Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on providing macro-financial assistance to the Republic of North Macedonia
Date: 2023-02-06
Institutions: Directorate-General for Economic and Financial Affairs, European Commission
Subjects: EU aid, EU candidate countries, EU loan, European neighbourhood policy, North Macedonia, accession negotiations, economic reform, economic stabilisation, financial aid, macro-financial assistance

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 6.2.2023  COM(2023) 74 final 2023/0034 (COD)  Proposal for a DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on providing macro-financial assistance to the Republic of North Macedonia {SWD(2023) 42 final}  
 
EXPLANATORY MEMORANDUM 

1. 

• 

CONTEXT OF THE PROPOSAL 

Reasons for and objectives of the proposal 

Given the strong dependence of North Macedonia on imported energy, soaring gas and 
electricity  prices  led  to  a  significant  deterioration  of  the  external  balances  in  2022.  
Underpinned by sound economic and monetary policy and committed reform implementation, 
the  economy  was  on  track  to  recover  from  the  COVID-19  induced  setback.  However,  the 
steep rise in global food and energy prices began to take its toll on domestic demand and the 
country’s external balance. A significant widening of the country’s trade and current account 
deficit  has  emerged  since  the  beginning  of  2022  despite  strong  inflows  of  remittances  from 
abroad.  Foreign reserves declined in  the  early months of  2022, mainly in response to  rising 
import prices and external  debt  repayments,  but  have stabilised since the summer.  Year-on-
year GDP growth still averaged 2.6% in the first half of 2022 but slowed to 2% in the third 
quarter. High uncertainty over the economic fallout from Russia’s war of aggression against 
Ukraine,  rising inflation  and tighter financing conditions  are  set  to  curtail  domestic demand 
further.  Exports  are  impacted  by  weaker  external  demand  and  by  ongoing  supply  chain 
disruptions, particularly those affecting the production of automotive components, one of the 
country’s main export sectors.  

Against  the  backdrop  of  tighter  global  financial  conditions,  higher  energy  prices  and 
higher-than-expected  losses  by  the  domestic  state-owned  electricity  producer,  the 
government  of  North  Macedonia  renewed  its  request  for  macro-financial  assistance 
(MFA)  on  18  October  2022.  The  Commission  had  put  the  government’s  initial  request  for 
MFA, submitted on 19 April 2022, on hold, mainly because the economy was still relatively 
resilient and because there were some other options to meet external financing needs in 2022. 
In April, the government had already secured Staff Approval from the International Monetary 
Fund (IMF) for a 24-month precautionary and liquidity line (PLL) of up to EUR 530 million, 
which was officially approved by the IMF Executive Board on 22 November 2022. The IMF 
estimates that  the country’s  external  financing needs in  2023  will  amount to  some EUR 1.5 
billion, reflecting a large current account deficit and high repayments on external government 
debt  (including  a  Eurobond  that  will  mature  in  July  2023).  Given  significant  uncertainties 
regarding the availability and costs of external market financing (which is assumed to cover 
over half of the country’s 2023 external financing needs), the Commission is now submitting 
a proposal to the European Parliament and the Council to provide an MFA loan of up to EUR 
100 million to North Macedonia. The proposed legal basis will be Article 212 of the Treaty on 
the Functioning of the European Union.  

The proposed MFA would help North Macedonia to cover part of the country’s residual 
external  financing  needs  in  2023,  which  are  estimated  at  EUR  800  million  under  the 
IMF’s baseline scenario.  The operation would reduce the economy’s short-term balance of 
payments  and  fiscal  vulnerabilities  and  demonstrate  the  EU’s  support  for  the  country  when 
addressing this challenging situation. Its design and implementation would take account of the 
policy  guidance  agreed  in  the  Joint  Conclusions  of  the  Economic  and  Financial  Dialogue 

EN 

1 

  EN 

between  the  EU  and  the  Western  Balkans  and  Türkiye  of  24  May  20221,  as  well  as  the 
programme North Macedonia has agreed with the IMF2. 

