar  in  the  region,  into  opportunities.  Given  that 
natural  resources  and  climate  change  do  not  know  any  border,  the  Green  Agenda  foresees 
joint  actions,  which  will  contribute  to  the  sustainable  socio-economic  development  and  the 
green  recovery  of  the  entire  region  in  the  post-pandemic  period.  North  Macedonia  should 
contribute to successfully implement this joint regional vision, with high level of ambition.   

The first high level meeting regarding the implementation of the Agreement on the Protection 
and  Sustainable  Development  of  the  Prespa  Park  Area  took  place  in  June  2021,  including 
ministers of environment from North Macedonia, Albania and Greece.    

The Prespa Forum for Dialogue was organised in July 2021, including with the participation 
of  regional  stakeholders.  The  forum  aimed  at  promoting  regional  cooperation  and  good 
neighbourly relations. 

12  North  Macedonia  also  participates  in  the  ‘Brdo-Brijuni  process’,  the  European  Common  Aviation  Area 
Agreement,  the  Regional  Initiative  for  Migration  and  Asylum,  the  Regional  School  of  Public  Administration 
(ReSPA),  the  European  Strategy  of  the  Adriatic  Ionian  Region  (EUSAIR),  etc.  In  November  2020,  North 
Macedonia  officially  became  the  13th  member  of  the  Organisation  of  the  Black  Sea  Economic  Cooperation 
(BSEC). From January 2021, North Macedonia has taken over the chairmanship of the Western Balkans Funded. 
North Macedonia has the status of observer in the Danube process. 

64 

 
 
                                                           
The Berlin Process summit on 5 July 2021 was an occasion for the Commission to announce 
targeted  assistance  related  to  combating  the  COVID-19  pandemic  and  post-pandemic 
recovery,  as  well  as  the  preparations  of  a  2021  financial  package  under  WBIF  for  the 
implementation of the Economic and Investment Plan. The participants also took stock of the 
achievements of the connectivity agenda with the region, which now includes 45 investment 
projects,  supported  by  EUR  1  billion  in  EU  grants  that  have  leveraged  EUR  3.8  billion  in 
loans.  Regrettably,  despite  good  technical  progress,  the  Western  Balkan  partners  were  not 
able to conclude several important agreements related to the Common Regional Market  and 
CEFTA,  because  of  bilateral  and  status  issues.  The  participating  Member  States  and  the 
Commission called for a constructive approach to making progress on the Common Regional 
Market, which will help the region take full advantage of the Economic and Investment Plan.   
In  July  2021,  the  regional  agreement  on  roaming  fees  signed  at  the  April  2019  Western 
Balkans digital summit in Belgrade entered into force, enabling ‘roam like at home’ (RLAH).   

On 29 July 2021, political leaders from Albania, North Macedonia and Serbia, met to launch 
the Open Balkan Initiative, this aims to remove economic barriers between the three countries 
by 2023. Two memorandums were signed one on trade facilitation and movement of persons, 
the second on steps towards a single labour market. 

The country remained committed to bilateral relations with other enlargement countries and 
neighbouring EU Member States.  

Relations  with  Albania remained  good.  In  February  2021,  during  a  visit  by  the  Minister  of 
Foreign  Affairs  of  North  Macedonia  to  Albania.  During  the  reporting  period,  the  countries 
signed an Agreement for the Recognition of Phytosanitary Certificates and an Agreement for 
joint fisheries management in Lake Ohrid and Lake Prespa. In June 2021, the Prime Ministers 
of North Macedonia and Albania signed an agreement establishing joint border and customs 
controls.  

Relations with Bosnia and Herzegovina are good. Cooperation in the field of EU integration 
takes place within the framework of the Cooperation Agreement between the government of 
North Macedonia and the council of ministers of Bosnia and Herzegovina in the EU accession 
process.  

Relations with Kosovo remained active. The Deputy Prime Minister visited Kosovo in March 
2021, while the Foreign Minister paid a visit to Pristina in April 2021.  

Relations with Montenegro remained good.  In January 2021, the Foreign Minister of North 
Macedonia  paid  an  official  visit  to  Montenegro.  In  March  2021,  Deputy  Prime  Minister  of 
Montenegro paid an official visit to North Macedonia. 

Relations with Serbia continued to intensify. Serbia donated vaccines from its stocks to North 
Macedonia  in  February  2021.  On  that  occasion,  a  meeting  between  the  President  of  Serbia 
and the Prime Minister of North Macedonia took place. The Foreign Minister visited Belgrade 
in February 2021 and held several meetings.  

Bilateral relations with Turkey remain good. The President, the Prime Minister and Ministers 
of Justice and of Health of North Macedonia visited Turkey in April 2021. Turkey sent aid to 
North  Macedonia  in  the  form  of  medical  equipment  to  deal  with  the  COVID-19  crisis. 
Turkey’s economic presence in North Macedonia remains considerable. 

During  the  reporting  period,  there  was  a  particular  focus  on  overcoming  pending  bilateral 
issues  with  Bulgaria,  bringing  further  impetus  to  the  implementation  of  the  Treaty  of 
Friendship,  Good  Neighbourliness  and  Cooperation  and  on  efforts  to  unblock  the  official 
launch  of  accession  negotiations.  North  Macedonia  designated  a  former  Prime  Minister  as 

65 

 
 
Special Envoy for relations with Bulgaria. The Foreign Minister of North Macedonia paid an 
official  visit  to  Sofia  in  November  2020  and  subsequently  met  on  several  occasions  with 
Bulgarian  counterparts.  The  President  of  North  Macedonia  met  the  President  of  Bulgaria  in 
May 2021. The Prime Minister visited Sofia in June 2021 with a set of proposals designed to 
address  differences.  Several  meetings  of  the  Joint  Multidisciplinary  Commission  on 
Educational and Historical Issues took place during the reporting period. Both sides agreed on 
the  re-broadcasting  of  national  television  programmes  in  both  countries.  Correspondent 
offices  of  MIA  in  Sofia  and  the  Bulgarian  Telegraph  Agency  in  Skopje  have  been  opened. 
Despite efforts, the official launch of accession negotiations remains blocked.  

Implementation of the Prespa Agreement with  Greece continued, although at a slower pace. 
The Foreign Minister visited Athens in January 2021 and held meetings with the leadership of 
Greece. Three Memorandums of Understanding were signed during the visit – on investment 
cooperation,  on  training  of  diplomats  and  on  civil  protection.  The  two  countries  are  also 
expanding cooperation in the area of energy. At the end of March 2021, state companies from 
North  Macedonia  and  Greece  signed  several  Memorandums  of  Cooperation  including  on 
possible gas and electricity supplies to North Macedonia. In May 2021, Prime Minister visited 
Athens, where he met with the Prime Minister of Greece on the occasion of his participation 
in the Delphi Economic Forum. In August 2021, the Greek Foreign Minister paid an official 
visit to North Macedonia. The President of North Macedonia paid an official visit to Greece 
in October 2021. 

4. 

ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP 

CLUSTER 2: INTERNAL MARKET  

The  internal  market  cluster  covers:  free  movement  of  goods  (Chapter  1);  freedom  of 
movement  for  workers  (Chapter  2);  right  of  establishment  and  freedom  to  provide  services 
(Chapter  3);  free  movement  of  capital  (Chapter  4);  company  law  (Chapter  6);  intellectual 
property law (Chapter 7); competition policy (Chapter 8); financial services (Chapter 9); and 
consumer  and  health  protection  (Chapter  28).  North  Macedonia  is  moderately  prepared  in 
most  of  the  areas  covered  by  Cluster  2  on  internal  market,  namely  the  free  movement  of 
goods,  services  and  capital,  intellectual  property  and  competition  policy.  Meanwhile,  the 
country has a good level of preparation on company law, although it is still at an early stage 
on freedom of movement for workers. In the reporting period, North Macedonia made limited 
or no progress in all areas, except on free movement of capital, company law and intellectual 
property where it made some progress. Overall, more progress is needed in the coming year in 
the areas covered by this cluster as it is relevant for North Macedonia’s preparations to meet 
the requirements of the EU’s internal market and is of high relevance for the development of 
the Common Regional Market. 

Chapter 1: Free movement of goods  

The free movement of goods ensures that many products can be traded freely across the EU 
based on common rules and procedures. Where products are governed by national rules, the 
principle of the free movement of goods prevents these creating unjustified barriers to trade.  

In  the  area  of  the  free  movement  of  goods,  North  Macedonia  is  moderately  prepared. 
National legislation in this chapter is largely designed to be aligned with the EU  acquis and 
allows  products  to  be  traded  freely.  Limited  progress  was  achieved  in  implementing  last 
year’s recommendations. A new law on general product safety was adopted, but it is not yet 
fully aligned. However, non-tariff barriers to trade remain and market surveillance capacity is 

66 

 
 
 
insufficient.  

As  last  year’s  recommendations  have  been  partly  addressed,  in  the  coming  year,  North 
Macedonia should in particular:  

  complete alignment with the EU General Products Safety Directive;  

  initiate comprehensive screening of non-tariff barriers to trade;  

  strengthen administrative capacity to enforce the legal framework.  

General principles  

The  institutional  framework  for  the  production,  distribution  and  marketing  of  industrial 
products is in place. In December 2020, Parliament adopted a new Law on general product 
safety.  However,  full  alignment  with  the  relevant  EU  acquis  is  not  yet  achieved  as 
corresponding  by-laws  and  laws  on  technical  requirements  are  not  adopted.  Further 
alignment of the national legislation with the EU acquis, as foreseen in the national plan, is 
pending. The strategic plans for accreditation and metrology expired in 2020 and new plans 
have not yet been drawn up. 

Non-harmonised area 

The Ministry of Economy is the main body in charge of the follow-up and implementation of 
compliance with Articles 34-36 of the Treaty on Functioning of the European Union (TFEU). 
Nine  non-tariff  barriers  to  trade  were  partly  removed  with  the  adoption  of  a  rulebook  on 
standards  and  norms  for  design.  The  government  has  started  screening  the  national  legal 
framework to identify other non-tariff barriers to trade. 

Harmonised area: quality infrastructure 

The  administrative  structure  is  fully  functional  for  technical  regulations,  standards, 
conformity  assessment,  accreditation,  metrology  and  market  surveillance.  A  new  horizontal 
strategy for alignment  of the EU  acquis in  the area of  free movement  of  goods needs to  be 
adopted. The National Standardisation Institute, a full member of the European Committee 
for  Standardisation  (CEN)  and  European  Committee  for  Electro-technical  Standardisation 
(CENELEC),  adopted  21,381  European  standards  as  national  standards.  The  Institute 
developed  a  strategy  for  standardisation  2020-2022,  with  support  from  the  International 
Organisation of Standardisation. 

In  June  2021,  there  were  192  active  conformity  assessment  bodies  for  calibration,  testing, 
medicinal  laboratories,  product  and  process  certification  and  inspection.  The  National 
Accreditation Institute is a member of the International Accreditation Forum, the European 
Cooperation  for  Accreditation  and  the  International  Laboratory  Accreditation  Cooperation. 
There  are  no  national  accreditation  schemes  for  the  certification  of  personnel  and  skills 
testing. 

The  Bureau  of  Metrology,  the  national  metrology  body,  is  an  official  member  of  the 
European  Association  of  National  Metrology  Institutes  and  the  General  Conference  on 
Weights and Measures. It has 36 staff members but lacks technical staff. It acquired new mass 
equipment for laboratories and for the preparation and certification of ethanol/water reference 
solutions and the analysis of petrol. This will increase the scope of services of the Bureau.  

During  2020,  the  main  body  responsible  for  market  surveillance,  the  State  Market 
Inspectorate,  devoted  a  significant  part  of  its  activities  and  inspectors  to  monitoring  the 
implementation of health-protective measures in the context of the COVID-19 pandemic. This 

67 

 
 
 
led to a reduction in regular inspections. In 2020, the Inspectorate carried out 428 inspections 
under  the  general  product  safety  law  (up  from  359  in  2019)  and  20  inspections  under  the 
construction  products  law  (down  from  573  in  2019,  also  due  to  less  construction  activity). 
Following these inspections, the Inspectorate withdrew 34 harmful products from the market, 
mostly toys  and children’s clothing. Despite new employments  in  the first  half of 2021, the 
Inspectorate lacks enforcement capacity and operates with an insufficient number of licenced 
inspectors, outdated equipment and insufficient funds to carry out product sample tests. 

Harmonised area: sectoral legislation 

In the area of ‘new and global approach’ to product legislation, the level of alignment with 
the EU acquis is low. National legislation in the area of machinery, lifts, low voltage, pressure 
equipment,  portable  pressure  equipment,  electromagnetic  compatibility,  personal  protective 
equipment,  low  voltage,  gas  appliances,  explosive  atmospheres,  pressure  equipment,  radio 
and telecom equipment is not yet aligned with the latest EU acquis. There was no progress in 
alignment to the EU acquis on toys or on medical devices. 11 relevant pieces of implementing 
legislation drafted in 2020, to align with the EU acquis, have not been adopted. The national 
annexes to the EN Eurocodes have been issued but enforcement has been postponed to 2023. 

Some national legislation under the  ‘old approach’ to product legislation was designed to 
align with the EU acquis. However, in the reporting period, there was no progress on vehicles,  
medicine  for  human  use  and  medicine  for  veterinary  use.  There  was  also  no  progress  since 
2016  in  the  areas  of  the  EU  Regulation  on  Registration,  Evaluation,  Authorisation  and 
Restriction of Chemicals (REACH), nor on chemicals, classification, labelling and packaging 
of  substances  and  mixtures,  good  laboratory  practices,  or  fertilisers  and  detergents.  The 
administrative capacity in the area of firearms was not improved. 

On  procedural  measures,  the  Ministry  of  Economy  and  the  Standardisation  Institute  are 
responsible  for  the  notification  procedures  for  standards  and  technical  regulations.  Public 
authorities performing the relevant checks and supervision are in place and fully operational. 
The licensing, monitoring and control systems for businesses dealing with  drug precursors 
and  civil  explosives  remain  operational.  National  legislation  on  returning  cultural  goods 
unlawfully removed from a Member State is designed to align with the EU acquis. There is no 
external  border  check  on  confirmity  with  product  safety  rules  for  products  imported  from 
non-EU countries. 

Chapter 2: Freedom of movement for workers  

Citizens of  one Member  State have the right to  work in  another Member State and must be 
given the same working and social conditions as other workers.  

The  country  is  at  an  early  stage  of  preparation  in  the  area  of  freedom  of  movement  of 
workers. No progress was made in the reporting period on last year’s recommendations and 
they remain valid.  

In the coming year, North Macedonia should in particular:  

  continue to adapt the legal framework in line with the EU acquis on access to the labour 
market,  in  particular  regarding  non-discrimination  on  grounds  of  nationality  against  EU 
workers;  

  take  steps  to  conclude  further  bilateral  agreements  on  social  security  coordination,  and 
work  on  identifying  which  administrative  measures  should  be  introduced  in  preparation 
for future accession. 

68 

 
 
There was no progress in aligning national legislation with the EU acquis in the area of access 
to the labour market. Employment of foreigners is regulated by the Law on employment of 
foreigners. EU citizens do not have a special status or access to public administration posts, 
except some public positions in the areas of health and education. North Macedonia decides 
on a maximum quota of various types of work permits for foreign workers on an annual basis, 
which can be acquired by submitting a single application to a single authority. In 2020, North 
Macedonia issued 3 672 work permits for foreign workers, of which 593 were for EU citizens. 
There were still no developments to prepare for joining the European network of employment 
services (EURES) upon accession.  

There were no changes in bilateral coordination of social security systems. The country has 23 
bilateral agreements in place 13 with EU Member States. There are, in total,  18 agreements 
for mutual health insurance  that allow people to use healthcare services in another country. 
Of  these,  12  agreements  are  with  EU  Member  States.  Nine  agreements    between  North 
Macedonia  and  EU  Member  States  allow  for  the  use  of  the  European  Health  Insurance 
Card. No new agreements were concluded last year in any of the three areas above. 

Chapter 3: Right of establishment and freedom to provide services 

EU natural and legal persons have the right to establish themselves in any Member State and 
to provide cross-border services. For certain regulated professions, there are rules on mutual 
recognition of qualifications. Postal services are gradually being opened up to competition. 

North  Macedonia  is  moderately  prepared  regarding  the  right  of  establishment  and  the 
freedom to provide services. No progress was made during the reporting period. The postal 
market  opening  was  exceptionally  reversed.  The  Point  of  Single  Contact  is  not  yet  fully 
functional.  More  efforts  are  needed  to  further  align  with  the  EU  acquis  on  recognition  of 
professional qualifications. As last year’s recommendations were not addressed they remain 
valid. In the coming year, North Macedonia should in particular: 

  continue aligning national legislation with the EU acquis, notably on services and mutual 

recognition of professional qualifications;  

  establish a Point of Single Contact, including for company registration, in line with the 

Services Directive;  

  continue  aligning  national  legislation  with  the  EU  acquis  on  postal  services,  including 
with the Regulation on cross-border parcel delivery services, and restore the full opening 
of the postal market to competition. 

On the right of establishment and freedom to provide cross-border services, the country 
continued to update its action plan to address non-compliance of sectoral laws with the new 
law  on  services.  The  implementation  of  this  law  needs  to  improve.  The  preparations  for  a 
Point of Single Contact continued, but remain at an early stage. The upgrade of the e-services 
portal for issuing licenses to business activities, required at national and cross-border level, is 
underway.  Foreign  companies  are  still  not  certified  on  quality  assurance  by  national  public 
administration bodies, which impedes their freedom to provide services. 

The  market  on  postal  services  was  briefly  opened  to  full  competition  on  1  January  2021, 
when  the  reserved  area  of  the  universal  service  was  abolished.  A  legal  amendment  was 
however  introduced  reversing  the  market  opening,  and  consequently  restoring  a  postal 
monopoly,  on  14  July  2021.  The  new  date  for  full  market  opening  is  again  postponed  to  1 
January  2022.  The  Postal  Services  Directive  specifically  foresees  a  gradual  and  controlled 
opening of the postal market to competition in order to enable an orderly transition to the new 

69 

 
 
market  context.  Moreover,  the  Stabilisation  and  Association  Agreement  commits  North 
Macedonia  to  take  the  necessary  steps  to  progressively  align,  not  reverse,  its  national 
legislation  with  EU  acquis.  The  reversal  of  the  market  opening  and  restoration  of  the 
monopoly  is  not  only  not  in  line  with  those  commitments  but  creates  legal  uncertainty  for 
businesses,  operators  and  citizens  alike.  The  independence  and  administrative  capacities  of 
the postal regulator need further strengthening to facilitate the transition towards full market 
opening  and to  enable the regulator to  perform  its  regulatory function.  In 2020, 47 licensed 
postal  service  providers  were  active  on  the  postal  market,  with  licenses  covering  different 
services  and  geographical  areas.  The  institutional  capacity  of  the  Ministry  of  Transport  and 
Communications’ section dealing with the postal sector needs to be strengthened. The Post of 
North Macedonia, the universal service provider, does not yet have a system in place for cost 
accounting and accounting separation, which is  required in a fully liberalised postal market. 
The findings  of the audit  report  by  the State Audit Office on the Post  of North  Macedonia, 
indicating recurrent irregularities, need to be addressed. 

No progress was made on the mutual recognition of professional qualifications. The law on 
recognition of professional qualifications designed to align with the EU  acquis has not been 
adopted  yet.  Legislation  still  needs  to  be  harmonised  with  the  EU  Directive  2005/36/EC  to 
comply  with  the  minimum  training  requirements.  The  data  validation  of  the  professional 
qualifications  electronic  register  still  needs  to  be  finalised  and  the  accredited  professional 
qualifications included. An updated and transparent list of all regulated professions, including 
their  justifications,  has  not  been  prepared.  There  is  a  need  to  strengthen  the  institutional 
capacity of the Ministry of Education and Science’s section dealing with mutual recognition 
of professional qualifications. 

Chapter 4: Free movement of capital 

In  the  EU,  capital  and  investments  must  be  able  to  move  without  restriction  and  there  are 
common rules for cross-border payments. Banks and other economic operators apply certain 
rules to support the fight against money laundering and terrorist financing. 

North  Macedonia  is  moderately  prepared  in  the  area  of  free  movement  of  capital.  The 
country  adopted  measures  to  reduce  restrictions  on  the  free  movement  of  capital  and  to 
facilitate cross-border  payments  but  needs  to  accelerate  reforms. North  Macedonia is  taking 
steps  in  the  right  direction  to  strengthen  the  capacity  to  detect  money  laundering  and  the 
financing of terrorism. Some  progress was made by revising the legislative framework and 
setting up a register of real owners of legal entities. In the coming year, the country should, in 
particular: 

  prepare  a  roadmap  with  actions  and  timelines  to  apply  EU  rules  in  the  area  of  free 

movement of capital;  

  adopt  and  implement  the  new  legislation  on  payment  systems  and  services  in  line  with 

the EU acquis;  

  strengthen  the  capacity  of  relevant  stakeholders  in  fighting  money  laundering  and  the 
financing  of  terrorism,  to  ensure  the  systematic  conduct  of  financial  investigations  in 
criminal cases, and further align with the EU acquis in this area. 

North  Macedonia  maintained  some  restrictions  on  capital  movements  and  payments.  For 
example,  residents  cannot  hold  a  bank  account  abroad,  while  foreigners  can  open  a  bank 
account in the country. Foreigners cannot be owners of agricultural land in the absence of a 
reciprocity agreement. There is a need to finalise a roadmap to apply EU rules in this area in 
line with the obligations under the Stabilisation and Association Agreement. 

70 

 
 
The  oversight  of  payments  systems  is  carried  out  by  the  National  Bank.  After  intense 
consultations  with  the  stakeholders,  the  law  on  payment  systems  and  services  that  aims  to 
align  the  domestic  legislation  with  the  EU  acquis  has  entered  government  procedure.  The 
National Bank has advanced the preparation of the relevant implementing by-laws. To align 
the national  payment system to  the requirements  of the Single Euro Payment Area  (SEPA), 
the  National  Bank  has  also  prepared  a  model  for  the  system  migration  to  the  messaging 
standard according to ISO 20022. 

In the fight against money laundering and the financing of terrorism, efforts were made to 
align  further  with  the  EU  acquis.  The  Law  on  the  fight  against  money  laundering  and  the 
financing  of  terrorism  was  amended  to  harmonise  its  provisions  with  national  legislation 
regulating  misdemeanours,  the  central  population  register  and  electronic  government  and 
services.  Following  the  amendment,  the  Central  Registry  of  North  Macedonia  became 
operational and could register real owners of legal entities. The register provides now clarity 
on  the  ownership  in  the  business  sector  and  contributes  to  increased  security  of  legal 
transactions in the country. Furthermore, the National Bank revised the decisions on opening 
and closing transaction accounts, on opening foreign currency accounts for residents and on 
opening  foreign  currency  accounts  for  non-residents.  The  draft  Law  on  the  fight  against 
money laundering and the financing of terrorism that aims to approximate fully with the EU 
5th  AML  Directive,  including  crypto-assets,  is  in  consultative  procedure  with  the 
stakeholders.  Based  on  the  findings  of  the  updated  National  Risk  Assessment,  the  new 
national strategy for the prevention of money laundering and financing of terrorism, including 
its  action  plan  was  adopted.  It  focuses  on  the  implementation  of  supervisory  activities  and 
preventive  measures  based  on  the  risk  assessment  methodology.  Coordination  among 
institutions  has  increased.  The  National  Council  for  the  prevention  of  money  laundering 
adopted  rules  of  procedures  and  prepared  for  the  upcoming  MONEYVAL  evaluation.  The 
National Bank adopted an anti-money laundering policy for fulfilling its operational role as a 
provider  of  payment  services.  It  still  needs  to  establish  a  central  register  of  bank  accounts. 
Overall,  the  anti-money  laundering  system  needs  to  enhance  the  methodology,  network  and 
infrastructure  to  conduct  a  coordinated  strategic  analysis,  based  on  a  risk  assessment.  The 
Financial  Intelligence  Office  strengthened  its  analytical  capacity  for  data  processing  and 
financial analysis. In 2020, the Office reported 292 cases of suspicious transactions, one less 
than  in  2019.  The  Office  sent  35  reports  (54  in  2019)  of  money  laundering  and  terrorism 
financing  cases  and  122  notifications  (172  in  2019)  of  other  cases  to  the  law  enforcement 
bodies. As a result, 7 people were indicted and 1 convicted for money laundering or terrorism 
financing in 2020. (See also Chapter 23 - Judiciary and fundamental rights and Chapter 24 - 
Justice, Freedom and Security). 

Chapter 6: Company law 

The  EU  has  common  rules  on  the  formation,  registration  and  disclosure  requirements  of  a 
company,  with  complementary  rules  for  accounting  and  financial  reporting,  and  statutory 
audit.  

North  Macedonia  has  a  good  level  of  preparation  in  the  area  of  company  law.  The 
harmonisation with the EU acquis is well advanced on the establishment, registration, merger 
and division of companies. Some progress was made in bringing company legislation further 
in line with the EU acquis during the reporting period, in particular in the field of cross-border 
mergers  and  corporate  governance.  More  alignment  is  needed  in  the  area  of  corporate 
accounting  and  statutory  audit.  The  Law  on  accounting  and  the  Law  on  audit  are  still  not 
adopted.  The  financial  independence  and  institutional  capacity  of  the  Council  for 
last  year’s 
Advancement  and  Oversight  of  Audit  needs 

to  be  strengthened.  As 

71 

 
 
recommendations  were  partly  addressed,  in  the  coming  year,  North  Macedonia  should  in 
particular: 

 

 

further align with the EU company Law acquis, including in the field of shareholders’ 
rights; 

adopt  legislation  on  accounting  and  on  audit  aligned  with  the  latest  EU  acquis  on 
corporate accounting and statutory audit.  

The new amendments to the company Law aim at aligning it with the EU Directive on cross-
border  mergers.  The  project  to  revise  the  Corporate  Governance  Code  is  still  pending.  An 
obligation was introduced to apply the Corporate Governance Code for listed companies, in 
accordance with  the EU  Directive on the annual  financial statements, consolidated financial 
statements  and  related  reports  of  certain  financial  undertakings.  Further  alignment  is 
necessary with the 2019 EU acquis on use of digital tools and cross-border operations, as well 
as with the rules on the encouragement of long-term shareholder engagement.  

The  listing  rules  of  the  country’s  stock  exchange  are  in  line  with  the  requirements  of  the 
Transparency Directive.  

Legislation  on  accounting  remains  to  be  adopted.  The  latest  EU  acquis  on  corporate 
accounting  needs  to  be  incorporated  into  the  new  legislation  on  accounting.  International 
financial  reporting  standards  apply  to  all  companies,  with  no  reduced  obligations  for  small 
and medium enterprises. Reporting requirements for non-financial information are not met.  

On auditing, the legislation on audit as well as on investigations and sanctions remains to be 
adopted. More efforts are needed to strengthen the financial independence and visibility of the 
Council for Advancement and Oversight of the Audit. 

Chapter 7: Intellectual property law 

The  EU  has  harmonised  rules  for  the  legal  protection  of  intellectual  property  rights  (IPR), 
and for the legal protection of copyright and related rights. Rules for the legal protection of 
IPR  cover  for  instance,  patents  and  trademarks,  designs,  biotechnological  inventions  and 
pharmaceuticals.  Rules  for  the  legal  protection  of  copyright  and  related  rights  cover,  for 
instance, books, films, computer programmes and broadcasting. 

North  Macedonia  remains  moderately  prepared  in  this  area.  There  was  some  progress  in 
alignment  with  the  EU  acquis  on  copyright  and  with  the  establishment  of  an  information 
platform  for  law-enforcement  institutions  to  exchange  data  on  the  protection  of  intellectual 
property rights  (IPR).  The recommendations  of the  2020  report  were not fully implemented 
and remain valid. In the coming year, North Macedonia should in particular: 

 

 

further  improve  the  legal  framework  on  intellectual  property,  notably  the  collective 
rights  management  system,  by  aligning  with  the  Collective  Rights  Management 
Directive,  and industrial property  rights  by aligning with  the Enforcement  Directive, 
with the EU acquis on design and with the Trade Secrets Directive ; 

render  fully  operational  the  online  information  platform  for  law  enforcement 
institutions to exchange data on IPRs. 

In  November  2020,  Parliament  adopted  amendments  to  the  Law  on  copyrights,  ensuring 
closer  alignment  with  the  EU  acquis  on  copyright  and  neighbouring  rights.  However, 
authors’ rights  are still managed by only one organisation,  the  Association of Music Artists 
Rights,  issuing  collective  management  licenses.  Parallel  organisations  can  collect  fees  from 
authors without authorisation from the Ministry of Culture. The relevant unit in the Ministry 

72 

 
 
remains understaffed. The authorities plan to transfer this unit  from  the  Ministry of Culture 
into  the  Bureau  for  Industrial  Property,  incorporating  all  IPR  segments  into  one  regulatory 
institution. 

As  for  industrial  property  rights,  the  State  Office  for  Industrial  Property  continued  its 
cooperation  with  the  EU  Intellectual  Property  Office,  the  European  Patent  Office  and  the 
World  Intellectual  Property  Office.  The  authorities  did  not  fully  implement  the  current 
strategy on industrial property rights and need to harmonise legislation with the EU acquis on 
design. North Macedonia still needs to align its legislation on industrial property, in particular 
with the Enforcement Directive and with the Trade Secrets Directive .  

An information  platform for law  enforcement bodies to  exchange  IPR-related data is  being 
set  up  and  has  to  become  fully  operational.  This  will  facilitate  the  creation  of  a  credible 
enforcement  record  and  gather  reliable  statistics  on  the  institutional  handling  of  IPR 
infringements.  The coordination  body  for the protection of intellectual property has  still not 
been set up. 

The fight against counterfeiting and piracy and protection of the interests of rights-holders has 
advanced  further.  The  country’s  track  record  for  seizing  counterfeit  goods,  produced 
nationally as well as imported from Turkey and China, continued to improve. 

Chapter 8: Competition policy 

EU rules protect free competition. They include antitrust rules against restrictive agreements 
between companies and abuse of dominant position, and also include rules on concentrations 
between  companies  which  would  significantly  impede  competition.  EU  rules  also  set  out  a 
system  of  State  aid  control.  Governments  are  only  allowed  to  grant  State  aid  if  restrictive 
conditions are met, with a view to preventing distortion of competition.  

North  Macedonia  is  moderately  prepared  in  the  area  of  competition.  The  legislative 
framework remains broadly harmonised with EU rules, but implementing legislation covering 
antitrust  and  mergers,  as  well  as  state  aid,  needs  to  be  amended.  A  monopoly  was 
reintroduced in the postal sector. Understaffing and budgetary constraints remain an issue for 
the Commission for the Protection of Competition. The enforcement record remains low. No 
progress was made during the reporting period. The same recommendations given in the last 
two years remain therefore valid. In the coming year, the country should in particular: 

 

 

 

strengthen the capacity of the national competition authority; 

increase the transparency of State aid granted by the government; 

further align implementing legislation in the area of State aid and antitrust. 

Antitrust and mergers 

The  country’s  legislative  framework  is  broadly  aligned  with  the  EU  acquis  in  the  area  of 
antitrust and mergers, but implementing legislation has yet to be aligned. On antitrust, there is 
still no leniency policy towards whistle-blowers. 

On the institutional framework, the Commission for the Protection of Competition (CPC) is 
the national authority responsible for implementing the Law on the protection of competition. 
It  has  the  right  to  adopt  enforceable  decisions  on  antitrust  and  mergers,  to  investigate  ex-
officio and handle complaints and notifications. It can impose fines, propose remedies or issue 
an opinion if competition rules are breached. The CPC may approve mergers, with or without 
conditions,  or  prohibit  them.  It  submits  opinions  on  draft  legislation  that  may  affect 
competition. Its opinions are not legally binding. Its decisions, however, are binding and can 
be subject to an appeal before the Administrative Court. 

73 

 
 
The CPC continues to be understaffed, leading to a limited enforcement capacity. Its annual 
budget  remains  insufficientt  and  varies  each  year.  This  raises  concerns  about  the 
independence  and  sustainability  of  operations.  The  poor  capacity  and  inadequate  level  of 
expertise  of  the  CPC  as  well  as  of  the  courts  dealing  with  antitrust  cases  hinder  proper 
enforcement. 

On  implementation,  the  number  of  merger  decisions  increased  from  49  in  2019  to  60  in 
2020. Three decisions in 2020 were adopted on cartels and abuse of dominant position, as in 
2019. The Administrative Court annulled seven decisions issued by the CPC. To strengthen 
enforcement and increase the number of harmful competition  infringements  including fines, 
the  CPC  should  increase  on-site  inspections  and  use  the  leniency  instrument  more  often.  It 
should also continue to make full and transparent use of the possibility of fining, if applicable, 
and  strongly  engage  in  advocating  the  competition  rules  amongst  policymakers  and 
businesses. 

State aid 

The legislative framework on State aid broadly reflects Articles 107 and 108 TFEU and its 
corresponding provisions in the SAA. The required amendments to the Law on State aid and 
its  implementing  legislation  on  certain  forms  of  aid  and  specific  sectors,  including  granting 
aid of minor importance (de minimis) to align with the EU acquis, have not been developed. 
The regional aid map is still outdated and the State aid inventory lacks transparency.  

On the institutional framework, the CPC is also responsible for implementing the  Law on 
State aid. State aid grantors are required to notify the Commission on their plans to grant new 
State  aid  or  alter  existing  State  aid  to  assess  its compatibility.  The  Commission  issues  non-
binding opinions and binding decisions on State aid. So far, the CPC has never exercised its 
power to investigate ex-officio an aid measure not duly notified.  

Regarding  enforcement  capacity,  the  staff  of  CPC  dealing  with  State  aid  control  (four  in 
total)  is  still  insufficient.  Budget  constraints  and  outdated  equipment  hamper  its  operational 
capacity. Further training on the EU acquis is also needed. 

Concerning  implementation,  the  CPC  issued  25  decisions  and  12  opinions  on  State  aid  in 
2020, none of them negative or conditional. The aid grantors need to be reminded publicly, as 
well  as  by  means  of  continuous  internal  advocacy,  of  their  obligation  to  notify  and  obtain 
approval  from  the  CPC  before  implementing  any  aid  scheme.  No  developments  can  be 
reported  on  the  three  cases  the  European  Commission  expressed  concern  on  in  its  previous 
report. First, the scheme financed under the Law on Support for Financial Investments is not 
in line with the EU State aid acquis and needs to be amended. Second, the financial incentive 
scheme  for  Skopje  and  Ohrid  airports  that  grants  financial  support  to  domestic  and  foreign 
airline companies needs to be revised to confirm that it complies with the EU State aid acquis 
and the SAA. Third, the adoption of a Law on strategic investments, without prior notification 
to the CPC. 

The CPC is implementing the measures foreseen in the temporary measures for  overcoming 
the  COVID-19  pandemic  adopted  by  the  EU  in  April  2020.  In  the  reporting  period,  the 
government published two separate calls to support businesses and citizens to overcome the 
COVID-19  crisis,  in  addition  to  the  three  calls  published  in  2019.  The  CPC  enacted  11 
approvals by granting State aid to mitigate the consequences of the pandemic. 

Liberalisation 

Anti-trust  and  State  aid  rules  also  apply  to  state-owned  undertakings  and  undertakings 
entrusted  with  special  or  exclusive  rights,  except  when  applying  them  would  obstruct  the 

74 

 
 
performance  of  the  particular  tasks  assigned  to  them.  The  country  has  not  submitted  an 
enforcement record on public companies. There is no evidence of the existence of commercial 
monopolies  within  the  meaning  of  Article  37  TFEU.  A  monopoly  was  reintroduced  in  the 
postal sector (see Chapter 3 – Right of establishment and freedom to provide services). 

Chapter 9: Financial services 

EU  rules  aim  to  ensure  fair  competition  between  financial  institutions  and  their  stability, 
namely  rules  on  banking,  insurance,  supplementary  pensions,  investment  services  and 
securities  markets.  They  include  rules  on  authorisation,  operation  and  supervision  of  these 
institutions. 

In the area of financial services the country remains moderately prepared. There was limited 
progress  as  the  Financial  Stability  Committee  was  reinstated.  Some  data  were  gathered  on 
vehicle insurance, a recommendation from last year, but this data is not systematised, nor used 
effectively to tackle uninsured driving. As the recommendations from last year were not fully 
implemented, they remain valid. In the coming year, the country should in particular: 

  continue to implement Basel III requirements and complete the activities for designating a 

bank resolution authority; 

  tackle and prevent unregistered and uninsured driving; 

  effectively improve consumer protection against unfair banking practices. 

For  banks  and  financial  conglomerates,  the  implementation  of  the  liquidity  indicators  of 
Basel III have been applied in the banks’ May 2021 reports. Banks maintained stability during 
the  COVID-19  crisis  with  ratios  above  the  required.  One  medium  sized  bank  failed  in  the 
summer  of  2020.  The  Constitutional  Court  initiated  an  assessment  of  the  provision  of  the 
banking  law,  giving  precedence  to  the  reimbursements  from  the  bankruptcy  assets  to  the 
Deposit  Insurance  Fund.  The  banking  law  was  subsequently  amended  to  respond  to  the 
decision of the Constitutional Court. The COVID-19 crisis reinforced the need to strengthen 
the  educational  activities  and  information  sharing  to  protect  consumers  and  prevent  unfair 
banking practices. No progress was made in establishing a financial Ombudsperson. No legal 
provisions on the bank resolution authority are in place. 

On  insurance  and  occupational  pensions,  the  adoption  procedure  for  the  law  aligning 
national rules with the Solvency II Directive has not yet begun. The legislation still allows the 
Ministry of Finance to set premiums for motor vehicle insurance, which is contrary to the EU 
acquis.  Data  on  the  proportion  of  vehicles  that  are  uninsured  is  available,  but  it  is  unclear 
whether they are actually in circulation. No systemic measures are taken to prevent uninsured 
driving.  The  50%  limit  on  investing  in  non-domestic  securities  by  pension  funds  remained,  
contrary  to  the  EU  acquis  and  the  second  stage  of  the  Stabilisation  and  Association 
Agreement. 

Over  the  reporting  period,  there  was  no  development  regarding  financial  market 
infrastructure. The alignment with the Financial Collateral Directive and with the Settlement 
Finality Directive has yet to be completed. The financial stability committee was reinstituted, 
now expanded with members from all financial market regulators and supervisors as well as 
the Deposit Insurance Fund. On securities markets and investment services, the country is 
encouraged  to  adopt  the  long  announced  law  on  capital  markets,  aiming  to  aligning  the 
national legislation to the EU acquis, including provisions prescribing liquidity and solvency 
ratios for brokerage houses. 

75 

 
 
 
Chapter 28: Consumer and health protection 

EU rules protect consumers’ economic interests and in relation to product safety, dangerous 
imitations and liability for defective products. The EU also ensures high common standards 
for tobacco control, blood, tissues, cells and organs, and medicines for human and veterinary 
use.  The  EU  also  ensures  high  common  standards  for  upholding  patients’  rights  in  cross-
border healthcare, and serious tackling cross-border health threats including communicable 
diseases. 

North  Macedonia  remains  moderately  prepared  in  this  area  of  consumer  and  health 
protection. No progress was made in the reporting period. In the coming year, the country 
should in particular: 

  align the legal framework with the EU acquis on consumer protection, particularly with 
regard  to  the  Law  on  Consumer  Protection,  and  strengthen  the  operational  structures 
serving consumer protection;  

  intensify efforts on tobacco control; 

  publish reports on registers for cancer and individual rare diseases and ensure adequate 
funding  and  specialised  knowledge  for  early  detection  and  treatment,  based  on  data 
from the registers. 

Consumer protection 

There was no progress in adopting the law on consumer protection and on aligning national 
product safety rules with the EU acquis. The number of inspections carried out in 2020 by the 
State Market Inspectorate under the general product safety law rose from 359 in 2019 to 428 
and significantly dropped against 2019 under the construction products law. The web platform 
providing  information  on  consumer  protection  still  needs  to  be  developed.  The  mediation 
scheme  continues  to  be  expensive  and  difficult  for  consumers  to  access.  Further  efforts  are 
needed  for  defining  the  guidance  and  procedure  for  consumers’  appeals  and  means  of 
compensation. 

Public Health 

Despite the provision of increased salaries as a retention policy, the health sector faces losses 
of  medical  staff,  particularly  specialists,  who  are  moving  either  to  the  private  sector,  or 
leaving  for  work  abroad.  Staff  continues  to  need  specialised  training  for  using  advanced 
health  equipment.  Access  to  specialist  doctors  in  the  public  health  system  remains 
problematic.  Patients  pay  for  approximately  one  third  of  all  health  services,  without  being 
reimbursed, which increases social discrepancies. 