The  disbursement  would  take  place  in  two  instalments.  The  release  of  each  instalment 
would be  conditional  on  progress  being made  with the implementation of  a number of 
policy measures to be agreed between the Commission and the authorities and listed in a 
Memorandum  of  Understanding  (MoU)  as  well  as  on  a  satisfactory  track  record 
implementing  the  IMF  programme.  The  MoU  is  likely  to  focus  on  policy  reforms 
addressing fiscal governance, tax policy, the management of public investment, public-private 
partnerships,  business  environment,  transparency  in  state  aid,  energy  efficiency,  judiciary 
reform, and the fight against corruption. The policy measures will aim to address some of the 
most important weaknesses of the economy of North Macedonia and its economic governance 
system.  

As further detailed in the Commission Staff Working Document accompanying this proposal, 
the  Commission  considers,  based  also  on  its  assessment  of  the  political  situation,  that  the 
political and economic pre-conditions for the proposed MFA operation have been satisfied. 

• 

General context  

Following  a  partial  recovery  from  the  pandemic-induced  recession,  North  Macedonia 
has  been  severely  hit  by  the  fallout  from  Russia’s  war  of  aggression  against  Ukraine. 
GDP dropped by 4.7% in 2020 but rebounded by 3.9% in 2021, driven by domestic demand. 
Remittances  from  abroad  returned  to  pre-crisis  levels  and  bolstered  household’s  disposable 
income. COVID-19 containment measures were gradually lifted. Growth slowed towards the 
end  of  2021  as  external  demand  weakened,  disruptions  in  global  supply  chains  grew  and 
global  food  and  energy  prices  started  to  rise  rapidly  (fuelled  further  by  the  fallout  from 
Russia’s  war  of  agression  against  Ukraine  in  2022).  North  Macedonia  has  limited  direct 
exposure  to  Russia  or  Ukraine,  but  its  economy  is  vulnerable  to  rising  commodity  prices. 
Government  efforts  to  mitigate  the  impact  on  households  and  small  business  have  caused 
fiscal spending to increase well above the initial budget. Sharply rising food and energy prices 
pushed inflation to almost 20% in the autumn of 2022. GDP grew by 2.6% in the first half of 
2022,  thanks  in  part  to  a  rise  in  investment,  but  this  rise  was  largely  due  to  increases  in 
companies’ stocks. Annual growth slowed to 2% in the third quarter of 2022. 

The  external  position  started  to  deteriorate  in  late  2021  as  import  prices  rose  sharply. 
The  current  account  deficit  stood  at  3.5%  of  GDP  in  2021  (the  same  as in  2020).  This  was 
above  the  2017-2019  average  of  1.5%.  However,  the  goods  trade  balance  has  deteriorated 
steadily  since  the  last  quarter  of  2021,  largely  on  account  of  rising  energy  prices  and 
reflecting the country’s high dependence on energy imports. The economy imports over 30% 
of its domestic energy needs and fully relies on imports for gas and oil. Driven by the sharply 
deteriorating energy balance, the four-quarter moving average current account deficit rose to 
7.3% of GDP in the third quarter of 2022, compared to 1% in the third quarter of 2021. This 
was  despite  a  marked  increase  in  private  transfers  (remittances)  and  the  services  surplus, 
which was helped by a rebound in tourism. The external debt ratio had decreased each  year 
between 2016 and 2019 but jumped by 7.3 percentage points (pps.) in 2020 to 80.3% of GDP 

1 
2 

https://www.consilium.europa.eu/media/56385/st09459-en22.pdf 
https://www.imf.org/en/Publications/CR/Issues/2022/11/29/Republic-of-North-Macedonia-Request-for-
an-Arrangement-under-the-Precautionary-and-525935 

EN 

2 

  EN 

 
                                                 
and rose further to 81.4% in 2021, mainly as a result of continued foreign financing for crisis-
induced needs.  