No progress is noted regarding effective tobacco control, although the institutional and legal 
setup  for  tobacco  control  is  in  place  and  is  in  line  with  the  EU  acquis.  Smoking  in  public 
areas and restaurants is not systematically sanctioned. North Macedonia has still not ratified 
the Protocol to Eliminate Illicit Trade in Tobacco Products (signed in 2014). 

North Macedonia is partly aligned to the EU acquis on communicable diseases, the Law on 
protection  of  the  population  against  communicable  diseases  determines  the  measures  from 
preventing  supervision  over  the  implementation  of  measures.  The  law  defines  a  list  of 
communicable diseases whose reporting is compulsory for the doctors, and a list of biological 
agents whose reporting is compulsory for the laboratories. The 2019-2023 National Strategy 

76 

 
 
 
for control of antimicrobial resistance is in place and in line with the Council of the European 
Union conclusions. 

North Macedonia has been seriously affected by the COVID-19 pandemic. The third wave of 
the  pandemic  stretched  the  capacity  of  the  health  system  to  its  limits  with  up  to  90%  of 
hospital beds occupied. The vaccination started in February 2021. According to the national 
plan, 60% of the population should be vaccinated by the end of 2021. By early October 2021, 
around 35% of the population was fully vaccined. 

North Macedonia has positively responded to the EU’s support mechanisms, some of which 
were  initially  reserved  to  EU  Member  States,  to  address  the  consequences  of  COVID-19 
pandemic.  It  became  a  member  of  the  Joint  Procurement  Agreement  on  medical  counter-
measures as well as an observer in the EU Health Security Committee, which provides access 
to  the  EU  Early  Warning  and  Response  System.  North  Macedonia  is  also  providing  the 
information  to  the  Commission’s  data  collection  system  on  COVID-19  and  nominated  a 
correspondent to the European Centre for Disease Control and Prevention.  

There was no progress on blood, tissues, cells and organs. The country has one Institute for 
Transfusion Medicine, with three regional centres throughout the country. There is no plasma 
collecting centre. Proper funding and further commitment are still needed in order to align the 
national rules with the EU acquis. Concerning patients’ rights in cross-border healthcare 
and national legislation is still not aligned with the EU acquis.  

On health inequalities, the programme for active healthcare allows several target  groups to 
access healthcare, including the Roma community. People living in remote areas can receive 
visits by regional/local doctors. For the people with HIV/AIDS, the Ministry of Health has a 
separate programme that provides funds for testing and basic monitoring tests. Antiretroviral 
therapy  is  available  to  all  after  diagnosis.  The  government  still  needs  to  adopt  a  new 
multiannual strategy to combat HIV. 

Funding for cancer screening remains insufficient. The data from the national and regional 
cancer  registers  are  not  publicly  available.  The  national  programme  on  early  detection  of 
cancer still needs to be implemented.  

There was no progress in the reporting period on medicines for human and veterinary use. 
The draft national strategy 2020-2030 covering aspects of mental health, health promotion 
and  nutrition  or  physical  activity  still  needs  adoption.  On  health  promotion,  several 
programmes and campaigns were initiated to promote healthy lifestyle (Health for All, World 
Day of Physical Activity, World Health Day) in cooperation with the schools and the media. 

The national registers on rare diseases are operational. The definitions of rare diseases are in 
line with the EU definitions.  

CLUSTER 3: COMPETITIVENESS AND INCLUSIVE GROWTH  

Cluster  3  on  competitiveness  and  inclusive  growth  covers:  information  society  and  media 
(chapter 10); taxation (chapter 16); economic and monetary policy (chapter 17); social policy 
and  employment  (chapter  19);  enterprise  and  industrial  policy  (chapter  20);  science  and 
research  (chapter  25);  education  and  culture  (chapter  26)  and  customs  union  (chapter  29). 
Overall, North Macedonia is moderately prepared in most of the areas covered by this cluster, 
including  in  information  society  and  media,  taxation,  enterprise  and  industrial  policy, 
education  and  culture,  and  economic  and  monetary  policy.  However,  additional  efforts  are 
needed  to  bring  these  areas  to  a  higher  degree  of  preparedness. It  has  a  good  level  of 
preparation in the areas of science and research and customs union. Good progress was made 

77 

 
 
 
in  customs  union  and  some  progress  was  made  in  most  of  these  areas.  More  efforts  are 
needed,  particularly  in  areas  where  limited  progress  was  made,  such  as  information  society 
and media, science and research as well as education and culture. 

Chapter 10: Information society and media 

The  EU  supports 
for  electronic 
communications, electronic commerce and audio-visual services. The rules protect consumers 
and support universal availability of modern services. 

internal  market 

functioning  of 

the  smooth 

the 

In  regards  to  information  society  and  media,  North  Macedonia  is  moderately  prepared. 
Limited progress was made during the reporting period as the country adopted amendments 
to  the  law  on  electronic  communications.  However,  electronic  services  for  citizens  and 
businesses increased.  

the 

As 
have 
coming year the country should in particular: 

recommendations 

2020 

not 

been 

fully 

addressed, 

in 

the                                                                                                                                                                                                                                                                        

  finalise  and  adopt  the  long-term  information  and  communication  technology  (ICT) 

strategy; 

  strengthen  the  independence  and  capacity  of  the  media  regulator,  the  public  service 

broadcaster and of the regulator on electronic communication; 

  continue  to  implement  the  action  plan  introducing  the  112  emergency  number  and 

allocate the necessary financial resources to ensure its functionality. 

North  Macedonia  continued  to  successfully  implement  the  Digital  Agenda  for  the  Western 
Balkan  and  the  Regional  Roaming  Agreement.  Citizens  benefit  from  the  regional  roaming-
free zone since 1 July 2021. Implementation of the 2019-2023 national broadband operational 
plan slowed down. Deployment of broadband infrastructure is expected to decrease the rural-
urban divide and to bring economic benefits to the country. Implementation of the 2018-2022 
national  cybersecurity  strategy,  fragmented  among  various  stakeholders,  requires  additional 
efforts. Final steps are being taken to introduce the 112 European emergency number.  

On electronic communications and information technology, 73.58% of the total number of 
households  have  access  to  broadband  internet,  while  nation  wide  broadband  coverage  is 
99.08%.  Mobile  broadband  take-up  is  64.95%.  Telecom  operators  invested  in  testing  5G 
technology.  Amendments  to  the  Law  on  Electronic  Communications  were  adopted  in  April 
2021.  They  envisage  new  responsibilities  for  the  regulator  with  regard  to  prior  security 
approval  for  installation  of  5G  equipment  by  the  telecom  operators.  Telecom  operators 
expressed  criticism  for  the  absence  of  consultations  on  the  measures.  There  has  been  no 
further progress to finalise the draft Law on Security of Networks and Information Systems, 
prepared  in  2019.  Concerns  remain  over  the  independence  of  the  regulator  for  electronic 
communications  and  over  the  appointments  to  the  regulator’s  commission  and  the 
management  of  the  Agency  for  Electronic  Communications.  The  Law  on  Electronic 
Communications and the Law on Audio and Audio-visual Media Services need to be further 
aligned with the EU acquis. 

There were no relevant developments on competitive safeguards during the reporting period. 
Further efforts are needed to improve competition in the telecom sector. 

Regarding  information  society,  a  long-term  information  and  communication  technology 
(ICT) strategy was prepared, but its formal adoption is delayed. A strategy for development of 
digital skills will be part of the ICT strategy and its action plan. Improving digital literacy is a 

78 

 
 
priority under the education strategy. The national e-portal for services is being upgraded with 
more than 130 services. The use of the interoperability system continues to be hampered by a 
lack of communications software in many institutions, and a lack of will to make full use of 
its  potentials.  Greater  efforts  by  and  improved  coordination  between  institutions  are  still 
needed  to  modernise  and  digitalise  the  public  administration,  including  for  the  planned 
establishment  of  an  Agency  for  Digitalisation  and  Registers.  The  data  in  the  population 
register need to be fully uploaded and checked. It should also be used to cross-check census 
data. With regard to e-commerce, the National Bank reported a five-time increase of Internet 
transactions  by  citizens  in  2020  compared  to  2019.  Yet,  the  progress  of  e-commerce  in  the 
country is moving at a slow pace. Further efforts are needed for unlocking the potential of the 
digital transformation of the country.  

On audio-visual policy, Parliament still did not appoint the members of the media regulator 
and the public broadcaster councils in accordance to the Law on audio and audio-visual media 
services. In February 2021, the Constitutional Court annulled the controversial provisions of 
the audio-visual law requiring cable operators to submit statements under moral, material and 
criminal  liability  on  regulated  intellectual  rights.  The  authorities  initiated  preparations  for 
revision  of  media  legislation  in  order  to  align  it  with  the  EU  acquis  and  international 
standards. 

In order to mitigate the effects of the COVID-19 pandemic, the authorities supported media 
measures,  such  as  exemption  of  payments  for  the  transmission  costs,  radio  frequencies, 
licensing fees, social security contributions to the salaries of journalists and media workers, as 
well  as  direct  support  to  print  media.  However,  the  government  continued  to  use  its 
discretionary  right  in  the  distribution  of  state  funds  to  the  broadcasting  sector,  further 
decreasing the allocations for the public service broadcaster, media regulator and broadcasting 
public  enterprise,  contrary  to  the  requirements  introduced  in  the  law  on  Audio  and  Audio-
visual Media Services. 

The media regulator continued to be proactive in the promotion of the media literacy and in 
warning  against  inflammatory  or  discriminatory  language,  hate  speech,  unprofessional 
journalistic  reporting,  as  well  as  on  pressure  and  threats  on  journalists  and  media  outlets. 
Transparency of media ownership is a legal obligation for the audio-visual and print media, 
however there are no legal obligations for the online media. The fight against disinformation 
and  activities  related  to  media  literacy  are  mostly  carried  out  by  civil  society.  Enhanced 
efforts and inter-institutional cooperation on the side of the authorities is needed. The audio-
visual  sector  continued  to  benefit  from  the  country’s  participation  in  the  Creative  Europe 
Media sub-programme with five projects being supported. 

Chapter 16: Taxation 

EU rules on taxation cover value-added tax, excise duties and aspects of corporate taxation. 
They  also  deal  with  cooperation  between  tax  administrations,  including  the  exchange  of 
information to prevent tax evasion. 

The country is moderately prepared in this area. Some progress was made in reducing the 
administrative burden for taxpayers and through the upgrading of e-tax services. The 2021-
2025  Tax  System  Reform  strategy  was  adopted  in  December  2020.  As  not  all 
recommendations of 2020 report were implemented, in the coming year, the country should 
in particular: 

  further  improve  the  capacity  of  the  tax  administration  by  efficiently  implementing  the 

tax system reform strategy; 

  develop  a  new  integrated  IT  tax  system  for  the  Public  Revenue  Office,  improve  its 

79 

 
 
compliance risk management and further extend e-services for tax payers; 

  Start  preparation  for  putting  in  place  a  mechanism  for  the  effective  implementation  of 
the  automatic  exchange  of  tax  information  with  EU  Member  States  in  line  with  the 
OECD Global Standard. 

On  indirect  taxation,  the  Law  on  VAT  was  amended  in  the  reporting  periodintroducing  a 
preferential tax rate of 5% on craft activities and a preferential rate of 10% on restaurants and 
catering services (excluding alcoholic beverages). Provisions for tax exemption for donations 
related to COVID-19 were introduced and will remain in force until the end of 2021. Delays 
remain  in  the  VAT  refund  process,  since  only  38%  of  claims  are  refunded  within  the  legal 
deadline. Nevertheless, long delays are now less common. Regarding excise duties, the new 
excise module of the Customs Declaration and Excise Document Processing System (CDEPS) 
shifting  paper  to  digital  procedures  is  implemented.  The  Law  on  Excise,  provides  for  full 
electronic monitoring of excise goods under duty suspension. 

Regarding  direct  taxation,  a  flat  10%  rate  applies  to  personal  income  tax.  Interests  on 
savings  and  capital  gains  on  securities  remain  exempt.  The  Ministry  of  Finance  started 
publishing  a  calendar  on  the  planned  changes  in  tax  legislation  as  a  tool  for  better 
transparency. 

On  administrative  cooperation  and  mutual  assistance,  North  Macedonia  has  signed  50 
double  taxation  agreements  including  with  all  EU  Member  States  except  Portugal,  Greece, 
Cyprus  and Malta. The  country  has not  yet  committed to  the OECD standard for automatic 
exchange of financial account information, thus there is no date set for the start of automatic 
exchange of information. The Mutual Assistance Convention in Tax Matters is applied as of 1 
January  2021.  The  country  remains  committed  to  implement  the  Inclusive  Framework  on 
Base Erosion and Profit Shifting (BEPS) minimum standards. 

Regarding  operational  capacity,  computerisation  and  the  informal  economy,  the  Public 
Revenue Office still has to improve its business processes, implement a new integrated IT tax 
system,  develop  compliance  risk  management  as  a  core  function  and  further  extend  e-
services. The 2021-2025 Tax System Reform Strategy was adopted in December 2020 and an 
Action  Plan  for  its  implementation  in  2021  is  underway.  The  Public  Revenue  Office  is 
facilitating  voluntary  compliance  by  issuing  pre-filled  annual  tax  returns  through  the 
electronic personal tax platform, which was further upgraded. Implementation of the scheme 
for  monetary  inducement  for  customers  to  require  invoices  and  tickets  on  their  purchases 
continued,  with  the  aim  of  combating  the  informal  economy.  The  Public  Revenue  Office 
continues  to  take  part  in  joint  inspections  with  other  national  bodies  to  identify  unpaid  tax 
liabilities and unregistered taxpayers to improve tax collection. 

Chapter 17: Economic and monetary policy 

EU  rules  require  the  independence  of  central  banks  and  prohibit  them  from  directly 
financing the public sector. EU Member States coordinate their economic policies and are 
subject to fiscal, economic and financial surveillance. 

The  country  remains  moderately  prepared  in  the  area  of  economic  and  monetary  policy. 
Some progress was made following the government’s submission of the organic budget law 
to Parliament, including a provision on a fiscal rule The measures to counteract the socio-
economic  impact  of  COVID-19  were  successfully  implemented.  As  not  all  2020 
recommendations  were  implemented  in  the  coming  year,  North  Macedonia  should,  in 
particular: 

  amend the civil service law to grant the Central Bank full independence;  

80 

 
 
  adopt  the  new  organic  budget  law  that  includes  fiscal  rules,  arrangements  for  an 
independent  fiscal  council  and  introduces  a  proper  comprehensive  medium-term 
budgetary framework;  

  provide  support  to  households  and  companies  through  well-targeted,  transparent  and 
efficient  fiscal  measures  until  the  post-COVID-19  recovery  is  firmly  under  way;  then 
refocus on building fiscal buffers and reducing debt. 

On monetary policy, the alignment of the country’s legal framework with the EU acquis is at 
an  advanced  stage.  No  progress  was  made,  however,  on  further  aligning  legislation  to  fully 
ensure  the  central  bank’s  financial  and  institutional  independence.  A  fully  independent 
institution, free from interference from other powers, is vital to fulfill the central bank’s role 
as  guarantor  of    monetary  and  financial  stability.  During  the  COVID-19  induced  crisis,  the 
central  bank  managed  to  maintain  the  financial  stability  and  provided  significant  credit 
support for the citizens and the companies.  

Regarding economic policy, the draft organic budget law is in the parliamentary procedure. 
The draft organic budget law foresees the establishment of fiscal rules, an independent fiscal 
oversight  body  and  a  medium-term  budgetary  framework.  To  enhance  further  the 
transparency  and  accountability  of  the  budget  transactions,  the  Ministry  of  Finance  on  its 
webpage introduced a fiscal counter and a fiscal calendar. To consolidate public debt in the 
medium term, the 2021-2025 Growth Acceleration Financing Plan is in the process of internal 
consultation  with  the  government.  It  will  seek  innovative  ways  (e.g.  guarantees  schemes, 
privatisation  andexport  funds)  to  mobilise  private  investment.  To  increase  execution  of  the 
state budget, the Ministry of Finance introduced a Capital Expenditure Efficiency mechanism. 
The initial outcome of the fiscal policy response to mitigate socio-economi consequences of 
the  COVID-19  pandemic  is  satisfactory.  Measures  foreseen  in  terms  of  wage  packages  and 
creation of new jobs proved relevant and credible.  

The 2021-2023 Economic Reform Programme was submitted on time. The country was the 
best performer  for the implementation of he Policy Guidance adopted in the Joint Dialogue 
between the EU, Western Balkans and Turkey in May 2020. To select the most appropriate 
structural  reform  measures,  the  country  started  developing  the  capacity  to  assess  the 
economic, social and environmental impacts of economic policies. 

Chapter 19: Social policy and employment  

EU  social  rules  include  minimum  standards  for  labour  law,  equality,  health  and  safety  at 
work and non-discrimination. They also promote social dialogue at European Union level.  

In  regards  to  European  standards  on  social  policy  and  employment,  the  country  remains 
moderately prepared. There was some progress in the reporting period in implementing a 
number  of  mitigating  socio-economic  measures  to  address  the  impact  of  COVID-19  and 
increasing  the  amount  of  social  assistance  benefits.  Implementation  of  the  new  Social 
Protection Act led to a slight reduction in the poverty rate, which remains worringly high.  

Last  year's  recommendations  were  not  fully  implemented  and  remain  valid.  In  the  coming 
year, the country should, in particular: 

  continue  to  implement  activation  measures  for  long-term  and  low-skilled  unemployed 
people,  including  women,  persons  with  disabilities  and  Roma,  and  ensure  proper 
monitoring and evaluation of such measures; 

81 

 
 
  improve the capacities of the State Labour Inspectorate to address issues related to safety 
at  work  and  implement  a  system  to  monitor  the  occurrence  of  injuries  and  fatalities  at 
work; reinforce bipartite social dialogue between employers and workers; 

  continue the provision of assistance to all vulnerable groups and support for, and reform 
of,  the  social  protection  system  with  stronger  links  to  both  employment  activation 
measures and social inclusion.  

The  labour  legislation  in  force  provides  for  fair  and  equal  treatment  of  workers  and  a 
relatively  good  protection  in  case  of  dismissal.  Work  on  the  new  labour  law  continued 
through  comprehensive  consultations  with  stakeholders.  The  capacities  to  implement  the 
labour policies and legislation remain insufficient. Although the capacities of the State Labour 
Inspectorate  improved  with  the  employment  of  five  additional  inspectors,  its  overall 
performance remains low.  

On  health  and  safety  at  work,  the  preparation  of  new  occupational  safety  and  health  law 
continued  and  the  preparation  of  the  2021-2025  Occupational  Safety  and  Health  (OSH) 
strategy  was  initiated.  The  main  problem  remains  the  inadequate  application  of  the  existing 
provisions contained in the current labour law, OSH law, as well as the special acts adopted 
by the Ministry of Labour and Social Policy. Inter-institutional coordination and co-operation 
remain  weak  and  the  administrative  capacities  are  still  insufficient  to  ensure  that  the  legal 
provisions are enforced. The knowledge of employers and employees of their respective rights 
and  obligations  remains  limited.  The  workload  of  State  Labour  Inspectorate  increased 
substantially due to  COVID-19-related inspections. There is  no official  data on accidents  at 
work. The Epidemics  and Public Health Emergency  Operations Centre in North  Macedonia 
was established. 

Limited progress was made on social dialogue. Social partners were actively involved in the 
drafting of the new labour law. At tripartite level, the Economic Social Council met regularly, 
mainly to discuss the packages of economic measures related to the COVID-19 pandemic. No 
improvements were noticed in the functioning of bipartite social dialogue and enforcement of 
collective  agreements  in  the  private  sector.  There  were  no  significant  collective  labour 
disputes. Workers’ confidence in trade unions' capacity to function independently continues to 
deteriorate. The implementation of the law on peaceful settlement of labour disputes remains 
weak.  Overall,  social  partners’  capacities  remain  weak.  Out  of  the  79  ratified  International 
Labour Organisation  Conventions, 77 are in  force, with  no new Conventions ratified during 
the  reporting  period.  Provisions  in  the  law  on  primary  education  and  the  law  on  secondary 
education,  allowing  for  the  replacement  of  striking  workers,  that  diverge  from  the 
International Labour Organisation Convention 87 on Freedom of Association and Protection 
of the Right to Organise, remain unchanged. 