Foreign reserves dropped heavily in the first half of 2022, mainly due to higher energy 
imports and external debt repayments. Foreign exchange reserves declined by over 14% in 
the first half of 2022 due to the increased conversion of domestic denar-denominated savings 
into  euro;  a  surge  in  energy  imports;  external  debt  payments;  and  decreasing  valuations  of 
securities  holdings.  In  early  2022,  during  a  period  of  high  energy  imports,  the  central  bank 
intervened  in  the  foreign  exchange  market  to  support  the  de  facto  exchange  rate  peg  to  the 
euro. Forex markets stabilised somewhat over the summer due to seasonally high inflows of 
foreign currency that exceeded central bank expectations and supported by a EUR 250 million 
private  placement  of  government  securities  in  Germany  in  September.  Foreign  exchange 
reserves  increased  each  month  between  July  and  December  to  reach  100%  of  the  IMF’s 
reserve adequacy metric and now correspond to 3.9 months of imports. However, reserves are 
expected  to  decline  again  as  the  heating  season  progresses  and  energy  imports  increase 
further. 

The  central  bank  has  been  tightening  monetary  policy  to  counter  rising  inflation 
expectations and protect the de facto exchange rate peg. Headline inflation rose to 19.8% 
in October 2022, reflecting the high pass-through of the global energy and food price shock, 
but abated somewhat in November and December. Since April 2022, the policy rate has been 
raised by 350 basis points in eight consecutive hikes to 4.75%, thereby increasing the spread 
to the European Central Bank (ECB). The central bank also adjusted reserve requirement rates 
in  June  and  September  to  dis-incentivise  the  shift  into  euro  deposits  that  was  a  significant 
factor  behind  the  fall  in  reserves  in  early  2022.  These  actions  have  reduced  inflation 
expectations and pressures on the exchange rate. 

The authorities have responded to the external shocks with significant fiscal support. In 
addition  to  ongoing  expenditures  to  support  the  energy  sector  and  maintain  subsidised 
electricity  prices  for  households,  the  authorities  of  North  Macedonia  adopted  a  EUR  400 
million  package  of  measures  in  March  2022,  and  another  one  in  October,  worth  EUR  350 
million, to protect households from rising food and energy prices, and to help firms maintain 
liquidity. Largely on account of under-implementation of the capital expenditure budget, the 
fiscal deficit for the full year of 2022, at 4.3% of government-projected GDP, remained below 
the  revised  target  (5.3%)  and  in  line  with  the  government’s  initial  target.  The  government 
intends  to  continue  supporting  the  loss-making  domestic  electricity  producer  and  end 
customers also in 2023, yet in a more targeted fashion. The level of general government debt 
and  public  debt  (including  the  debt  of  state-owned  enterprises)  remained  moderate  but  rose 
markedly in 2020 and 2021, reflecting high fiscal deficits and, in 2020, the fall in GDP.  

The 2023 budget, adopted by the Parliament in December 2022, raises the fiscal deficit 
target  (compared  with  original  plans  outlined  in  the  May  2022  medium-term  fiscal 
strategy) from 4.2% to 4.6% of GDP. At the same time, the government lowered the real 
GDP growth projection for 2023, to 2.9%. The 2023 budget provides for a small consolidation 
effect  from  the  withdrawal  of  some  fiscal  stimulus  measures  as  well  as  a  reduction  in 
subsidies  to  the  state-owned  electricity  company.  It  is  based  on  a  number  of  fiscal 
consolidation measures, in particular revenue-enhancing reforms of the tax system, which the 
government  adopted  in  December  2022.  In  line  with  the  policy  guidance  of  the  May  2022 
Joint  Conclusions,  crisis-related  fiscal  support  is  projected  to  become  better  targeted  to 
vulnerable groups.  