On  employment  policy,  while  the  unemployment  rate  (15-74)  dropped  to  its  lowest  level 
since  the  country’s  independence  at  16.4%  in  2020,  the  inactivity  rate  (20-64)  increased  by 
1 pp to  29.5% and the  employment  rate (20-64)  remained  almost  unchanged at  59.1%, thus 
documenting  that  in  the  uncertain  economic  context  people  tended  to  withdraw  from  the 
labour force and become inactive rather than to seek a job. Between 2018 and 2019, a marked 
decrease  in  youth  unemployment  and  in  the  share  of  young  people  not  in  employment, 
education  or  training  (NEET)  was  recorded,  which  coincided  with  the  countrywide 
deployment  of  the  Youth  Guarantee  scheme.  In  2020,  youth  unemployment  (15-29)  rate  
slightly  decreased  by  0.9  pp  to  29.6%  in  2020,  while  the  share  of  young  people  not  in 
employment, education or training (NEET) aged 15-29 slighlty increased by 1.7 pp to 26.2% 
showing that more young people tended to become inactive. Both figures are still significantly 
above  the  EU  average  and  the  main  measure  to  address  this  continues  to  be  the  Youth 

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Guarantee Scheme. In 2020, more than 25,000 young people participated in the Programme, 
5,000  more  than  in  2019,  with  33%  successful  exits.  North  Macedonia  has  endorsed  the 
Western  Balkans  Declaration  on  ensuring  sustainable  labour  market  integration  of  young 
people  (8  July  2021)  and  committed  to  take  concrete  steps  to  gradually  enhance  its  Youth 
Guarantee scheme. The  revision of its Youth Guarantee  Implementation Plan is  planned for 
2022. Evaluation of effects of the scheme and tracking of longer-term performance after exit 
from  the  scheme  need  to  be  improved.  Employment  of  Roma,  long-term  and  low-skilled 
unemployed and persons with disabilities is supported by a Guaranteed Minimum Assistance 
Scheme.  In order to  tackle the effects  of the COVID-19 pandemic, the  government  adopted 
several  packages  of  temporary  socio-economic  measures.  The  implementation  of  the  2018-
2020 Employment Action Plan, which addresses inclusion of vulnerable groups in the labour 
market,  is  progressing.  The  2021-2025  National  Employment  Strategy  was  prepared. 
Implementation  of  measures  on  undeclared  work  under  the  2018-2022  strategy  for 
formalisation  of  the  informal  economy  continued.  The  occupational  outlook  model  was 
further developed with  additional 15 new occupational  descriptions,  bringing the total  up to 
60.  The  Employment  Service  Agency’s  capacity  and  its  cooperation  with  the  Centres  of 
Social  Work  should  be  strengthened.  The  number  of  Roma  benefiting  from  active 
employment  measures  is  241  from  to  total  6303.  The  criteria  for  participating  in  active 
employment  schemes  should  be  reviewed  to  ensure  increased  participation  of  vulnerable 
people, including Roma. 

Preparations  for  participation  in  the  European  Social  Fund  are  moderate.  There  was  no 
progress on enhancing capacities within state bodies with a view to preparing their readiness 
to  manage  the  Fund.  (See  Chapter  22  -  Regional  policy  and  coordination  of  structural 
instruments).  

Limited progress was made in the field of  social inclusion and protection. Implementation 
of  the  reforms  deriving  from  the  new  law  on  social  protection  are  ongoing,  including 
Guaranteed  Minimum  Assistance  for  those  whose  earnings  are  affected  by  COVID-19.  The 
total rate of people living in poverty was 21.6% and over 448 thousand people live under the 
threshold of relative poverty. The share of people living at risk of poverty or social exclusion 
was very high at 39.9%, showing a decreasing trend, but remaining at almost double the EU-
27 average. The Gini coefficient measuring income distribution inequality was  30.7. Further 
efforts  are  needed,  in  particular  by  allocating  adequate  human  resources,  for  the  full 
establishment of a monitoring and evaluation system for social services. The capacity of the 
social  work  centres  remains  weak.  There  is  no  proper  centralised  IT  system,  connecting 
central  and  local  level,  to  follow  social  assistance  schemes.  Little  has  been  done  for  de-
centralisation of social assistance.  

Implementation of the 2018-2027 national strategy on de-institutionalisation is ongoing. Re-
settlement of children and adults from institutional care to foster families or community-based 
housing  continued.  Implementing  legislation  needed  for  delivery  of  services  relevant  to 
persons with disabilities, such as home care, personal assistance, supported living and respite 
care  were  enacted.  The  methodology  for  licensing  and  determination  of  social  service  costs 
was adopted and 20 non-public social service providers were licensed by March 2021. 

On equality between women and men in employment and social policy, according to the 
2021  Global  Gender  Gap  report  the  equality  improved  as  North  Macedonia  scored  0.715 
(comparing to 0.635 score in 2020, 1.00 being parity). 2020 Global Gender Gap report, there 
was  a  12%  salary  gap  in  2019.  In  2020,  the  employment  rate  (20-64)  for  men  was  68.9%, 
compared to 49% for women, resulting in a high gender employment gap of 19.9 percentage 
points.  

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The law on protection against workplace harassment is in place and activities for ratification 
of the 2019 Violence and Harassment ILO Convention number 190, started. Data on incidents 
of sexual harassment in the workplace or a system to investigate such incidents does not exist. 
According to the Law on Health Insurance, women need to work for at least six months with 
the  same  employer  to  be  entitled  to  maternity  leave.  Measures  are  being  taken  to  increase 
childcare  and  pre-school  capacity,  which  should  help  women  return  to  the  workplace.  Both 
gender  stereotyping  and  the  gender  pay  gap  persist.  (See  also  Chapter  23  —  Judiciary  and 
Fundamental Rights).  

On  non-discrimination  in  employment  and  social  policy,  the  Law  on  Prevention  and 
Protection Against Discrimination was adopted on 30 October 2020 and the new Commission 
for  Protection  against  Discrimination  was  appointed.  The  new  Commission  took  over  90 
discrimination cases from the previous Commission and received 4 new complaints. (See also 
Chapter 23 — Judiciary and Fundamental Rights). 

Chapter 20: Enterprise and industrial policy  

EU enterprise and industrial policy strengthens competitiveness, facilitates structural change 
and  encourages  a  business-friendly  environment  that  stimulates  small  and  medium-sized 
enterprises (SMEs).  

North  Macedonia  is  moderately  prepared  in  this  area.  Some  progress  was  achieved  in 
increasing  financial  support  to  companies,  primarily  to  support  them  to  overcome  the 
damaging impact of the COVID-19 pandemic. The country developed a list of 370 parafiscal 
charges  as  a  first  step  to  their  rationalisation.  As  last  year’s  recommendations  were  not 
implemented, in the coming year the country should, in particular: 

  consolidate  the  institutional  structure  and  mandates  of  the  public  bodies  to  ensure 
effective  implementation,  monitoring  and  evaluation  of  the  strategies  and  policy 
measures;  

  continue  implementing,  assess  and  renew  the  strategy  and  action  plan  to  formalise  the 

informal economy, with specific attention to its business environment component; 

  develop  measures  to  increase  the  capacity  of  domestic  companies  to  integrate  in  global 

value chains. 

Enterprise and industrial policy principles are incorporated in several strategic documents 
under  the  competence  of  different  national  authorities.  The  Economic  Growth  Plan  (EGP) 
remains  the  most  important  horizontal  list  of  measures  with  the  largest  public  budget  and 
scope. The EGP is yet to include impact indicators and conduct systematic evaluation of past 
interventions. The other strategies in this area lack consistent evaluation mechanisms, regular 
impact assessment and timely redesign to reflect the actual needs of businesses. Public bodies 
with  overlapping  and  conflicting  mandates  render  the  institutional  set-up  complex  and 
resource  inefficient.  The  strategic  vision  for  attracting  foreign  investments,  for  support  of 
innovations and export is unclear, as the relevant strategies have expired  

Since the COVID-19 outbreak, the government introduced six packages of special measures 
to  support  businesses  and  citizens  to  cope  with  the  impact  of  the  health  pandemic  in  total 
amount  of  about  EUR  1.2  billion.  The  business  support  measures  adequately  assisted 
companies that suffered a decline in  revenues or were banned to operate. Most of the funds 
were  spent  to  subsidise  the  salaries  of  employees  and  one-off  cash  transfers  to  the  most 
affected industries. The Development Bank disseminated EUR 44 million zero interest loans 
to small and medium sized companies aiming at preserving liquidity and jobs. 

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Measures for formalisation of the informal economy continue to give results but need to be re-
enforced  to  establish  a  level  playing  field  between  firms.  The  frequent  changes  to  the 
regulatory framework affecting businesses still occur. Consultation with businesses should be 
further improved. Initial steps were taken to rationalise para-fiscal charges. However, uneven 
enforcement of business regulations and skills mismatches in the labour market still constitute 
obstacles to doing business. 

On policy instruments, provisions of the Late Payment Directive that relate to public bodies’ 
payment obligations needs to be fully aligned with the EU acquis. 

Overall,  public  funding  for  business  support  measures  further  increased  in  2020  in 
comparison to 2019, mainly as a consequence of the assistance provided during the COVID-
19  pandemic.  The  grants  awarded  as  post-investment  bonuses  under  the  EGP  have 
questionable impact  on individual  firm’s competitivness,  while potentially distorting market 
competition.  The  government  received  several  applications  based  on  the  Law  on  Strategic 
Investments. The law’s policy objective and discretionary power of the government to award 
public funds for high budget investments needs to be clarified. 

Some progress was noted in the area of access to finance. The county eneterd into agreement 
with  the    European  Investment  Bank  for  a  new  EUR  100  million  credit line  for  buisnesses. 
Overall, the bank lending remains the main source of private sector financing. Other financing 
instrument  such  as  factoring  and  leasing  remain  moderately  used.  In  total,  seven  projects  
were  financed  from  the  Enterprise  Development  &  Innovation  Facility  (EDIF)  and  eight 
projects    benefited  from  the  programme  for  the  competitiveness  of  SMEs  (COSME)  since 
these  instruments  were  set  up.  Efforts  are  needed  to  raise  the  private  sector’s  awareness  on 
how to  make better use  of the other EU financing instruments in  this area. The Ministry  of 
Economy started preparations for participation in the Single Market Programme.  

Chapter 25: Science and research  

The  EU  provides  significant  support  to  research  and  innovation.  All  Member  States  can 
benefit  from  the  EU’s  research  programmes,  especially  where  there  is  scientific  excellence 
and solid investment in research.  

North  Macedonia  has  a  good  level  of  preparation  in  relation  to  European  standards  on 
science and research. Limited progress was made in improving the research and innovation 
capacities  in  the  private  sector  and  in  continuing  with  the  development  of  the  Smart 
Specialisation Strategy (S3) in the reporting period.  

The recommendations from last year were not fully implemented and remain valid. Thus, in 
the coming year, the country should: 

  evaluate  the  impact  of  the  measures  implemented  under  the  2014-2020  strategy  for 

research and innovation; 

  ensure  a  higher  level  of  investment  in  research  and  innovation  and  intensify  efforts  to 
increase participation in Horizon Europe and other EU-financed instruments in the area;  

  complete  the  Smart  Specialisation  Strategy  and  ensure  synergy  with  other  national 

research and innovation policies.  

Limited  progress  was  made  to  align  with  European  standards  on  research  and innovation. 
The  Strategy  for  Research  and  Innovation  ended  on  31  December  2020.  While 
implementation was monitored on an annual basis, no assessment of the impact of the seven-
year strategy was undertaken. Investments in research and innovation remains low at 0.4% of 
GDP. An increased budget in this area would support the country’s economic recovery, also 

85 

 
 
given  the  relevance  of  innovation  to  the  Economic  and  Investment  Plan  for  the  Western 
Balkans. Measures for closer cooperation between academia and the private sector are being 
implemented  and  subsides  are  being  provided  to  companies  to  intensify  their  research  and 
innovation capacities. Participation by the private sector in overall research spending remains 
low at 0.1% of GDP. 

The  country’s  performance  in  the  Horizon  2020  framework  programme  has  improved 
compared  to  the  previous  year  but  it  still  remains  slightly  low  at  11.7%,  compared  to  an 
average  success  rate  of  12.1%.  Other  than  information  sharing,  no  systemic  activities  to 
promote Horizon 2020 or to support applicants were organised in 2020. The country will be 
associated to Horizon Europe. 

Regarding  the  European  Research  Area,  the  country’s  research  capacity  remains  low, 
compared  with  the  EU  average.  It  has  signed  26  agreements  for  cooperation  in  the  field  of 
education,  science  and  technological  development,  out  of  which  11  are  with  EU  Member 
States. However, funds and the scope of cooperation remain modest. The national roadmap on 
research infrastructure is under preparation. North Macedonia started preparing an application 
for construction of an International Institute for Sustainable Technologies. 

On  innovation,  the  country  remains  a  ‘modest  innovator’  in  the  2020  European  Innovation 
Scoreboard.  Since  its  establishment  in  2014,  the  Fund  for  Innovation  and  Technological 
Development  invested  above  EUR  43  million  public  funds  in  about  600  companies  to 
stimulate innovations and adoption of new technologies. 

The  preparation  for  the  Smart  Specialisation  Strategy,  supported  by  the  Joint  Research 
Centre, is underway, but delayed by the COVID-19 crisis. 

Chapter 26: Education and culture 

The EU supports cooperation in education and culture through funding programmes and the 
coordination of Member State policy through the open method of coordination. The EU and 
the Member States must also prevent discrimination and ensure quality education for children 
of migrant workers, including those from disadvantaged backgrounds.  

As regards education and culture, North Macedonia is moderately prepared. The COVID-19 
pandemic has affected the education system and progress of education reforms, as the efforts 
of  the  government  were  primarily  focused  on  creating  a  distance-learning  environment. 
Limited progress was made during the reporting period considering also COVID-19 situation 
which affected deeply the education system. The introduction of targets and indicators for the 
comprehensive  2018-2025  education  strategy  is  progressing  slowly,  as  well  as  the 
implementation of a proper monitoring system.  

The recommendations of the 2020 report were only partially addressed and remain valid. In 
the coming year, North Macedonia should in particular: 

  implement  the  strategic  framework  for  education  and  particularly  the  targets  for  pre-

school education and the Vocational Education and Training (VET) reform; 

  improve  support  for  teachers’  training  and  professional  development  and  ensure  that  an 

effective assessment process is in place; 

  improve  access  to  quality  education  for  all,  in  particular  children  with  disabilities  and 

children from Roma communities, and increase pre-school enrolment. 

In 2020, the national reforms in education and training and adult learning are characterised by 
further interventions for consolidation of the legislative framework. The new Law on Primary 

86 

 
 
Education began to be implemented from the 2019/2020 academic year, providing a basis for 
inclusive  and  quality  education  for  all.  Bylaws  and  concepts  arising  from  the  new  Law  on 
Primary  Education  are  currently  being  drafted.  The  Law  on  Secondary  Education  was 
harmonised  with  the  provisions  planned  for  inclusion  emanating  from  the  Law  on  Primary 
Education. Amendments on the Law for Vocational Education and Training were made with 
regards  the  establishment  of  the  three  Regional  VET  centres  for  vocational  education  and 
training.  The  new  Law  on  Secondary  Vocational  Education  was  prepared  in  2020  and  is 
currently open to public debate. The new Law for Adult Education was adopted in 2020 by 
the government  and is  currently  going through  a parliamentary procedure. Provisions in  the 
new  Law  on  Adult  Education  primarily  concern  the  validation  of  non-formal  and  informal 
learning,  the  introduction  of  work-based  learning,  improvements  to  the  process  of  verifying 
special programmes for adult education, and the role, goals, and tasks of the Centre for Adult 
Education.  Further  action  to  consolidate  the  legislative  framework  should  be  taken  with 
regard  to  development  of  Validation  of  non-formal  and  informal  learning  (VNFIL)  bylaws, 
setting up of fully operational system for VNFIL, decentralized system for Adult Education, 
harmonisation of the law on Nation Quality Forums.   

Public spending on education and training stood at 3.3% of GDP in 2020, down from 3.7% 
in  2019.  As  a  result  of  the  COVID-19  pandemic,  education  mostly  took  place  through 
distance  learning.  The  Ministry  of  Education  adopted  new  protocols  and  guidelines  to 
rationalise the curricula and support schools and teaching staff in implementing the combined 
teaching model. A new concept for the development of a distance learning system in primary 
and  secondary  education  was  adopted  in  July  2020,  and  a  national  platform  for  supporting 
distance learning was developed. 

Although  some  progress  was  made  on  pre-school  education,  the  overall  level  of  enrolment 
remains low, especially  in  the COVID-19 context.  Whereas the EU Education and Training 
target for 2020 on early childhood education and care attendance is set at 95%, only 45% of 
children from 3-6 years of age in North Macedonia were enrolled in licensed early childhood 
education  institutions  in  2020-2021,  a  slight  increase  compared  to  the  previous  year.  The 
rulebook on standards and norms for preschool education was amended in order to improve 
access and inclusion of children with special needs in public and private institutions.  

As  for  the  other  educational  levels,  90.8%  of  children  were  enrolled  in  primary  education 
(90,6%  male,  91%  females)  and  78.9%  in  secondary  education  (Females  79.8%  Males  7 
8.1%) in the 2020-2021 school year. The total amount is 71,811 students out of them 35,200 
females.  In  higher  education,  the  overall  enrolment  remains  low.  The  number  of  university 
students enrolled in the first year of studies has been declining in the last three years. In 2020, 
the government adopted the implementing legislation linked to the Law on Higher Education 
and established the Board for Accreditation and Evaluation of Higher Education. The results 
of  the  2019  Trends  in  International  Mathematics  and  Science  Study  (TIMSS)  presented  in 
December  2020  showed  a  poor  performance:  North  Macedonia  was  ranked  45th  in 
mathematical  literacy  and  51st  in  natural  sciences  out  of  58  participating  countries.  The 
country  continued  preparations  to  participate  in  the  2021  Progress  in  International  Reading 
Literacy  Study  (PIRLS)  and  the  2021  Programme  for  International  Student  Assessment 
(PISA), which was postponed to 2022. 

A concept for inclusive education was adopted in July 2020. All implementing legislation has 
been adopted in  accordance with  the new  Law on Primary  Education.  Inclusive teams  were 
formed in primary and secondary schools and individual educational plans were prepared for 
students with disabilities. Funds were provided for 323 educational assistants in schools. The 

87 

 
 
 
infrastructure  of  15  educational  facilities  (primary,  secondary  and  higher  education)  will  be 
rehabilitated  and  made  accessible  to  children  with  physical  disabilites.  A  number  of 
scholarships were awarded, including for children with disabilities, special educational needs 
and Roma pupils. The percentage of Roma students enrolled in higher education institutions 
has increased in the last three years from 42% to 48%. Roma educational mediators have been 
hired to support Roma pupils in primary education at the local level. 

The  Ministry  of  Education  adopted  a  new  concept  for  primary  education  in  March  2021, 
which  stresses  inclusiveness,  gender  sensitivity/equality  and  interculturalism  as  key 
principles.  In  October  2020,  implementing  legislation  to  the  new  Law  on  Teachers  and 
Professional  Associates  in  Primary  and  Secondary  Schools  were  adopted,  related  to 
monitoring the teaching process and accreditation of higher education institutions.  

A reformed four-year VET programme is being rolled out across all schools in the country. In 
2020, modular curricula based on learning outcomes for general education and on vocational 
subjects  in  technical  education  have  been  introduced.  The  establishment  of  three  regional 
VET centres is expected to improve the effectiveness of the vocational education reform.  

The country continues to actively participate in the Erasmus+ programme and the European 
Solidarity Corps and is, as a programme country, on an equal footing with EU Member States. 
In  2019  alone,  some  2,200  participants  benefited  from  Erasmus+  projects  receiving  support 
worth EUR 4.3 million. In the same year, 91 organisations benefited from EUR 2.4 million-
worth of projects under the strategic partnerships component of the Programme. The National 
Agency  for  European  Educational  Programs  and  Mobility  prepared  and  signed  the  work 
programme  for  the  new  programming  period  2020-  2027.  North  Macedonia  expressed 
willingness  to  re-associate  to  Erasmus+  as  an  associated  third  country  for  the  programme 
period 2021-2027. The formal association is expected to be completed during the second half 
of 2021. The revision of the legal framework on culture and protection of cultural heritage, as 
well  as  the  national  strategy  for  protection  of  cultural  heritage  was  further  delayed.  The 
implementation of the 2018-2022 national strategy for culture development needs to intensify 
and appropriate budget allocations need to be ensured. Cultural policies aimed at stimulating 
growth  of  cultural  and  creative  industries  need  to  be  supported  to  contribute  to  economic 
development and to increase tolerance among communities. 

The  authorities  should  strengthen  inter-institutional  cooperation  in  the  protection  of  cultural 
heritage  and  prevent  illegal  constructions  damaging  the  cultural  heritage  with  ‘particular 
importance status’, such as Ohrid and the Skopje Old Bazaar. The administrative capacity of 
the  Ministry  of  Culture  needs  to  be  further  strengthened.  Activities  to  implement  the  2005 
UNESCO  Convention  on  the  Protection  and  Promotion  of  the  Diversity  of  Cultural 
Expressions  were  further  postponed.  The  country’s  level  of  participation  in  the  Creative 
Europe Programme continues to be satisfactory. 

On youth, 23 grants (with average amount of EUR 12,753 per grant) and with involvement of 
144  participating  organisations  were  carried  out  in  2020.  The  topics  of  projects  have  been 
focusing  on  similar  areas  of  2019  (ICT  digital  competences,  EU  citizenship  and  EU 
democracy, Inclusion, Employability and entrepreneurship, Environment and climate changes 
and Youth participation). Starting from October 2020, in accordance with the Law on Primary 
Education, a so-called tandem physical education teacher is provided for the first and second 
grade of primary education. In October 2020, guidelines for realisation of teaching in sports 
and sports activities in primary schools during distance learning were adopted. For the 2020-
2021  academic  year,  the  Ministry  of  Finance  approved  264  employments  for  physical 
education. 

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 Chapter 29: Customs union  

All Member States are part of the EU customs union and follow the same customs rules and 
procedures.  This  requires  legislative  alignment  as  well  as  adequate  implementing  and 
enforcement capacity and access to the common computerised customs systems. 

North Macedonia has a good level of preparation in this area. Good progress was made in 
the reporting period with countinuous consolidation, application and upgrade of IT systems. 
The concept of authorised economic operators (AEO) was implemented and promoted. The 
electronic system to process customs declarations and excise documents is fully functional 
and  paperless.  Green  lanes  were  established  at  the  key  border  crossing  with  the  CEFTA 
countries, ensuring the uninterrupted flow of goods in the wake of the COVID-19 crisis. 

In the coming year, the country should, in particular:  

  continue  the  consolidation  and  full  application  of  its  IT  systems  including  alignment 
with  the  Commision's  Multi-Annual  Strategic  Plan  (MASP)  modules,  ensure  their 
continuous upgrade, and business continuity; 

  fully  implement  CEFTA  Protocol  5  on  Trade  Facilitation  by  furhter  expanding  AEO 

certificatin and fully implementing the Common Regional Market Action Plan. 

The customs legislation is highly aligned with the EU acquis. The 2020 customs tariff was 
adopted  to  correspond  with  the  latest  changes  in  the  EU  Combined  Nomenclature.  The 
Additional  Protocol  5  on  trade  facilitation  was  implemented,  including  the  concept  of 
authorised economic operators (AEO), which was intensively promoted. Eighteen companies 
were  AEO-certified.  The  country’s  validation  process  for  mutual  recognition  of  its  AEO 
certificates with the CEFTA countries was completed and is to be formally approved. North 
Macedonia is  yet  to  ratify  the Protocol  on Elimination  of  Illicit  Trade in  Tobacco Products, 
signed in 2014. 

On  administrative  and  operational  capacity,  the  standards  of  professional  integrity  and 
anti-corruption  continued  to  be  applied  by  the  Customs  Administration.  A  new  financial 
investigation  unit  was  established  and  training  of  staff  is  ongoing.  Risk  management  was 
systematically  applied  with  the  percentage  of  physical  controls  being  6%  and  documentary 
controls accounting for 17% of all shipments. One stop border control with Serbia, at the road 
border crossing point Tabanovce-Presevo, is applied and an agreement to establish one with 
Albania was signed in June 2021.  

The  electronic  system  for  processing  customs  declarations  and  excise  documents  is  fully 
functional  and  all  modules  are  paperless.  Systematic  electronic  exchange  of  data  (SEED)  is 
used  with  the  neighbouring  countries,  enabling  real-time  electronic  exchange  of  data.  New 
Computerised  Transit  System  (NCTS)  is  opertational  and  functioning  without  interuptions. 
Preparations  have  started  for  implementation  of  NCTS  Phase  5.  Maintenance  of  the  NCTS 
the  Integrated  Tariff  Environment  (ITE)  systems  was  ensured.  The  Customs 
and 
Administration  took  an  active  role  in  establishing  the  green  corridors,  ensuring  an 
uninterrupted  flow  of  essential  goods  at  three  key  border  crossings  with  the  neighbouring 
CEFTA countries in the wake of COVID-19 crisis. 

The Customs Administration participated in 13 international operations to combat illicit trade 
in drugs, counterfeit goods, medicines, medical devices and protective equipment, weapons, 
explosives, dangerous waste, cultural goods, raw tobacco and tobacco products. It participated 
in  two  international  projects,  one  focused  on  monitoring  of  trade  in  substances  used  for 
manufacture  of  improvised  explosive  devices  and  the  other  focused  on  waste  management. 

89 

 
 
Cooperation  and  exchange  of  intelligence  with  the  customs  agencies  from  the  wider  region 
and with international and regional organisations continued. 

CLUSTER 4: THE GREEN AGENDA AND SUSTAINABLE CONNECTIVITY  

The  cluster  on  Green  Agenda  and  sustainable  connectivity  covers:  transport  policy  (chapter 
14),  energy  (chapter  15);  trans-European  networks  (chapter  21);  environment  and  climate 
change  (chapter  27).  North  Macedonia  has  a  good  level  of  preparation  in  trans-European 
networks.  It  is  moderately  prepared  on  transport  policy  and  energy  and  as  some  level  of 
preparation on environment and climate change. North Macedonia is actively participating in 
meetings  of  the  Transport  Community  and  Energy  Community.  It  has  a  high  level  of 
compliance  with  the  Energy  Community  Treaty,  notably  on  electricity.  As  all  Western 
Balkans, North Macedonia endorsed the Green Agenda for the Western Balkans at the Sofia 
Summit in December 2020. This year, some progress was made in the energy sector, notably 
with  the  progress  made  towards  the  adoption  of  the  National  Energy  and  Climate  Plan. 
However,  limited  progress  were  made  in  transport,  environment  and  climate  change.  The 
country  needs  to  substantially  step-up  its  ambition  to  properly  implement  the  acquis  of 
chapters 14 and 27. These efforts will increase the efficiency of the Economic and Investment 
Plan  and  speed  up  the  implementation  of  the  Green  Agenda  for  the  Western  Balkans. 
Administrative capacities need to be strengthened in all sectors. In addition, strategies, action 
plans and legislation in these sectors need to be coherent with the principles and priorities of 
the Green Agenda and to ensure consistency between relevant sectoral documents.   

Chapter 14: Transport policy 

The EU has common rules for technical and safety standards, security, social standards, state 
aid  and  market  liberalisation  in  road  transport,  railways,  inland  waterways,  combined 
transport, aviation and maritime transport. 

The country is moderately prepared in the area of transport. Limited progress was made in 
the  reporting  period,  notably  on  connectivity.  Since  many  years,  the  transport  sector  has 
lacked administative and operational capacity and, especially, political commitment to deliver 
on  necessary  sectoral  reforms.  There  was  no  progress  in  completing  key  sector  reforms  and 
previous years’ recommendations remain valid.  

In the coming year, North Macedonia should, in particular: 

  strengthen  the  operational  and  administrative  capacity  of  the  inspection  bodies  and 

develop enforcement capacity to reduce fatalities on road and rail infrastructure; 

  implement  the  connectivity  reform  measures  on  rail  reform  and  open  the  rail  transport 
market, set up a national system to continuously collect data on road crashes, and finalise 
pending border-crossing agreements/protocols; 

  adopt legislation on Intelligent Transport Systems (ITS) and combined transport, and make 
further efforts to produce a strategic framework to implement ITS and the core networks. 

On general transport acquis, the key strategic documents for transport and its sub-sectors are 
already in  place.  There  was limited progress  in  developing an action plan to  accompany  the 
2018-2030  national  transport  Strategy.  The  operational  and  administrative  capacities  for  all 
modes  of  transport  remain  weak.  This  set  up  is  impeding  the  proper  implementation  of  the 
Green Agenda for the Western Balkans in the area of transport.  The Law on air and railway 
accident  investigation  is  not  fully  implemented,  the  independent  rail  accident  investigation 
body  has  not  been  set  up.  More  efforts  are  needed  to  implement  the  EU  passenger  rights 

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legislation  in  all  modes  of  transport  and  to  fully  transpose  the  Intelligent  Transport  System 
(ITS)  Directive  and  introduce  the  relevant  national  laws.  The  strategy  for  ITS  with 
accompanying resources is still missing.  

The  legal  framework  for  road  transport  is  broadly  aligned  with  the  EU  acquis.  However, 
legislation is  not  keeping pace with  changes in  the EU  acquis. The legislation  on dangerous 
goods is aligned with the EU acquis, but no progress was made on the conformity assessment 
of  the  existing  equipment  for  the  transport  of  dangerous  goods.  Progress  has  been  made 
towards establishing an executive body for road traffic safety. More efforts are needed to align 
with  the  social  and  safety  acquis.  The  national  system  for  continuous  road  crash  data 
collection is still not established and the action plans on road safety inspection and audit need 
to be followed up and implemented. The State Transport Inspectorate needs to strengthen its 
enforcement  and  technical  capacities.  Further  harmonisation  is  needed  on  penalties  for 
infringing the European Agreement on the work of crews of vehicles engaged in international 
road  transport  (AETR).  Signature  of  the  Interbus  protocol  on  regular  and  special  regular 
services is pending. The five-year road and rail maintenance plan has not been approved and 
road  maintenance  remains  weak.  Legislation  on  clean  energy  and  energy  efficient  road 
transport vehicles, and intelligent transport systems is not in line with the EU acquis. 

On rail transport, the  main requirement of the EU  acquis –  that the national  infrastructure 
management  should  be  independent  from  the  state-owned  railway  company  –  is  met.  The 
country’s railway sector still needs to be transformed and delays persist in deciding the future 
of  passenger  and  freight  operations.  Further  alignement  with  large  parts  of  the  single 
European  railway  area  acquis  has  been  delayed.  The  rail  market  on  the  Orient  East/Med 
corridor  has  not  been  opened.  Railway  safety  legislation  is  harmonised  but  not  properly 
implemented. The accident  and investigation  body has still not  been established. The cross-
border  railway  cooperation  agreement  with  Greece  has  not  been  signed  and  the  one  with 
Kosovo is not fully implemented. 

On  maritime  transport,  the  country  is  a  party  to  all  basic  transport  conventions  of  the 
International Maritime Organisation.  

In the area of inland waterway transport, the country is aligned with most of the EU acquis, 
except  for the Regulation on the recognition  of certification  and transportation of goods and 
passengers. There is no law on merchant shipping, as no goods are transported on the inland 
waterways. The  country  continues  to  participate  actively in  the  International  Commission  of 
Sava river basin, but not in the EU strategy for the development of the Danube Region. 

On aviation, North Macedonia has maintained a good level of alignment with the EU acquis 
and has partially aligned with the aviation safety legislation. EU support is helping the Civil 
Aviation Authority to comply with requirements of the European Common Aviation Authority 
Agreement. (EASA). More efforts are still needed to facilitate the European Aviation Safety 
Agency standardisation inspections. 

On combined transport, progress is still needed in setting up a multimodal node near Skopje 
and in adopting specific legislation aligned with EU rules.  

Chapter 15: Energy  

EU  energy  policy  covers  energy  supply,  infrastructure,  the  internal  energy  market, 
consumers,  renewable  energy,  energy  efficiency,  nuclear  energy  and  nuclear  safety,  and 
radiation protection.  

North  Macedonia  is  moderately  prepared  in  this  area.  Some  progress  was  made,  notably 
with  alignment  with  the  Third  Energy  package  and  steps  taken  for  the  adoption  of  the 

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National energy and climate plan and investments in renewable energy sources. However, not 
all  of  last  year’s  recommendations  were  fully  implemented.  In  the  coming  year  North 
Macedonia should, in particular: 

  finish unbundling (certification) the gas transmission systems; 

  increase  the  number  of  staff  and  the  technical/engineering  capacity  of  the  Energy 

Department in the Ministry of Economy and the Energy Agency; 

  adopt and implement energy efficiency legislation. 

The  country  has  taken  significant  steps  for  the  adoption  of  a  Five-Year  Program  for  the 
implementation  of  the  Energy  development  Strategy  and  an  integrated  National  Energy  and 
Climate Plan aiming towards decarbonisation which are positive steps for the implementation 
of the Green Agenda for the Western Balkans. 

Concerning security of supply, the availability of coal for the Bitola thermal power plant still 
needs to be urgently addressed. The  Law on compulsory oil reserves has been enacted after 
several years of delay. Implementing legislation and plans to release stocks in the case of an 
emergency were adopted. The oil stocks correspond to 51 days of average daily consumption, 
half  the  recommended  level.  This  could  become  a  vulnerability  in  case  of  interruption  of 
supplies 

The construction of a new 400kV electricity transmission interconnector line with Albania is 
under way. The Transmission System Operator (MEPSO) participates in the regional auction 
office in Southeast Europe. The implementation of a roadmap for coupling of with Bulgaria 
requires  the  prior  establishment  of  a  day-ahead  market.  On  gas  interconnections,  the 
government  is  taking  measures  to  ensure  the  necessary  funding  for  the  construction  of  an 
interconnection line with Greece, Serbia and Kosovo. 

On  the  internal  energy  market,  good  progress  was  made  in  aligning  the  country  with  the 
EU’s third energy package in gas and electricity. The electricity and gas markets are open for 
competition.  The  adoption  of  corresponding  secondary  legislation  is  well  advanced.  In 
September 2020, the government designated a subsidiary of MEPSO, the National Electricity 
Market  Operator  (MEMO),  to  act  as  the  nominated  operator  of  the  organised  electricity 
market. 

The electricity transmission and distribution network operators are unbundled in accordance 
with  the  EU  acquis.  MEPSO  procures  both  balancing  reserve  and  balancing  energy  in 
competitive procedure.  The dispute over the ownership of the  gas transmission pipeline has 
been  resolved.  However,  the  gas  transmission  system  operator  is  not  yet  unbundled  in  line 
with  the  Third  Energy  Package.  Legislation  is  not  yet  aligned  with  the  EU  Regulation  on 
wholesale energy market integrity and transparency. 

The  retail  electricity  market  is  liberalised.  Universal  supply  and  supply  of  last  resort  is 
performed by the supplier selected in a competitive procedure. Retail prices are deregulated, 
except for the universal supplier for which the regulator sets the price. 

Third-party access to the natural gas grid is in line with the EU acquis, but transparency needs 
to be improved. Works are ongoing to build the gas transmission pipeline between Negotino–
Bitola and Skopje-Tetovo-Gostivar. 

Wholesale  gas  prices  are  fully  deregulated,  however  the  market  remains  illiquid,  without  a 
virtual trading point. All contracts are concluded bilaterally, on a monthly and yearly basis. 

The  Energy  Regulatory  Commission  is  functional  but  its  independence  is  hampered  by 
political interference. 

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In  the  area  of  hydrocarbons,  the  Law  on  mineral  resources  aims  to  align  with  the  EU 
Hydrocarbon Licensing Directive. 

The amended national renewable energy action plan is in line with the revised binding target 
of 23% of energy coming from renewable energy sources by 2020 and 24% by 2025. In 2019, 
the  country  achieved  only  a  17.46%  share.  The  energy  Law  is  fully  aligned  with  the 
Renewables Energy Directive. 

Feed-in-tariffs  and  premiums  are  used  to  support  deployment  of  renewables.  In  2020, 
contracts  were  signed  for  installing  capacity  of  62MW  solar  power  plants,  using  premiums 
granted based on auctions. The government should reconsider the decision to keep the feed-
in-tariffs for small hydro power plants, which either do not require support or have  negative 
environmental  impact.  Investment  in  hydropower  should  be  compliant  with  the  relevant 
environmental EU acquis. 

The capacity cap per type of renewable energy technology has to  be removed to  enable the 
achievement of the 2025 renewable energy target. An electronic system for issuing, transfer 
and  cancellation  of  guarantees  of  origin  is  not  in  place  yet.  Provisions  on  sustainability  of 
biofuels  are  still  not  yet  aligned.  The  share  of  renewables  in  transport  remains  marginal, 
reaching  only  0.14%  in  2019.  Electricity  prosumers  are  enabled  with  the  rulebook  on 
renewables but its implementation is lacking due to number of administrative obstacles. 

The  fourth  action  plan  on  energy  efficiency  has  still  not  been  adopted.  A  Law  on  energy 
efficiency, transposes the energy efficiency and the energy performance Directives, however  
the implementation is lacking. The adoption of implementing legislation remains a challenge, 
due  to  limited  human  and  technical  capacity  at  the  Energy  Department  of  the  Ministry  of 
Economy and the Energy Agency. 

When  it  comes  to  efficiency,  financing  should  be  improved,  including  by  setting  up  the 
Energy  Efficiency  Fund.  Air  pollution  is  exacerbated  by  household  heating  and  remains  a 
serious problem. Municipalities should take steps to fully respect their obligation to develop 
and implement municipal energy efficiency programmes. 

For nuclear energy, nuclear safety and radiation protection, North Macedonia has ratified 
the relevant international conventions on nuclear safety and radiation protection and is a full 
member  of  the  European  Community  Urgent  Radiological  Information  Exchange  system 
(ECURIE).  The  government  adopted  a  National  policy  for  radioactive  waste  management. 
However, there is still no long-term and safe radioactive waste storage facility in the country. 

Chapter 21: Trans-European networks 

The EU promotes trans-European networks in the areas of transport, telecommunication and 
energy to strengthen the internal market and contribute to growth and employment. 

North  Macedonia  maintains  a  good  level  of  preparation  in  the  area  of  transport  networks. 
Limited  progress  was  achieved  during  the  reporting  period.  There  was  still  no  progress  in 
completing  sector  reforms  and  the  previous  years’  recommendations  remain  valid.  In  the 
coming year, the country should in particular: 

  further  strengthen  the  operational  and  technical  capacity  of  all  management  and 
stakeholder  institutions  dealing  with  the  development  of  both  Trans-European  Transport 
(TEN-T)  and  Trans-European  Energy  (TEN-E)  networks,  and  harmonise  the  legal 
framework with the Trans European Network Regulation; 

  mobilise sufficient resources to implement the Transport Community Treaty;  

   urgently improve the implementation of the Rail Corridor VIII works  

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On transport networks, the country actively participates in the Transport Community Treaty 
(TCT) and in its meetings. Steps are taken by North Macedonia to adopt the TCT action plans. 
The authorities are encouraged to continue the cooperation under this Treaty. Green corridors 
are functioning throughout the major corridors. 

Road Corridor X is functional but works along Corridor X-d are delayed. The construction of 
the rail Corridor VIII towards Bulgaria is facing significant delays, with only 28% completed 
of phase 1. Additional and urgent efforts are needed to accelerate progress in all phases of this 
rail corridor and other priority sections of the core network for both rail and road. The lack of 
an  adequate  staff  retention  policy  by  bodies  involved  in  large  investment  projects 
considerably  hampers  the  completion  of  strategic  projects.  The  remaining  railway  border 
crossing  protocol  with  Kosovo  was  signed  but  the  railway  border  crossing  agreement  with 
Greece  has  not  yet  been  finalised.  This  document  need  to  be  finalised  without  any  further 
delay.  Funding  to  build  an  adequate  infrastructure  close  to  the  Serbian  border,  at  the 
Tabanovce railway border station has been secured. No progress was made on adopting five-
year road and rail maintenance plans. 

On energy networks, the construction of a new 400kV electricity transmission interconnector 
line Bitola-Elbasan (Albania) is under way. On gas interconnections, the government is taking 
measures to ensure the necessary funding for the construction of an interconnection line with 
Greece, Serbia  and Kosovo. A preliminary study  on the  gas interconnectors with  Kosovo is 
ongoing. Works are ongoing to build the gas transmission pipeline between Negotino–Bitola 
and Skopje-Tetovo-Gostivar. 

Chapter 27: Environment and climate change  

The  EU  promotes  strong  climate  action,  sustainable  development  and  protection  of  the 
environment. EU law contains provisions addressing climate change, water and air quality, 
waste  management,  nature  protection,  industrial  pollution,  chemicals,  noise  and  civil 
protection. 