The Commission’s autumn forecast projects moderating growth and some decline in the 
fiscal deficit after 2022, while risks are clearly to the downside. GDP growth in 2022 and 

EN 

3 

  EN 

2023  is  set  to  slow  to  2.3%  and  2.5%  respectively  as  high  inflation  weighs  on  domestic 
demand. The fiscal deficit is set to remain high in 2023 due to the continuing need to support 
the  economy  during  the  energy  crisis.  The  government  may  therefore  have  to  postpone  its 
plans for fiscal consolidation by another year. At the same time, the government is committed 
to implementing its reform agenda in public financial management. The  new organic budget 
law, adopted by the Parliament in July 2022, puts a cap on the fiscal deficit (3% of GDP in 
non-crisis  times)  and  on  general  government  debt  (60%  of  GDP),  and  will,  once  applied, 
anchor  fiscal  policy  in  the  medium  term.  The  growth  outlook  could  be  challenged  if 
geopolitical challenges lead to further energy and food price shocks, possibly in combination 
with a further tightening of global financial conditions and more difficult access to capital for 
emerging  market  economies.  On  the  other  hand,  the  EU  accession  process  could  bolster 
reforms,  fiscal  and  external  sustainability,  including  through  the  further  strengthening  of 
foreign direct investment inflows.  

External  financing  needs  are  high  in  2023  and  market  conditions  remain  volatile.  The 
IMF has  estimated the  country’s external  gross financing needs in  2023  at  EUR 1.5 billion. 
This includes high debt refinancing needs, which mainly result from the government’s need to 
repay  its  2016  Eurobond  worth  EUR  450  million.  Overall,  the  IMF  assumes  that  the 
government  will  raise  EUR  800  million  in  external  market  borrowing.  This  may  prove 
challenging,  given  current  geopolitical  uncertainties  and  a  difficult  financing  environment. 
North  Macedonia  has  a  track  record  of  steady  sovereign  access  to  international  capital 
markets at favourable terms. Yet sovereign spreads have increased considerably over the past 
months,  against  the  backdrop  of  the  global  tightening  in  financial  conditions,  and  plans  to 
issue  Eurobonds  have  been  put  on  hold  across  the  Western  Balkans.  In  this  context,  the 
proposed MFA would help North Macedonia meet its residual financing needs.  

• 

Consistency with existing policy provisions in the policy area 

The  European  Parliament  and  the  Council  adopted  Decision  (EU)  2020/701  on  providing 
previous  macro-financial  assistance  to  enlargement  and  neighbourhood  countries  in  the 
context of the COVID-19 pandemic on 25 May 2020. This provided North Macedonia with 
EUR 160 million in loans that were fully disbursed in 2020-2021. 

• 

Consistency with other EU policies 

The EU  and  North Macedonia concluded a  stabilisation  and association  agreement  in  2001, 
which entered into force in 2004. The Council granted candidate status to the country in 2005. 
Since  October  2009,  the  Commission  has  continuously  recommended  to  open  accession 
negotiations  with  North  Macedonia.  In  March  2020,  the  European  Council  endorsed  the 
Council’s decision to open accession negotiations with North Macedonia3. On 19 July 2022, 
the  first  Intergovernmental  Conference  on  accession  negotiations  took  place  with  North 
Macedonia,  following  the  approval  of  the  Negotiating  Framework  by  the  Council.  The 
Commission  immediately  launched  the  analytical  review  of  the  EU  acquis  (screening) 
process, which is the first step in the negotiating process. 

The EU is the most important trade partner for North Macedonia. In 2021, the EU accounted 
for  77.3%  of  the  total  exports  and  for  46.2%  of  the  total  imports  of  North  Macedonia.  EU 
countries  are  also  the  most  important  investors  in  North  Macedonia,  accounting  for  56%  of 
total FDI inflows in 2021 and for 62% of total FDI stock in 2020. 

3 

https://www.consilium.europa.eu/media/43076/26-vc-euco-statement-en.pdf 

EN 

4 

  EN 

 
                                                 
EU candidate  countries  are eligible for MFA if they  fulfil certain  conditions.  The EU MFA 
would complement and enhance the effectiveness of other financial assistance to the country, 
such  as  that  offered  under  Instrument  for  Pre-Accession  (IPA)  operations,  including  budget 
support. This includes EUR 80 million of EU budget support under the new EUR 1 billion EU 
Energy Support Package for the Western Balkans. 