North Macedonia has some level of preparation in this area. Limited progress was achieved 
in nature protection and in climate change. However, implementation in all sectors remains a 
concerning issue. The country is encouraged to considerably step up ambitions regarding the 
green transition, notably in the context of the Green Agenda for the Western Balkans. Most of 
last year’s recommendations were not implemented. 

In the coming year, the country should in particular: 

  improve inter-sectoral coordination and increase financial resources for the reduction of 

air pollution at the local and national level; 

  make significant steps to establish a regional waste management system;  

  implement the Paris Agreement, including by adopting a comprehensive climate Strategy 

and a Law, consistent with the EU 2030 framework. 

Environment  

On  horizontal  issues,  administrative  capacity  at  all  levels  remains  weak,  with  insufficient 
financial  resources  to  implement  and  enforce  existing  legislation.  Implementation  of 
Environmental  Impact  Assessments  and  Strategic  Environmental  Assessments  Directives 
needs  to  be  improved,  notably  the  public  consultation  processes  and  on  the  quality  of  the 
reports. Dialogue with civil society and public consultation processes in this sector needs to 
be significantly improved. Lack of transparency and access to information is a recurring issue. 
The  Law  on  environmental  inspection  and  the  amendments  on  the  Law  on  environmental 

94 

 
 
impact  assessment  are  yet  to  be  adopted.  Limited  progress  was  made  on  the  INSPIRE 
Directive and in the area of environmental liability.  

On  air  quality,  financial  support  for  investments  in  reducing  the  use  of  fossil  fuels  was 
allocated,  reports  and  data  reports  are  submitted  to  the  European  Environment  Agency. 
However,  limited  implemention  and  ressources,  weak  inter-sectoral  cooperation  and 
coordination between central and local authorities limits the impact of measures to reduce air 
pollution. Air pollution in major cities remains a serious concern. A monitoring station in the 
municipality  of  Gevgelija  was  procured  and  replacement  of  measuring  instruments  on  the 
already  existing  monitoring  station  Bitola  was  finalised.  An  upgrade  of  the  air  quality  data 
management system was also implemented. 

Regarding waste management, weak administrative capacities, low enforcement and limited 
inter-sectoral  cooperation  remain  the  main  obstacles  for  progress  in  this  sector.  The  set  of 
laws  on  waste  management  and  special  waste  streams  incorporating  the  circular  economy 
principles  are  adopted.  The  National  Plan  for  waste  management  (2021-2031)  and  the  first 
National  waste  prevention  plan  (2021-2027)  were  prepared  and  await  adoption.  The 
establishement  of  the  regional  waste  management  system  continues  to  face  delays.  Non-
compliant  landfills  and  illegal  dumpings  continue  to  represent  an  important  environmental 
issue.  Separate  collection  of  waste  streams  and  economic  instruments  to  promote  recycling, 
reuse and waste prevention remain limited. The rehabilitation of the small pond in OHIS site 
has started. 

On water quality  management,  financial  agreements have been signed  to  secure funds for 
the  construction  of  the  wastewater  treatment  plant  of  Skopje,  and  works  on  wastewater 
collectors  are  ongoing.  The  surface  water  surveillance  monitoring  network  has  improved. 
However, a system for monitoring quality and quantity of surface and groundwater is needed. 
The management plan of the Ohrid Lake sub-basin has been prepared but implementation of 
all  river  basin  management  plans  remains  a  concern.  Progress  was  made  for  the 
implementation  of  the  EU  Floods  Directive.  River  Basin  Councils  was  nominated. 
Administrative  capacity  and  inter-institutional  coordination  needs  to  be  strengthened;  more 
efforts  are  required  to  reduce  non-revenue  water  and  to  implement  the  full  cost  recovey 
principle. 

Some progress was made on nature protection, the Law on nature protection, aligned with 
the  Birds  and  Habitat  directives  was  prepared  and  awaits  adoption.  Guidelines  were 
developed  for  monitoring  the  conservation  status  of  habitats  and  species.  Identification  of 
potential  NATURA  2000  sites  continued,  focusing  on  the  Bregalica  River  area,  with 
identification  of  Dolna  Bregalnica  as  a  Special  Protection  Area.  Shara  Mountain  was 
proclaimed  as  a  National  Park  and  procedures  for  proclamation  of  other  areas  is  ongoing. 
Activities  for  re-proclamation  of  Mavrovo  National  Park  need  to  be  accelerated.  The 
management  plan  for  National  Park  Pelister  has  been  adopted.  The  Ohrid  Lake,  including 
Studencisko Blato, has been designated as a Wetland of International Importance. Application 
for  inclusion  of  Lake  Ohrid  and  Studencisko  Blato  on  the  List  of  Ramsar  Convention  was 
submitted,  and  Dlaboka  Reka  (National  Park  Mavrovo)  was  listed  on  the  UNESCO 
Preliminary  List  for  old  beech  forests.  The  establishment  of  a  monitoring  system  for  the 
Balkan lynx in North Macedonia represents a first step towards its conservation. Sustainable 
financing  for  management  of  protected  areas  remains  an  important  challenge,  with  largely 
insufficient national allocation for nature protection, and relying mostly on donor assistance. 
The implementation of UNESCO recommendations for the Natural and Cultural Heritage of 
the Ohrid Region is severely delayed and requires serious attention by the authorities. 

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On industrial pollution and risk management, the Law on industrial emissions is still not 
adopted.  Insufficient  enforcement  of  polluter  accountability  prevents  the  setting  up  of  a 
system  to  prevent  industrial  and  chemical  accidents.  Efforts  are  needed  to  align  with  the 
Seveso III Directive, EU Ecolabel regulations and environmental management audit system. 

There  was  no  significant  improvement  in  the  areas  of  chemicals  and  noise  pollution  in  the 
reporting period. 

On civil protection, North Macedonia benefitted from the Union Civil Protection Mechanism 
(UCPM) in the context of the COVID-19 crisis and some further steps were taken to finalise 
the  technical  connection  to  the  Commission’s  common  Emergency  Communication  and 
Information  System  (CECIS).  North  Macedonia  received  EU  support  under  the  UCPM 
following the wildfires in summer 2021. 

The  COVID-19  crisis  and  the  recent  wildfires  highlighted  the  need  to  strengthen  the  legal 
framework  and  institutional  capacities  of  civil  protection  authorities,  notably  in  regard  to 
health  emergencies.  Cooperation  and  coordination  between  the  Protection  and  Rescue 
Directorate and the Crisis Management Centre needs to improve.  

Climate change 

The  alignment  of  the  legal  framework  with  the  EU  acquis  remains  low  and  the  human  and 
financial resources are very limited. While the law on Climate Action has yet to be adopted, a 
long-term strategy on Climate Action, with a dedicated action plan, was adopted. More efforts 
are  needed  to  implement  the  Paris  Agreement.  The  enhanced  Nationally  Determined 
Contribution  was  submitted  and  is  in  line  with  the  long  term  climate  change  strategy  and 
energy strategy. A platform for monitoring, reporting and verification is being prepared. 

CLUSTER 5: RESOURCES, AGRICULTURE AND COHESION  

Cluster  5  on  resources,  agriculture  and  cohesion  covers:  agriculture  and  rural  development 
(chapter 11); food safety, veterinary and phytosanitary policy (chapter 12); fisheries (chapter 
13);  regional  policy  and  coordination  of  structural  instruments  (chapter  22);  financial  and 
budgetary provisions (chapter 33). North Macedonia is moderately prepared in most areas of 
Cluster  5.  It  has  a  good  level  of  preparation  in  the  area  of  food  safety,  veterinary  and 
phytosanitary  policy  and  is  at  an  early  stage  of  preparation  in  financial  and  budgetary 
provisions. Over the reporting period, good progress was made in food safety, veterinary and 
phytosanitary  policy  and  some  progress  was  made  in  agriculture  and  rural  development. 
However, further efforts are needed, in particular in areas where limited or no progress was 
made such as fisheries, regional policy and the coordination of structural instruments as well 
as financial and budgetary provisions.  

Chapter 11: Agriculture and rural development  

The  common  agricultural  policy  (CAP)  supports  farmers  and  rural  development.  This 
requires  strong  management  and  control  systems.  There  are  also  common  EU  rules  for 
quality policy and organic farming. 

North  Macedonia  remains  moderately  prepared  in  the  area  of  agriculture  and  rural 
development. Some progress was made during the reporting period, notably by the adoption 
of the National strategy for agriculture and rural development and by aligning with EU rules 
on common market organisation. In the coming year, North Macedonia should in particular: 

  progress in decoupling direct payments and transfer the farm register and the land parcel 

identification system to the paying agency; 

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  adopt  a  legislative  framework  for  further  alignment  with  the  EU  acquis  in  the  area  of 

common market organisation; 

  employ qualified staff in the IPARD operating structure according to a workload analysis. 

On  horizontal  issues,  the  National  strategy  for  agriculture  and  rural  development  for  the 
period 2021-2027  was  adopted by the  government.  The functional  review of the  agriculture 
institutions  was  completed  in  2020  but  the  recommendations  on  institutional  reorganisation 
are  not  yet  implemented.  North  Macedonia  maintained  the  implementation  of  complex 
coupled  direct  payment,  while  the  available  annual  budget  decreased  by  30%.  Further 
alignment  with  EU  policies  is  required  for  the  decoupling  of  direct  payments  and 
implementation  of  cross-compliance  standards.  Decisions  to  simplify  the  administrative  and 
control system at the paying agency are not yet fully effective.  

The development of the integrated administrative and control system (IACS) has progressed 
slowly but currently all integrated administration and control system elements are in place and 
in  accordance  with  the  EU  acquis.  The  land  parcel  identification  system  (LPIS)  is  used  for 
calculating the area based payments. The legislative framework for transferring the farmers’ 
register and LPIS to the paying agency has been further delayed.The farm accountancy data 
network  (FADN)  was  automated  and  made  operational,  but  its  sample  size  needs  to  be 
expanded  to  be  fully  representative.  Human  and  financial  resources  remain  insufficient  to 
sustain  the  FADN  system  at  all  levels  of  data  collection,  quality  assurance  and  reporting. 
More  needs  to  be  done  to  align  farm  advisory  services  with  the  EU  acquis.  The  National 
Extension  Agency  remaines  understaffed  and  insufficiently  funded  to  support  farming 
development. 

Some  progress  was  made  in  aligning  with  EU  rules  on  the  common  market  organisation 
(CMO)  through  the  preparation  of  commodity-specific  regimes  for  wine  and  honey  and 
school  schemes  for  fruits  and  vegetables.  Some  efforts  were  made  to  further  align  both 
institutionally  and  legally,  with  the  preparation  of  a  separate  law  on  CMO  and  recognising 
producers’  organisations  for  agricultural  products,  associations  of  producers’  organisations 
and inter-branch organisations.  

On  rural  development,  good  progress  was  made  in  the  absorption  of  EU  funds  under  the 
Instrument  for  pre-accession  assistance  for  rural  development  (IPARD  II).  By  the  end  of 
2020,  payments  to  recipients  exceeded  EUR  4  million.  Yet,  it  is  essential  to  increase  the 
number  of  staff  in  the  implementing  agency.  Preparations  of  the  IPARD  III  programme  are 
advancing. The national rural development policy needs to be aligned with the EU acquis. 

On  quality  policy,  implementation  of  the  quality  schemes  was  slow  as  the  administrative 
capacities  remained  insufficient,  despite  the  sectors  potential  for  traditional  products  and 
designation of origin. Additional efforts are needed to establish the legislative framework for 
spirit drinks and to ensure protection of geographical indications in line with the EU acquis. 

As  regards  organic  farming,  the  legislation,  competent  authority,  control  bodies,  and  the 
accreditation  and  certification  system  are  established  and  operational.  The  monitoring  and 
control of organic certification and products need to be carried out more systematically. There 
is potential for further development of the sector and for the opportunities under the IPARD 
III programme to be fully used.  

Chapter 12: Food safety, veterinary and phytosanitary policy  

EU hygiene rules for food production ensure a high level of food safety. Animal health and 
welfare, and the safety of food of animal origin and animal nutrition are safeguarded together 

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with  the  quality  of  seeds,  plant  protection  material  and  the  protection  against  harmful 
organisms.  

North Macedonia has a  good level of preparation in the area of food safety and veterinary 
policy.  Good  progress  was  made,  particularly  on  improving  plant  health  control  in  the 
country. As not all previous recommendations were fulfiled, in the coming year, the country 
should in particular: 

  strengthen  the  capacities  for  data  collection,  verification  and  analysis  of  the  Food  and 

Veterinary Agency; 

  improve  the  functioning  and  reliability  of  the  Animal  Identification  and  Registration 

System; 

  implement actions to achieve a sustainable use of pesticides.  

On  general  food  safety,  the  Food  and  Veterinary  Agency  (FVA)  developed  a  new  Food 
Safety  Strategy  covering  the  period  2021-2025.  The  National  Rapid  Alert  System  for  Food 
and  Feed,  as  well  as  the  agency’s  internal  audit  and  training  systems,  are  operational.  The 
agency is performing its work according to the ISO 9001:2015 quality management standard 
and  is  undertaking  measures  to  protect  consumers  by  providing  accurate  information  about 
foods  and  preventing  food  fraud  associated  with  e-commerce.  There  is  a  good  level  of 
preparation concerning veterinary and food safety legislation. 

On  veterinary  policy,  the  implementing  legislation  on  the  control  system  of  the  internal 
market  and  on  imports  of  live  animals  and  animal  products,  on  certification,  the  computer 
system (TRACES or other system) and the Border Control Posts (BCPs), is aligned with the 
EU  acquis.  On  the  control  system  for  imports,  the  Agency  continues  to  provide  regular 
updates on the safeguard measures of imports and import requirements for live animals and 
animal products. 

Good progress was made on control measures for animal diseases. In accordane with the OIE 
Terrestrial animal health code, the country has been recognised as free from sheep and goat 
plague.  The  Agency  is  conducting  an  active  surveillance  programme  for  Classical  Swine 
Fever, African Swine Fever and Lumpy Skin Disease. There is a lack of human resources in 
the  FVA  for  data  collection,  verification  and  analysis,  the  development  of  veterinary  risk 
analysis and the design of corresponding surveillance systems. This is reflected in the limited 
implementation of the surveillance activities for diseases required under the EU animal health 
legislation.  There  was  no  improvement  in  the  functioning  and  reliability  of  the  animal 
identification  and  registration  system.  The  official  control  of  aquaculture  also  needs  to  be 
improved. The Agency continued implementing the monitoring programme on antimicrobial 
resistance. The 2021 national monitoring programme on the control of residues of veterinary 
medicinal  products,  and  contaminants  in  live  animals  and  food  stuffs  of  animal  origin  is  in 
line with the EU acquis on cattle, sheep, pigs, poultry, aquaculture, milk, eggs, wild game and 
honey. The Agency continued implementing the  action plan on  animal  welfare. There is  no 
improvement  in  the  capacity  to  further  align  with,  and  implement  the  EU  acquis  on  zoo-
technical issues. 

North  Macedonia  continued  rabies  eradication  vaccination  campaigns  with  EU  support. 
Taking  full  ownership  of  these  campaigns,  North  Macedonia  should  transition  to  using  its 
own means for future campaigns in line with obligations to harmonise with the relevant EU 
acquis. 

Good  progress  was  made  in  the  placing  of  food,  feed  and  animal  by-products  on  the 
market with the adoption of implementing legislation aligned with the EU acquis. However, 

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the revised Law on animal by-products is yet to be adopted. A rulebook on the specific safety 
requirements on novel foods was adopted. 

Good  progress  was  also  made  on  food  safety  rules.  The  legislation  was  aligned  during  the 
reporting  period  with  the  EU  acquis  on  food  information,  flavourings,  enzymes,  food 
additives, food for particular nutritional uses, food contact materials and the maximum levels 
for  certain  contaminants  in  foodstuffs.  The  Agency  continued  implementing  a  program  for 
monitoring food safety, but the data needs further analysis. 

Regarding specific rules for feed, the legislation is yet to be aligned with the EU acquis. The 
Agency continues to implement a programme for monitoring feed safety. 

Good progress was made on phytosanitary policy. The Phytosanitary Directorate is regularly 
updating the list of harmful organisms in line with the new EU acquis and the country’s pest 
status.  A  Catalogue  for  Selected  Plant  Pests  covering  Phytosanitary  Action,  Pest  Identity 
Cards  and  Survey  Protocols  for  quarantine  pests  has  been  developed.  The  phytosanitary 
information  system  was  installed  and  is  used  as  a  platform  for  information  sharing  and 
coordination  between  relevant  authorities.  The  phytosanitary  inspection  is  implementing 
measures to eradicate pests identified through the monitoring and control programmes. A new 
law on phyto-pharmacy, aligned with the EU acquis was adopted during the reporting period. 
Actions  to  achieve  a  sustainable  use  of  pesticides  are  not  implemented  and  there  is  neither 
reliable  data  on  the  pesticide  use  in  the  country  nor  an  analysis  on  the  risks  and  impact  of 
pesticide use on human health and the environment.  

The  Law on  genetically modified  organisms is  aligned  with  the EU  acquis. Some parts of 
the aligned legislation (production, placing on the market and import of genetically modified 
organisms food and feed) will be applied only upon accesssion. 

Chapter 13: Fisheries 

The  common  fisheries  policy  lays  down  rules  on  fisheries  management,  protects  living 
resources  of  the  sea  and  limits  the  environmental  impact  of  fisheries.  This  includes  setting 
catch  quotas,  managing  fleet  capacity,  rules  on  markets  and  aquaculture  and  support  for 
fisheries and coastal communities.  

The country is moderately prepared in this area fisheries. No progress was made over the 
reporting period. In the coming year, North Macedonia should in particular: 

  align  the  law  on  fisheries  and  acquaculture  with  the  EU  acquis  in  the  area  of  market 

policy, structural measures and state aid; 

  improve the data collection system and reporting 

  establish a multi-annual programming of structural measures. 

As North Macedonia only has inland fishing in lakes and aquaculture, a large part of the EU 
acquis on fisheries is not applicable. The national legal framework is not keeping pace with 
changes to the EU’s Common Fisheries Policy.  

Administrative capacities for resource and fleet management, and inspections and control 
of  fisheries  policy  remain  insufficient.  The  capacities  to  control  illegal,  unreported  and 
unregulated  (IUU)  fishing  in  line  with  the  EU  requirements  need  to  improve.  North 
Macedonia  has  yet  to  strengthen  its  policy  formulation,  implementation,  and  enforcement 
capacities.  

Overall  coordination,  including  with  the  environment  authorities,  regarding  biodiversity 
protection, needs to be improved. 

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Structural  measures  proved  to  be  insufficient  for  the  development  of  aquaculture  and 
restoration of fish funds. The data collection system for fisheries and aquaculture needs to be 
further developed in line with the EU acquis.  

Preparatory steps were taken for the alignment on market policy and State aid. Alignment of 
the EU Eel Regulation is not ensured. 

On  the  international  agreements  for  fisheries  management,  a  cooperation  agreement  with 
Albania was concluded at the end of 2020. Specifically to Prespa lake, the agreement needs to 
be in line with the International Agreement for the Protection and Sustainable Development of 
the Prespa Park Region involving all the countries sharing the Prespa Lakes Area. 

Chapter 22: Regional policy and coordination of structural instruments 

Regional  policy  is  the  EU’s  main  investment  policy  for  sustainable  and  inclusive  economic 
growth.  Member  States  bear  responsibility  for  implementation,  which  requires  adequate 
administrative capacity and sound financial management of project design and execution. 

North Macedonia is moderately prepared in the area of regional policy and coordination of 
structural  instruments.  Limited  progress  was  made  over  the  reporting  period,  particularly 
with  the  adoption  of  the  Law  on  balanced  regional  development.  Most  of  2020 
recommendations remain valid. In the coming year, the country should:  

  upgrade  the  administrative  and  technical  capacity  across  the  IPA  operating  structures, 
adopt a retention policy and put in place a permanent capacity-building mechanism for all 
structures  involved  in  the  management  of  the  EU  funds,  and  improve  the  dynamics  in 
implementation  of  the  EU-funded  projects,  including  planning,  management  and 
monitoring  of  the  infrastructure  investments  and,  particularly  for  the  ongoing  Economic 
and  Investment  Plan  projects,  such  as  railway  corridor  VIII  and  waste  water  treatment 
plant in Skopje, and ensure the sustainability of project results; 

  ensure the implementation of the legal and strategic framework for regional development, 
upgrade  the  local  and  regional  project  planning  and  implementation  capacity  and  put  in 
place an integrated system to monitor national investments at local level; 

  keep fiscal  decentralisation high on the agenda in  order to  build a long-term sustainable 
financial  framework  for  municipalities,  based  on  predictable  resources  and  collection  of 
local taxes. 

On  the  legislative  framework,  limited  progress  was  made  in  aligning  the  public  financial 
management and control framework with the EU acquis. The organic budget law introduces 
fiscal  rules,  multi-annual  expenditure  framework  and  programme-based  budgeting  and  the 
public  internal  financial  control  law  defines  strengthened  managerial  accountability  and 
internal audit functions, has not been adopted and is signficantly delayed.  

Regional  policy  improved  with  the  amended  Law  on  balanced  regional  development  was 
adopted in January 2021, committing 1% of the GDP to regional development, the Strategy 
for  balanced  regional  development  (2021-2031)  and  the  national  programme  upscaling  the 
state funds for regional development. The integrated system allowing planning, management 
and monitoring of the national investments in regional development is yet to be put in place. 
Progress is still needed on decisional, operational and fiscal decentralisation. 

The  institutional  framework  for  the  management  of  the  EU  funds  is  established  and 
functioning.  The  new  manuals  for  the  National  Authorising  Officer  and  the  Management 
Structure  improve  the  procedures  for  electronic  management  and  strengthen  control, 
verification and expenditure certification. The annual management declaration for 2020 for all 

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ongoing programmes certifies the reliability of the accounts, the use of the EU funds for the 
intended purposes, and the legality and regularity of the transactions. 

The  administrative  capacity  continues  to  deteriorate  and  no  progress  was  made  on  staff 
retention policy and on training and capacity building function. Following the 2021 workload 
analysis,  which  highlighted  the  need  to  urgently  fill  the  vacant  managerial  positions  and 
recruit additional 82 persons across the operating structures, the country developed and put in 
place an action plan, which is still to be implemented. 

On  programming,  North  Macedonia  has  further  strengthened  the  sector  policy-making  and 
strategic planning process, which was reflected in the preparation of the Strategic Response to 
the  IPA  III  programming  framework.  The  National  Investment  Committee  upgraded  the 
single  project  pipeline  with  digital  connectivity  and  sustainable  energy  projects.  However, 
delays  with  the  programming  of  the  funds  under  the  multi-annual  programme  for  transport 
and  environment  have  not  been  overcome  yet  and  the  risks  for  decommitment  of  EU  funds 
have increased. 

On  monitoring  and  evaluation,  the  participation  of  North  Macedonia  in  the  bilateral 
dialogue  with  the  EU  has  improved  with  the  involvement  of  the  line  ministers  in  the  IPA 
Monitoring  and  Sectoral  committees.  However,  the  track  record  in  addressing  the 
recommendations and strengthening the role of National IPA Coordinator on monitoring the 
implementation  of  the  conclusions  of  the  bilateral  dialogue  with  the  EU  needs  to  improve. 
The  monitoring  and  supervision  of  infrastructure  investments  needs  to  be  considerably 
improved.  

Financial  management  and  control  is  based  on  well-established  and  functioning  systems, 
which,  however,  continue  to  be  under  pressure  due  to  low  staffing  levels  and  vacant 
managerial  positions  across  all  IPA  structures.  As  a  result,  the  procurement,  evaluation, 
contracting, control, monitoring and implementation functions are at stress, which impacts on 
the quality of the aid management and produces delays in the implementation, particularly of 
the multi-annual programme on environment and transport (2014-2020). All flagship projects 
have been delayed, which is an issue of concern. 

The  internal  and  external  audit  functions  are  in  place  and  measures  are  ongoing  for 
strengthening  the  audit  skills,  capacities  and  methodology.  More  efforts  are  needed  to 
improve  the  coverage  and  quality  assurance  of  the  internal  audit.  The  Audit  Authority 
performs  to  a  good  standard,  following  sound  audit  methodology  and  achieving  good  audit 
coverage.  The  Strategic  Plan  (2021-2023)  adopted  in  January  2021  encompasses  adequate 
capacity development measures. The audit findings identified through the completed regular 
(systems,  operations  and  accounts)  and  follow-up  audits  still  need  to  be  addressed.  The 
institutional capacity for fighting fraud and protecting the financial interests of the EU needs 
to be significantly strengthened (see Chapter 32 — Financial control). 

Chapter 33: Financial and budgetary provisions 

This  chapter  covers  the  rules  governing  the  funding  of  the  EU  budget  (‘own  resources’). 
These  resources  mainly  consist  of:  (i)  contributions  based  on  the  gross  national  income  of 
each  Member  State;  (ii)  customs  duties;  (iii)  the  non-recycled  plastic  resource  and  (iv)  a 
resource based on value-added tax. Member States must have the appropriate administrative 
capacity to adequately coordinate and ensure the correct calculation, collection, payment and 
control of own resources.  

Preparations  in  this  area  are  at  an  early  stage.  Limited  progress  was  achieved  during  the 
reporting period. National accounts and gross national income-based (GNI) calculations were 
further  aligned  and  customs  declarations  and  excise  documents  are  fully  electronically 

101 

 
 
processed.  The  institutional  set-up  to  ensure  the  efficient  functioning  of  the  own  resources 
system has not yet been established. 

Since the recommendations from the 2020 report were not fully implemented, in the coming 
year, North Macedonia should: 
  further  harmonise  the  legal  basis  for  the  underlying  policy  areas  affecting  the  correct 

application of the own resources system; 

  enhance  the  administrative  capacities  and  co-ordination  mechanisms  among  key 

stakeholders in the system. 

Limited progress  was made on the specific  own  resources administrative  conditions,  as laid 
down in the own resources regulations. Progress was made to harmonise the legal framework 
in the underlying policy areas affecting the correct application of the own resources system, 
especially  on  customs,  taxation,  statistics  and  financial  control.  In  particular,  progress  was 
made  in  aligning  national  accounts  and  GNI  calculations  and  customs  legislation.  Customs 
declarations  and  excise  documents  are  now  fully  electronically  processed.  The  measures  to 
fight  and  reduce  tax  evasion,  fraud  and  informal  economy  as  well  as  to  improve  internal 
control in public sector are not yet efficiently applied by the relevant authorities. (For further 
information see developments under Chapter 16 - Taxation, Chapter 18 - Statistics, Chapter 
29 - Customs union and Chapter 32 - Financial control). 

Preparatory work on accounting and revenue allocation processes as per the EU provisions on 
A  and  B  accounts  is  ongoing.  Progress  was  made  on  building  up  the  operational  and 
administrative capacities of the customs administration for enforcement of national legislation 
and  procedures,  accounting  management  and  IT  services  as  a  basis  for  the  establishment  of 
the traditional own resources system. A detailed analysis of the current process of the customs 
administration for recording customs debt and customs duties in its IT system was elaborated. 

The Tax System Reform Strategy 2021-25 was adopted in December 2020 and a 2021 annual 
action plan was elaborated. Its implementation will be monitored quarterly by an established 
working group (see also under Chapter 16 – Taxation). 

With  regard  to  the  administrative  infrastructure,  some  progress  was  made  in  building  up 
capacities of relevant key institutions in this area. However, further efforts are needed in order 
to  ensure  timely  and  efficient  functioning  of  the  process  of  calculation,  collection,  payment 
and  control  of  own  resources  as  well  as  to  improve  the  reporting  and  co-ordination 
mechanisms among all bodies involved.  

CLUSTER 6: EXTERNAL RELATIONS  

Cluster  6  covers:  external  relations  (chapter  30)  and  foreign,  security  and  defence  policy 
(chapter 31). North Macedonia is moderately prepared in the areas covered by this cluster and 
has made some progress during the reporting period. In its common commercial policy, North 
Macedonia  continued  its  efforts  to  coordinate  its  positions  and  closely  align  its  commercial 
policies  with  those  of  the  EU,  including  within  the  WTO.  The  country  has  increased  its 
alignment with the EU common foreign and security policy to 96% and its participation in EU 
crisis management missions and operations. 

Chapter 30: External relations 

102 

 
 
 
 
 
The  EU  has  a  common  trade  and  commercial  policy  towards  third  countries,  based  on 
multilateral and bilateral agreements, and autonomous measures. There are also EU rules in 
the field of humanitarian aid and development policy.  

The  country  is  moderately  prepared  in  the  area  of  external  relations  and  made  some 
progress over the last year. North Macedonia continued its good cooperation with the EU, 
including within the World Trade Organisation (WTO). The Additional Protocol 5 on trade 
facilitation  was  implemented,  including  the  expansion  of  the  concept  of  authorised 
economic  operators  (AEO).  The  institutional  capacity  to  fully  participate  in  the  EU 
commercial, development and humanitarian policies is still insufficient. In the coming year, 
the country should in particular:  

  enhance its overall administrative capacity regarding trade policy, the Central European 

Free Trade Agreement (CEFTA) and work in the WTO framework; 

  implement  the  action  plan  for  the  development  of  a  Common  Regional  Market  2021-

2024; 

  implement  CEFTA  Protocol  6  on  trade  in  services,  and  negotiate  and  adopt  CEFTA 

Protocol 7 on dispute settlement. 

In the area of the common commercial policy, North Macedonia continued to coordinate its 
positions and align closely its policies with those of the EU, including within the WTO, and is 
supporting  the  EU’s  proposals  for  WTO  reforms.  The  provisions  of  the  Trade  Facilitation 
Agreement are fully applied and the National Committee on Trade Facilitation met twice in 
2020.  The  country  continued  the  negotiations  for  accession  to  the  WTO  Agreement  on 
Government  Procurement  by  participating  in  three  sessions  of  its  Committee  in  2020.  The 
administrative  capacity  of  the  Ministry  of  Economy,  in  charge  of  trade  policy,  should  be 
further strengthened.  

North Macedonia continued to participate actively in CEFTA and is chairing its activities in 
2021.  The  country  has  committed  to  implement  the  action  plan  for  the  development  of  a 
common regional market among the Western Balkan countries. The Additional Protocol 5 on 
trade facilitation was implemented, including the the expansion of the concept of authorised 
economic  operators  (AEO).  The  Protocol  6  on  trade  in  services  was  ratified  in  December 
2020. In the wake of the COVID-19 crisis, the country took an active role in establishing the 
green  corridors,  ensuring  an  uninterrupted  flow  of  essential  goods  at  the  three  key  border 
crossings with the neighbouring CEFTA countries. 

The system for export control of dual-use goods and technologies is functional. The country 
aligned  its  list  of  dual-use  goods  with  the  2020/1749  EU  Regulation  on  exports,  transfer, 
brokering, and transit of dual-use goods and technologies. Outreach is performed regularly to 
inform the industry about legislative changes. 

39 bilateral agreements with third countries (BITs) are force (the agreement with India was 
terminated),  of  which  19  are  with  EU  Member  States.  An  investment  protection  agreement 
was  signed  with  the  United  Arab  Emirates.  An  Agreement  on  partnership,  trade  and 
cooperation was signed with the United Kingdom of Great Britain and Northern Ireland. The 
country is working on updating the existing model agreement for BITs.  

There  was  no  progress  in  development  policy  and  humanitarian  aid.  The  country  is 
encouraged  to  establish  a  policy  framework  in  the  areas  of  development  and  international 
cooperation as well as humanitarian aid towards non-EU countries in line with the applicable 
EU policies and principles.  

Chapter 31: Foreign, security and defence policy 

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Member  States  must  be  able  to  conduct  political  dialogues  in  the  framework  of  foreign, 
security  and  defence  policy,  align  with  EU  statements,  take  part  in  EU  actions,  and  apply 
agreed sanctions and restrictive measures. 

The country  continues to  be  moderately  prepared in  the area of common foreign, security 
and defence policy. Some progress was made during the reporting period, with an increased 
alignment  with  the  EU  common  foreign  and  security  policy,  and  participation  in  EU  crisis 
management missions and operations. In the coming year, the country should in particular:  

  further improve alignment with the EU common foreign and security policy.  

Regular  political  dialogue  on  foreign  and  security  policy  issues  between  the  EU  and  the 
country  continued.  The  institutional  framework  enabling  the  country’s  participation  in  the 
common  foreign  and  security  policy  (CFSP)  and  the  common  security  and  defence  policy 
(CSDP) is in place. 

On  the  common  foreign  and  security  policy  (CFSP),  the  country’s  alignment  rate  with 
relevant High Representative statements on behalf of the EU and Council Decisions was 96% 
as of August 2021 (compared to 92% in 2019 and 94% in 2020). This shows a positive trend, 
reflecting  the  country’s  choice  of  strategic  orientation.  While  the  country  continues  not  to 
align on restrictive measures against Russia related to the situation in Ukraine, it did align in 
March  2021  with  those  related  to  serious  human  rights  violations  in  Russia  and  Alexei 
Navalny.   

North Macedonia maintains a bilateral immunity agreement with the United States, granting 
US citizens exemptions from the jurisdiction of the International Criminal Court. In doing 
so, the country does not comply with the EU common positions on the integrity of the Rome 
Statute or with the related EU guiding principles on bilateral immunity agreements.  

On  non-proliferation,  North  Macedonia  participates  in  the  Proliferation  Security  Initiative 
and the Hague Code of Conduct but not in the Nuclear Suppliers Group, the Australia Group, 
the Zangger Committee or the Missile Technology Control Regime. The country is committed 
to  meet  the  requirements  to  join  the  Wassenaar  Arrangement.  The  country  is  an  active 
member of the Center for Security Cooperation (RACVIAC) and is chairing its Multinational 
Advisory Group until October 2021. 

North  Macedonia  continued  the  implementation  of  the  2018  Regional  Roadmap  for  a 
sustainable solution to the illegal possession, misuse and trafficking of small arms and light 
weapons, and their ammunition in the Western Balkans.  

North  Macedonia  continued  to  actively  cooperate  with  international  organisations.  The 
country secured its 2023 Chairmanship of the OSCE. In November 2020, the country became 
the  thirteenth  member  of  the  Black  Sea  Economic  Cooperation  Council  (BSEC)  and  co-
chaired, with Bulgaria, the Berlin Process Foreign Ministers Meeting.  

In terms of security measures, the law on Classified Information, based on the 2013 Council 
Decision,  is  in  force.  By-laws  regulating  the  inspection  supervision  of  work  with  classified 
information as well as on personal security were adopted. An agreement on the exchange and 
mutual protection of classified information was signed with Greece in February 2021.  

The country continued to actively participate in EU crisis management operations under the 
common  security  and  defence  policy  (CSDP),  notably  EUFOR  ALTHEA  in  Bosnia  and 
Herzegovina.  Since  December  2020,  North  Macedonia  participates  in  the  military  training 
mission  in  the  Central  African  Republic  (EUTM  RCA).  In  2021,  military  personnel 
participated  in  a  military  exercise  in  Germany  and  in  Greece.  As  a  new  NATO  ally,  North 
Macedonia maintained a presence in a number of NATO–led missions including ‘KFOR’ in 

104 

 
 
Kosovo.  North  Macedonia  withdrew  its  contingent  from  the  ‘Resolute  Support’  mission  in 
Afghanistan together with other contributing states. The country continues to participate in the 
UNIFIL operation in Lebanon. 

North Macedonia ratified the technical arrangement between the Ministry of Defence and the 
Greek  Ministry  of  National  Defence  on  the  protection  of  its  air  space  Fight  Information 
Region SKOPJE (LWSS). 

On hybrid threats, North Macedonia engaged with three other Western Balkans partners in 
the  EU’s  hybrid  risk  survey.  The  objective  was  to  identify  systemic  vulnerabilities  and 
provide  EU  assistance  in  those  areas  where  gaps  discovered.  The  National  Strategy  on 
building  resilience  and  confronting  hybrid  threats  (2021-2025)  was  finalised  and  aims  at 
addressing the recommendations from the 2020 Hybrid Risk Survey. 

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ANNEX I – RELATIONS BETWEEN THE EU AND NORTH MACEDONIA 

North Macedonia has been participating in the Stabilisation and Association process since 
1999. The Stabilisation and Association Agreement (SAA) with the EU, signed in 2001, sets 
the  framework  for  relations  with  the  EU,  including  political,  economic  and  technical 
dialogues.  Experts  met  in  seven  Sub-committees  and  one  Special  Group,  according  to 
schedule. The Stabilisation and Association Committee took place in June 2021. Discussions 
focused on the decision  to  open accession negotiations and the progress  made in  advancing 
EU  reforms,  in  particular  in  the  areas  of  the  fundamentals  and  the  strengthening  of  good 
neighbourly relations. 

North  Macedonia  is  a  candidate  country  since  2005,  with  consecutive  recommendations  by 
the European Commission to open accession negotiations since 2009. On 26 March 2020, the 
European Council endorsed the Council’s decision to open accession negotiations with North 
Macedonia. 

Visa liberalisation for citizens of North Macedonia travelling to the Schengen area has been 
in  force since December 2009. A readmission agreement has been in  force since 2008. The 
Commission’s  August  2020  fourth  report  under  the  visa  suspension  mechanism  concluded 
that North Macedonia continues to meet the visa liberalisation benchmarks. 

North Macedonia continued to increase its alignment with EU common foreign and security 
policy  positions  and  declarations.  North  Macedonia  continued  to  actively  participate  in  EU 
crisis management missions and operations under the common security and defence policy. 

The  bilateral  EU  support  for  North  Macedonia  under  the  Instrument  for  Pre-accession 
Assistance  II  (IPA  II)  in  2014-2020  amounts  to  EUR  633  million,  or  104%  of  the  funds 
allocated  by  the  revised  Country  Strategy  Paper.  Its  implementation  has  progressed  on  the 
grounds  of  the  sector  approach  and  inclusive  programming.  In  response  to  the  COVID-19 
pandemic,  EUR  4  million  have  been  refocused  for  urgent  medical  equipment  and  EUR  62 
million for socio-economic recovery measures. In particular, the EUR 50 million performance 
reward in 2020 was re-directed towards responding to the health needs, and to mitigating the 
economic  and  social  effects  of  the  crisis  and  to  support  the  country  in  its  EU  integration 
efforts. As part of the wider COVID-19 response, the EU has also made available a Macro-
Financial  Assistance  scheme  of  EUR  160  million,  which  has  been  fully  disbursed.  The 
Commission set aside EUR 70 million in grants from IPA II for the Western Balkan partners 
to reimburse the Member States for the resale of doses they obtained under the EU Advance 
Purchase  Agreements  with  COVID-19  vaccine  producers,  of  which  North  Macedonia 
received EUR 8.2 million. The first vaccines provided under this grant were a total of 651,000 
Pfizer  doses  for  the  region  (including  almost  120,000  for  North  Macedonia)  facilitated  by 
Austria,  which  were  delivered  between  May  and  August  2021.  Further  donations  by  EU 
Members  States  brought  the  total  provided  by  Team  Europe  to  almost  350  000  by  early 
October. 

IPA  II has  continued to  help  the  country to  deliver on key reforms, including in  the area in 
rule of law, public finance management, economic governance and public administration. The 
civil  society  and  private  sector  benefits  of  important  EU  support  providing  opportunities  to 
grow and develop in a  favourable environment.  North Macedonia also benefits of dedicated 
EU  support  for  protecting  the  environment  and  boosting  the  connectivity  with  the  EU 
transport systems.  

106 

 
 
 
 
 
 
 
North Macedonia continues to benefit from support under the IPA multi-country and regional 
programmes, as well as participates in five cross-border cooperation programmes and in one 
transnational cooperation programme. The EU also supports the participation of the country in 
12 EU programmes with EUR 40.3 million.  
The IPA III Regulation for the 2021-2027 financial period13 will continue to provide financial 
support  to  the  region  and  will  also  finance  the  Economic  Investment  Plan  (EIP)  for  the 
Western Balkans.  The EIP, accompanied by the Green Agenda for the Western Balkans, was 
agreed by the Commission and the countries of the region in October 2020 and aims to spur 
the  long-term  economic  recovery  of  the  region,  support  a  green  and  digital  transition,  and 
foster regional integration and convergence with the European Union. 