2. 

• 

LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY 

Legal basis 

The  legal  basis  for  this  proposal  is  Article 212  of  the  Treaty  on  the  Functioning  of  the 
European Union (TFEU)  

• 

Subsidiarity (for non-exclusive competence)  

The proposal complies with the subsidiarity principle because the objective of stabilising the 
external position of North Macedonia cannot be sufficiently achieved by the  Member States 
alone and can be better achieved by the European Union. The main reasons are the budgetary 
constraints faced at the national level and the need for strong donor coordination in order to 
maximise the scale and effectivenes of the assistance.  

• 

Proportionality 

The proposal complies with the proportionality principle because it is limited to the minimum 
required in order to achieve the objectives of short-term macroeconomic stability and does not 
go beyond what is necessary for that purpose.  

As identified by the Commission , on the basis of IMF estimates in the context of the PLL, the 
amount of the proposed new MFA corresponds to about 12.5% of the govenrment’s external  
financing needs in 2023. Given the precautionary nature of the IMF programme (which is due 
to disburse support in 2023 and only ‘if needed’ in 2024), this is consistent with other MFA 
operations’ burden-sharing practices.   

• 

Choice of instrument 

Project  finance  or  technical  assistance  would  not  be  suitable  or  sufficient  to  address  the 
macroeconomic  objectives.  The  key  value  added  of  the  MFA  in  comparison  with  other  EU 
instruments would be to alleviate the external financial constraints and to help create a stable 
macroeconomic  framework  (including  by  promoting  a  sustainable  balance  of  payments  and 
budgetary situation) and an appropriate framework for structural reforms. By helping to put in 
place  an  appropriate  overall  policy  framework,  MFA  can  increase  the  effectiveness  of  the 
actions  financed  in  North  Macedonia  under  other,  more  narrowly-focused,  EU  financial 
instruments.  

3. 

• 

RESULTS 
CONSULTATIONS AND IMPACT ASSESSMENTS 

EVALUATIONS, 

POST 

EX 

OF 

STAKEHOLDER 

Stakeholder consultations 

MFA is provided as an integral part of the international support for the economic stabilisation 
of North Macedonia. The Commission services have consulted with the IMF and the World 
Bank when preparing this proposal. The Commission has also been in regular contact with the 
authorities of North Macedonia. 

EN 

5 

  EN 

• 

Collection and use of expertise 

In  line  with  the  requirements  of  the  Financial  Regulation,  the  Commission  services  carried 
out,  in  June  2020  and  in  the  context  of  the  COVID-19  MFA  operation,  an  operational 
assessment  of  the  financial  and  administrative  processes  of  North  Macedonia,  in  order  to 
ascertain that the procedures in place for the management of programme assistance, including 
MFA,  provide  adequate  guarantees.  The  assessment  was  based  on  established  methodology 
and drew on existing documentation from the Commission’s budget support programmes with 
North  Macedonia  and  its  technical  assistance  for  improving  the  public  finance  management 
(PFM)  system.  It  found  that  North  Macedonia  meets  the  eligibility  requirement  to  have  a 
sufficiently  credible  and  relevant  programme  to  improve  public  finance  management  for 
budget support from the EU. The compliance of the country’s PFM system with basic budget 
support  requirements  was  confirmed  by  the  latest  PEFA  report  of  May  2022.  The  Risk 
Management Framework 2021 evaluated the PFM risk of North Macedonia as moderate.  

• 

Impact assessment 

The EU’s MFA is an exceptional emergency instrument aimed at addressing severe balance-
of-payment  difficulties  in  non-EU  countries.  This  MFA  proposal  is  exempted  from  the 
requirement  to  carry  out  an  impact  assessment  in  accordance  with  the  Commission's  better 
regulation  guidelines4  because  there  is  a  political  imperative  to  move  ahead  quickly  in  a 
situation that requires a rapid response.  