13 OJ L 330, 20.9.2021  

107 

 
 
 
 
 
                                                           
STATISTICAL DATA (as of 09.09.2021) 
North Macedonia 

Basic data 

Population (thousand) 
Total area of the country (km²) 

National accounts 
Gross domestic product (GDP) (million national currency) 
Gross domestic product (GDP) (million euro) 
GDP (euro per capita) 
GDP per capita (in purchasing power standards (PPS)) 
GDP per capita (in PPS), relative to the EU average (EU-27 = 100) 
Real GDP growth rate: change on previous year of GDP volume (%) 
Employment growth (national accounts data), relative to the previous year (%) 
Labour productivity growth: growth in GDP (in volume) per person employed, relative to the 
previous year (%) 
Unit labour cost growth, relative to the previous year (%) 
**3 year change (T/T-3) in the nominal unit labour cost growth index (2015 = 100) 
Labour productivity per person employed: GDP (in PPS) per person employed relative to EU 
average (EU-27 = 100) 
Gross value added by main sectors 
Agriculture, forestry and fisheries (%) 
Industry (%) 
Construction (%) 
Services (%) 
Final consumption expenditure, as a share of GDP (%) 
Gross fixed capital formation, as a share of GDP (%) 
Changes in inventories, as a share of GDP (%) 
Exports of goods and services, relative to GDP (%) 
Imports of goods and services, relative to GDP (%) 
Gross fixed capital formation by the general government sector, as a percentage of GDP (%) 

Business 
Industrial production volume index (2015 = 100) 
Number of active enterprises (number) 

2008 
2 045 s 
25 436 w 

2008 
414 890 
6 772 
3 310 e 
8 320 e 
32.3 
5.5 
8 
-  2 

11 
13.9 
45 

13.3 
16.1 
6.6 
64.1 s 
97.2 
25.8 
2.1 
43.2 
68.3 
: 

2008 
97.5 
: 

Note 

1) 

Note 

Note 

108 

2015 
2 069 es 
25 436 w 

2015 
558 954 
9 072 
4 380 e 
10 440 e 
36.3 
3.9 
2 
2 

0 
2.2 
43 

11.1 
19.3 
8.1 
61.6 s 
85.8 
23.8 
6.5 
48.7 
65.0 
: 

2016 
2 071 es 
25 436 w 

2016 
594 795 
9 657 
4 660 e 
10 820 e 
37.3 
2.8 
2 
1 

5 
9.1 
44 

10.6 
19.7 
8.0 
61.8 s 
82.3 
24.4 
8.1 
50.7 
65.5 
: 

2017 
2 074 es 
25 436 w 

2017 
618 106 
10 038 
4 840 e 
10 990 e 
36.8 
1.1 
3 
-  2 

5 
10.8 
43 

9.1 
20.5 
7.5 
62.9 s 
81.6 
22.5 
9.7 
55.1 
69.0 
: 

2018 
2 075 es 
25 436 w 

2018 
660 878 
10 744 
5 170 e 
11 560 e 
37.5 
2.9 
0 
3 

3 p 
13.4 p 
44 

9.8 
21.5 
6.2 
62.6 s 
80.1 
20.0 
12.2 
60.4 
72.8 
: 

2019 
2 077 s 
25 436 w 

2019 
689 425 p 
11 209 p 
: 
: 
: 
3.2 p 
: 
: 

: 
: 
: 

9.3 p 
20.7 p 
6.4 p 
63.6 ps 
79.7 p 
21.2 p 
13.3 p 
62.3 p 
76.5 p 
: 

2015 
100.0 
54 738 w 

2016 
103.4 
55 469 w 

2017 
103.6 
55 359 w 

2018 
109.2 
58 231 w 

2019 
113.2 
58 318 pw 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Birth rate: number of enterprise births in the reference period (t) divided by the number of 
enterprises active in t (%) 
Death rate: number of enterprise deaths in the reference period (t) divided by the number of 
enterprises active in t (%) 
People employed in SMEs as a share of all persons employed (within the non-financial 
business economy) (%) 
Value added by SMEs (in the non-financial business economy) (EUR million) 
Total value added (in the non-financial business economy) (EUR million) 

Inflation rate and house prices 
Consumer price index (CPI), change relative to the previous year (%) 
**Annual change in the deflated house price index (2015 = 100) 

Balance of payments 
Balance of payments: current account total (million euro) 
Balance of payments current account: trade balance (million euro) 
Balance of payments current account: net services (million euro) 
Balance of payments current account: net balance for primary income (million euro) 
Balance of payments current account: net balance for secondary income (million euro) 
Net balance for primary and secondary income: of which government transfers (million euro) 
**3 year backward moving average of the current account balance relative to GDP (%) 
**Five year change in share of world exports of goods and services (%) 
Net balance (inward - outward) of foreign direct investment (FDI) (million euro) 
Foreign direct investment (FDI) abroad (million euro) 
of which FDI of the reporting economy in the EU-27 countries (million euro) 
Foreign direct investment (FDI) in the reporting economy (million euro) 
of which FDI of the EU-27 countries in the reporting economy (million euro) 
**Net international investment position, relative to GDP (%) 
Year on year rate of change in gross inflow of remittances (in national currency) from migrant 
workers (%) 

Public finance 
General government deficit / surplus, relative to GDP (%) 
General government gross debt relative to GDP (%) 
Total  government revenues, as a percentage of GDP (%) 
Total government expenditure, as a percentage of GDP (%) 

: 

: 

: 

: 
: 

2008 
7.6 d 
: 

2008 
-  862.2 w 
- 1 933.6 w 
188.0 w 
-  94.4 w 
977.8 w 
: 
: 
: 
409.4 w 
-  9.5 w 
: 
399.9 w 
244.0 w 
-  48.2 w 
3.9 sw 

2008 
-  0.9 w 
20.5 w 
32.9 w 
33.8 w 

10.2 

8.8 

10.3 

9.3 

9.2 

7.7 

8.8 

7.0 

74.4 sw 

75.4 sw 

74.3 sw 

74.2 psw 

: 

: 

: 

2 413 ps 
3 740 p 

2 607 ps 
4 031 p 

2 698 sw 
4 252 

2 895 sw 
4 579 

3 183 psw 
4 836 pw 

2015 
0.1 d 
: 

2015 
-  177.1 
- 1 822.8 
348.8 
-  286.1 
1 583.0 
54.3 
-  1.5 
: 
202.8 w 
18.2 
5.4 w 
216.7 w 
22.4 w 
-  56.0 w 
2.3 sw 

2015 
-  3.5 w 
38.1 w 
28.8 w 
32.3 w 

2016 
0.2 d 
: 

2016 
-  275.5 
- 1 812.9 
340.7 
-  383.9 
1 580.6 
90.8 
-  1.9 
22.3 
316.9 w 
21.7 
13.6 w 
338.4 w 
162.5 w 
-  57.7 w 
-  7.5 sw 

2016 
-  2.7 w 
39.9 w 
28.5 w 
31.2 w 

2017 
2.1 d 
: 

2017 
-  102.9 
- 1 787.9 
377.0 
-  397.5 
1 705.6 
112.8 
-  2.0 
42.1 
180.0 w 
1.8 
7.2 w 
181.7 w 
86.0 w 
-  58.0 w 
0.4 sw 

2017 
-  2.7 w 
39.4 w 
29.1 w 
31.8 w 

2018 
2.3 d 
: 

2018 
-  7.1 
- 1 736.2 
370.9 
-  450.7 
1 808.9 
109.1 
-  1.3 
51.7 
603.7 w 
10.4 
0.4 
614.1 w 
290.4 w 
-  56.2 w 
3.2 sw 

2018 
-  1.8 w 
40.4 w 
28.6 w 
30.4 w 

2019 
0.7 d 
: 

2019 
-  372.3 
- 1 969.6 
349.8 
-  519.6 
1 767.1 
38.0 
-  1.5 
39.7 
363.3 w 
35.5 
27.2 
398.8 w 
220.2 
-  57.6 pw 
: 

2019 
-  2.0 w 
40.7 w 
29.2 w 
31.2 w 

Note 

Note 

Note 

Financial indicators 

Note 

2008 

2015 

2016 

2017 

2018 

2019 

109 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross external debt of the whole economy, relative to GDP (%) 
Gross external debt of the whole economy, relative to total exports (%) 
Money supply: M1 (banknotes, coins, overnight deposits, million euro) 
Money supply: M2 (M1 plus deposits with maturity up to two years, million euro) 
Money supply: M3 (M2 plus marketable instruments, million euro) 
Total credit by monetary financial institutions to residents (consolidated) (million euro) 
**Annual change in financial sector liabilities (%) 
**Private credit flow, consolidated, relative to GDP (%) 
**Private debt, consolidated, relative to GDP (%) 
Interest rates: day-to-day money rate, per annum (%) 
Lending interest rate (one year), per annum (%) 
Deposit interest rate (one year), per annum (%) 
Euro exchange rates: average of period (1 euro = … national currency) 
Trade-weighted effective exchange rate index, 42 countries (2010 = 100) 
**3 year change (T/T-3) in the trade-weighted effective exchange rate index, 42 countries 
(2010 = 100) 
Value of reserve assets (including gold) (million euro) 

: 
114.8 w 
927.2 w 
2 958.8 w 
3 229.8 w 
2 803.2 w 
: 
: 
: 
4.12 w 
8.50 w 
: 
61.265 
: 
: 

69.3 s 
142.2 w 
1 694.2 w 
4 130.8 w 
4 936.7 w 
4 625.9 w 
5.5 w 
: 
: 
0.99 w 
3.75 w 
0.25 w 
61.611 
: 
: 

74.7 s 
146.7 w 
1 867.8 w 
4 395.9 w 
5 240.6 w 
4 632.0 w 
6.9 w 
: 
: 
1.02 w 
4.25 w 
0.25 w 
61.596 
: 
: 

73.4 s 
133.8 w 
2 053.3 w 
4 564.2 w 
5 480.3 w 
4 883.0 w 
1.9 w 
: 
: 
1.01 w 
3.75 w 
0.25 w 
61.575 
: 
: 

73.0 s 
121.4 w 
2 436.7 w 
5 103.4 w 
6 072.6 w 
5 237.6 w 
7.6 w 
: 
: 
0.99 w 
3.00 w 
0.15 w 
61.512 
: 
: 

72.7 ps 
117.2 w 
2 857.4 w 
5 609.3 w 
6 571.1 w 
5 552.3 w 
12.2 w 
: 
: 
1.00 w 
2.75 w 
0.15 w 
61.506 
: 
: 

2) 
3) 
3) 

3) 

1 494.9 w 

2 261.8 w 

2 613.4 w 

2 336.3 w 

2 867.1 w 

3 262.6 w 

External trade in goods 
Value of imports: all goods, all partners (million euro) 
Value of exports: all goods, all partners (million euro) 
Trade balance: all goods, all partners (million euro) 
Terms of trade (export price index / import price index * 100) (number) 
Share of exports to EU-27 countries in value of total exports (%) 
Share of imports from EU-27 countries in value of total imports (%) 

Demography 
Crude rate of natural change of population (natural growth rate): number of births minus 
deaths (per thousand inhabitants) 
Infant mortality rate deaths of children under one year of age (per thousand live births) 
Life expectancy at birth: male (years) 
Life expectancy at birth: female (years) 

Labour market 
Economic activity rate for persons aged 20–64: proportion of the population aged 20–64 that 
is economically active (%) 
*Employment rate for persons aged 20–64: proportion of the population aged 20–64 that are 
in employment (%) 

Note 

4) 

Note 

Note 

110 

2008 
4 664 
2 698 
- 1 967 
100.8 sw 
63.6 s 
49.2 s 

2015 
5 801 
4 088 
- 1 714 
100.0 sw 
76.0 s 
52.4 s 

2008 
1.9 

9.7 
72.4 
76.5 

2008 
69.4 

46.3 

2015 
1.3 

8.6 
73.5 
77.4 

2015 
70.2 

51.9 

2016 
6 177 
4 390 
- 1 786 
96.6 sw 
78.8 s 
51.3 s 

2016 
1.2 

11.9 
73.4 
77.5 

2016 
69.6 

53.3 

2017 
6 825 
5 007 
- 1 818 
95.3 sw 
79.7 s 
52.8 s 

2017 
0.7 

9.2 
74.1 
77.9 

2017 
70.3 

54.8 

2018 
7 676 
5 873 
- 1 804 
94.9 sw 
80.3 s 
52.9 s 

2018 
0.8 

5.7 
74.6 
78.8 

2018 
70.4 

56.1 

2019 
8 463 
6 424 
- 2 040 
: 
78.5 s 
50.8 s 

2019 
-  0.3 

5.6 
74.7 
78.6 

2019 
71.5 

59.2 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Male employment rate for persons aged 20–64 (%) 
Female employment rate for persons aged 20–64 (%) 
Employment rate for persons aged 55–64: proportion of the population aged 55–64 that are 
in employment (%) 
Employment by main sectors 
Agriculture, forestry and fisheries (%) 
Industry (%) 
Construction (%) 
Services (%) 
People employed in the public sector as a share of total employment, persons aged 20–64 
(%) 
People employed in the private sector as a share of total employment, persons aged 20–64 
(%) 
Unemployment rate: proportion of the labour force that is unemployed (%) 
Male unemployment rate (%) 
Female unemployment rate (%) 
Youth unemployment rate: proportion of the labour force aged 15–24 that is unemployed (%) 
Long-term unemployment rate: proportion of the labour force that has been unemployed for 
12 months or more (%) 
Unemployment rate for persons (aged 25–64) having completed at most lower secondary 
education (ISCED levels 0-2) (%) 
Unemployment rate for persons (aged 25–64) having completed tertiary education (ISCED 
levels 5-8) (%) 

Social cohesion 

Average nominal monthly wages and salaries (national currency) 
Index of real wages and salaries (index of nominal wages and salaries divided by the inflation 
index) (2016 = 100) 
GINI coefficient 
Poverty gap 
*Early leavers from education and training: proportion of the population aged 18–24 with at 
most lower secondary education who are not in further education or training (%) 

Standard of living 

Number of passenger cars relative to population size (number per thousand population) 
Number of mobile phone subscriptions relative to population size (number per thousand 
population) 
Mobile broadband penetration (per 100 inhabitants) 
Fixed broadband penetration (per 100 inhabitants) 

56.2 
36.2 
31.7 

: 
: 
: 
: 
: 

: 

33.8 
33.5 
34.2 
56.4 
28.7 w 

40.0 

18.7 

61.5 
42.1 
40.1 

17.9 s 
23.4 s 
7.1 s 
51.6 s 
: 

: 

26.1 
26.8 
25.1 
47.3 
21.3 

29.9 

18.9 

63.7 
42.5 
40.7 

16.6 s 
23.1 s 
7.2 s 
53.0 s 
: 

: 

23.7 
24.4 
22.8 
48.2 
19.1 

28.8 

17.6 

65.6 
43.7 
41.4 

16.2 s 
23.3 s 
7.2 s 
53.2 s 
: 

: 

22.4 
22.8 
21.8 
46.7 
17.4 

25.6 

17.1 

66.6 
45.2 
42.7 

15.7 s 
23.9 s 
7.4 s 
52.9 s 
: 

: 

20.8 
21.3 
19.9 
45.4 
15.5 

23.1 

16.6 

69.7 
48.4 
45.1 

13.9 s 
24.1 s 
7.0 s 
55.0 s 
: 

: 

17.3 
16.5 
18.4 
35.6 
12.4 

23.7 

13.3 

Note 

2008 
16 096 w 
80 w 

2015 
21 906 w 
98 w 

2016 
22 342 w 
100 w 

2017 
22 928 w 
101 w 

2018 
24 276 w 
106 w 

2019 
25 213 w 
109 w 

: 
: 
19.6 

34 
33.1 
11.4 

2008 
128.0 
1 223.4 w 

2015 
185.0 
1 005.9 w 

: 
: 

54.5 w 
18 w 

34 
32.9 
9.9 

2016 
190.0 
989.9 w 

57.4 w 
18 w 

32 
37.3 
8.5 

2017 
194.0 
968.3 w 

61.1 w 
19 w 

32 
37.7 
7.1 

2018 
200.0 
935.9 w 

60.9 w 
19 w 

31 
32.0 
7.1 

2019 
205.0 
924.8 w 

65.1 w 
22 w 

Note 

5) 

5) 
5) 

111 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Infrastructure 
Density of railway network (lines in operation per thousand km²) 

Length of motorways (kilometres) 

Innovation and research 
Public expenditure on education relative to GDP (%) 
*Gross domestic expenditure on R&D relative to GDP (%) 
Government budget appropriations or outlays on R&D (GBAORD), as a percentage of GDP 
(%) 
Percentage of households who have internet access at home (%) 

Environment 
*Index of greenhouse gas emissions,  CO2 equivalent (1990 = 100) 
Energy intensity of the economy (kg of oil equivalent per 1 000 euro GDP at 2015 constant 
prices) 
Electricity generated from renewable sources relative to gross electricity consumption (%) 
Road share of inland freight transport (based on tonne-km) (%) 

Energy 
Primary production of all energy products (thousand TOE) 
Primary production of crude oil (thousand TOE) 
Primary production of solid fuels (thousand TOE) 
Primary production of gas (thousand TOE) 
Net imports of all energy products (thousand TOE) 
Gross inland energy consumption (thousand TOE) 
Gross electricity generation (GWh) 

Agriculture 

Agricultural production volume index of goods and services (at producer prices) (2010 = 100) 
Utilised agricultural area (thousand hectares) 
Livestock numbers: live bovine animals (thousand heads, end of period) 
Livestock numbers: live swine (thousand heads, end of period) 
Livestock numbers: live sheep and live goats (thousand heads, end of period) 
Raw milk available on farms (thousand tonnes) 
Harvested crop production: cereals (including rice) (thousand tonnes) 
Harvested crop production: sugar beet (thousand tonnes) 
Harvested crop production: vegetables (thousand tonnes) 

2008 
27.5 sw 

237 

2008 
: 
0.22 sw 
: 

29.0 

2008 
84.8 w 
388.5 

13.8 
84.3 w 

2008 
1 647 
0 
1 378 
0 
1 404 s 
3 032 
6 311 

2008 
97.6 w 
1 064.4 
253.5 w 
246.9 w 
: 
: 
615.1 
0.0 
581.8 

Note 
1) 

Note 

7) 

Note 
6) 

Note 

Note 

112 

2015 
27.5 s 

259 

2015 
: 
0.44 
: 

69.0 

2015 
70.3 w 
293.3 

21.7 
96.0 w 

2015 
1 271 
0 
876 
0 
1 395 s 
2 661 
5 646 

2015 
106.4 w 
1 264.4 
253.0 
195.0 
822.0 s 
417.4 w 
483.8 
0.0 
844.9 

2016 
26.9 s 

259 

2016 
: 
0.44 
: 

75.0 

2016 
65.4 w 
290.0 

24.1 
96.9 w 

2016 
1 121 
0 
745 
0 
1 590 s 
2 706 
5 630 

2016 
112.2 w 
1 267.1 
255.0 
203.0 
825.0 s 
477.4 
640.9 
0.0 
810.0 

2017 
26.9 s 

259 

2017 
: 
0.35 
: 

74.0 

2017 
: 
293.0 

24.8 
96.4 w 

2017 
1 166 
0 
849 
0 
1 553 s 
2 763 
5 600 

2017 
99.9 w 
1 266.0 
255.0 
202.0 
832.0 s 
462.2 
447.7 
0.0 
769.6 

2018 
26.9 s 

287 

2018 
: 
0.36 
: 

79.0 

2018 
: 
267.2 

24.8 
97.2 w 

2018 
1 148 
0 
800 
0 
1 514 s 
2 593 
5 607 

2018 
111.8 w 
1 264.1 
256.0 
196.0 
844.0 s 
478.5 
598.3 
0.0 
792.9 

2019 
26.9 s 

335 

2019 
: 
0.37 
: 

82.0 

2019 
: 
284.1 

23.8 
96.7 w 

2019 
1 143 
0 
860 
0 
1 664 s 
2 844 
5 870 

2019 
: 
1 264.6 
219.0 
136.0 
771.0 s 
456.1 
563.1 
0.0 
772.7 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Source: Eurostat and the statistical authorities in North Macedonia 

: = not available 
  d =  definition differs 
  e = estimated value 
  p = provisional 

s = Eurostat estimate 

  w = data supplied by and under the responsibility of the national statistical authority and published on an "as is" basis and without any assurance as regards 

their quality and adherence to EU statistical methodology 
* = Europe 2020 indicator 
** = Macroeconomic Imbalance Procedure (MIP) indicator 

  Footnotes: 

1)  Data is harmonised with the surface area in the Register of territorial units that is maintained by Agency for Real Estate Cadastre, as the official source of the 

surface areas of the territorial units in the country. 

2)  Data cover bilateral over-night transactions. The interest rates are calculated as weighted averages. 
3)  End of year (31 December). 
4)  Laspeyres unit value index. 2015 = 100. 
5)  Source: Agency for electronic communications (AEC). 
6)  Part of the greenhouse gas inventory prepared in the context of the Third National Communication (UNFCCC). 
7)  Total expenditures for R&D as published in statistical reviews for R&D activity. 

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