More  generally,  the  Commission's  MFA  proposals  build  on  lessons  learned  from  ex  post 
evaluations carried out on past operations in EU candidate countries. The new MFA and the 
associated  economic  adjustment  and  reform  programme  will  help  alleviate  the  short-term 
financing needs of North Macedonia and support policy measures to strengthen the medium-
term  balance  of  payments,  fiscal  sustainability  and  sustainable  growth,  thus  complementing 
the PLL programme  adopted by the  IMF’s Executive Board in  November 2022. The policy 
conditions should address some of the most important weaknesses of the country’s economy 
and economic governance system. Possible areas of conditionality could in principle include 
reforms  to  strengthen  fiscal  governance,  tax  policy,  the  management  of  public  investment, 
public-private  partnerships,  the  business  environment,  transparency  in  state  aid,  energy 
efficiency, reform of the judiciary and the fight against corruption.  

• 

Fundamental rights 

EU  candidate  countries  are  eligible  for  MFA.  A  pre-condition  for  granting  MFA  is  that  the 
eligible  country  respects  effective  democratic  mechanisms, 
including  a  multi-party 
parliamentary system and the rule of law, and guarantees respect for human rights. 

As noted in the 2022 Commission Communication on EU Enlargement Policy5, the launch of 
the  EU  accession  negotiations  process  with  North  Macedonia  in  2022  was  a  major 
breakthrough  and  marked  the  beginning  of  a  new  phase  in  relations  between  the  EU  and 
North Macedonia. As also noted in the Communication, the legal framework on the protection 
of  fundamental  rights  in  North  Macedonia  is  largely  in  line  with  EU  standards,  but 
implementation needs to be improved. 

4. 

BUDGETARY IMPLICATIONS 

The proposed MFA operation of up to EUR 100 million for North Macedonia is planned to be 
disbursed  in  two  equal  tranches  to  be  released  between  2023  and  2024.  The  required 

4 
5 

SWD(2015) 111 final 
COM(2022) 528 final 

EN 

6 

  EN 

                                                 
provisioning of the loan of EUR 100 million at a rate of 9% of the External Action Guarantee 
will  be  programmed  under  the  IPA  for  a  total  amount  of  EUR  9  million  (budget  line 
15.020203  IPA  III  –  Provisioning  of  the  Common  Provisioning  Fund  (External  Action 
Guarantee – MFA).).  

5. 

• 

OTHER ELEMENTS 

Implementation plans and monitoring, evaluation and reporting arrangements 

The European Union will make the MFA available to North Macedonia for a total amount of 
up to  EUR 100 million,  which will be provided in  the form of medium- to long-term  loans 
and will help cover North Macedonia’s residual financing needs in 2023-2024. The assistance 
is  planned  to  be  disbursed  in  two  tranches  at  regular  intervals  during  the  MFA’s  duration, 
provided that the policy measures attached to each tranche have been fully implemented.  

The Commission  will manage the MFA. Specific provisions on the prevention of fraud and 
other irregularities that are consistent with the Financial Regulation are applicable.  

The Commission and the authorities of North Macedonia will agree on an MoU setting out the 
structural reform measures associated with the proposed MFA operation, including aspects of 
timing  and  sequencing.  Moreover,  as  is  normally  the  case  with  MFA,  the  disbursements 
would  be  conditional  on  a  number  of  points  including  satisfactory  reviews  under  the  IMF 
programme.  The  Commission  will  work  closely  with  the  authorities  of  North  Macedonia  to 
monitor progress on the policy actions and the preconditions that have been specified above.  

EN 

7 

  EN 

2023/0034 (COD) 

Proposal for a 

DECISION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on providing macro-financial assistance to the Republic of North Macedonia 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 212 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national parliaments, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

(5) 

(6) 

6 

Relations  between  the  European  Union  ('the  Union')  and  the  Republic  of  North 
Macedonia ('North Macedonia') continue to develop within the framework of the EU 
Stabilisation Agreement and the EU accession negotiations launched in July 2022. 

The  economy  of  North  Macedonia  has  been  significantly  affected  by  the  2020 
recession caused by the COVID-19 pandemic, as well as by the recent energy crisis. 
The situation contributed to the country’s sizeable financing gap, deteriorating external 
position, and growing fiscal needs.   

The  government  of  North  Macedonia  has  demonstrated  a  strong  commitment  to 
further  reforms,  focusing  on  the  key  policy  areas  identified  in  the  Joint  Ministerial 
Conclusions  of  May  2022  and  including  areas  of  the  fundamentals  such  as  the 
judiciary,  the  fight  against  corruption and organised crime, good  governance and the 
rule of law. 

North  Macedonia  has  successfully  completed 
the  COVID-19  macro-financial 
assistance  operation6,  because  all  the  reform  actions  agreed  with  the  Union  in  the 
Memorandum of Understanding have been carried out. 

The government  and the IMF reached staff-level agreement (in April 2022) on a 24-
month precautionary and liquidity line (PLL)  for up to EUR 530 million, which was 
officially  approved  by  the  IMF  Executive  Board  on  22  November  2022.  The  IMF 
programme  aims  to  mitigate  the  worsening  external  situation,  support  fiscal 
consolidation  and  accelerate  structural  reforms  in  a  number  of  areas,  including  tax 
policy and public investment.  

In  view  of  the  worsening  economic  situation  and  outlook,  North  Macedonia  first 
requested  complementary  macro-financial  assistance  from  the  Union  in  April  2022.  
The  Commission  put  the  request  on  hold,  however,  because  the  economy  of  North 
Macedonia  was  still  proving  quite  resilient  at  that  time  and  there  were  some  other 

Decision (EU) 2020/701 of the European Parliament and of the Council of 25 May 2020 on providing 
macro‐financial assistance to enlargement and neighbourhood partners in the context of the COVID‐19 
pandemic (OJ L 165, 27.5.2020, p. 31). 

EN 

8 

  EN 

                                                 
(7) 

(8) 

(9) 

financing options available to meet 2022 external financing needs. The government of 
North Macedonia renewed its request for macro-financial assistance in October 2022.  

Given that North Macedonia is an EU candidate country, which started the accession 
negotiations process in July 2022, the country is considered eligible to receive macro-
financial assistance from the Union.  

The Union’s macro-financial assistance should be an exceptional financial instrument 
of untied and undesignated balance-of-payments support, which aims at addressing the 
the 
beneficiary’s 
implementation  of  a  policy  programme  containing  strong  immediate  adjustment  and 
structural  reform  measures  designed  to  improve  the  balance-of-payments  position  in 
the short term. 

immediate  external  financing  needs  and  should  underpin 

Given that there are still significant residual external financing needs in the country’s 
balance of payments, beyond the needs met by the resources provided by the IMF, the 
macro-financial  assistance  to  be  provided  to  North  Macedonia  is,  in  the  current 
exceptional  circumstances,  considered  to  be  an  appropriate  response  to  the  country's 
request  for  support  in  stabilising  its  economy,  in  conjunction  with  the  IMF 
programme.  The  Union's  macro-financial  assistance  would  support  the  economic 
stabilisation  and  the  structural  reform  agenda  of  North  Macedonia,  supplementing 
resources made available under the IMF's financial arrangement. 

(10)  The  Union's  macro-financial  assistance  should  aim  to  support  the  restoration  of  a 
sustainable  external  financing  situation  for  North  Macedonia  thereby  supporting  its 
economic and social development. 

(11)  The  Union’s  macro-financial  assistance  is  expected  to  go  hand-in-hand  with  the 
implementation  of  disbursements  of  budget  support  operations  under  the  Instrument 
for Pre-Accession. 

(12)  The determination of the amount of the Union's macro-financial assistance is based on 
a quantitative assessment of the residual external financing needs of North Macedonia 
and takes into account its capacity to finance itself with its own resources, in particular 
the  international  reserves  at  its  disposal.  The  Union's  macro-financial  assistance 
should complement the programmes and resources provided by the IMF and the World 
Bank.  The  determination  of  the  amount  of  the  assistance  also  takes  into  account 
expected  financial  contributions  from  multilateral  donors  and  the  need  to  ensure  fair 
burden  sharing  between  the  Union  and  other  donors,  as  well  as  the  pre-existing 
deployment  of  the  Union's  other  external  financing  instruments  in  North  Macedonia 
and the added value of the overall Union involvement.   

(13)  The Commission should ensure that the Union's macro-financial assistance is  legally 
and substantially in line with the key principles, objectives and measures taken within 
the different areas of external action and other relevant Union policies. 

(14)  The  Union's  macro-financial  assistance  should  support  the  Union's  external  policy 
towards North Macedonia. The Commission and the High Representative should work 
closely  together  throughout  the  macro-financial  assistance  operation  in  order  to 
coordinate and ensure the consistency of the Union’s external policy. 

(15)  The  Union's  macro-financial  assistance  should  support  the  commitment  of  North 
Macedonia  to  values  shared  with  the  Union,  including  democracy,  the  rule  of  law, 
good  governance,  respect  for  human  rights,  sustainable  development  and  poverty 
reduction,  as  well  as  its  commitment  to  the  principles  of  open,  rules-based  and  fair 
trade. 

EN 

9 

  EN 

(16)  A  pre-condition  for  granting  the  Union's  macro-financial  assistance  should  be  that 
North Macedonia respects effective democratic mechanisms – including a multi-party 
parliamentary system – and the rule of law, and guarantees respect for human rights. 
In  addition,  the  specific  objectives  of  the  Union's  macro-financial  assistance  should 
strengthen  the  efficiency,  transparency  and  accountability  of  the  public  finance 
management  systems,  the  governance  and  supervision  of  the  financial  sector  and 
promote  structural  reforms  aimed  at  supporting  sustainable  and  inclusive  growth, 
decent  employment  creation  and  fiscal  consolidation.  Both  the  fulfilment  of  the 
preconditions and the achievement of those objectives should be regularly monitored 
by the Commission. 

(17) 

In  order  to  ensure  that  the  Union’s  financial  interests  linked  to  the  Union’s  macro-
financial assistance are protected efficiently, North Macedonia should take appropriate 
measures  relating  to  the  prevention  of,  and  fight  against,  fraud,  corruption  and  any 
other irregularities linked to the assistance. In addition, provision should be made for 
the Commission to carry out checks and for the Court of Auditors to carry out audits. 

(18)  Release of the Union's macro-financial assistance is without prejudice to the powers of 

the European Parliament and the Council as budgetary authority.  

(19)  The  amounts  of  the  provision  required  for  macro-financial  assistance  in  the  form  of 
loans  should  be  consistent  with  the  budgetary  appropriations  provided  for  in  the 
multiannual financial framework. 

(20)  The  Union's  macro-financial  assistance  should  be  managed  by  the  Commission.  In 
order  to  ensure  that  the  European  Parliament  and  the  Council  are  able  to  follow  the 
implementation  of  this  Decision,  the  Commission  should  regularly  inform  them  of 
developments relating to the assistance and provide them with relevant documents. 

(21) 

In  order  to  ensure  uniform  conditions  for  the  implementation  of  this  Decision, 
implementing powers should be conferred on the Commission. Those powers should 
be  exercised  in  accordance  with  Regulation  (EU)  No 182/2011  of  the  European 
Parliament and of the Council7. 

(22)  The  Union's  macro-financial  assistance  should  be  subject  to  economic  policy 
conditions,  to  be  laid  down  in  a  Memorandum  of  Understanding.  In  order  to  ensure 
uniform conditions of implementation and for reasons of efficiency, the Commission 
should  be  empowered  to  negotiate  such  conditions  with  the  authorities  of  North 
Macedonia under the supervision of the committee of representatives of the Member 
States  in  accordance  with  Regulation  (EU)  No 182/2011.  Under  that  Regulation,  the 
advisory procedure should, as a general rule, apply in all cases other than as provided 
for  in  that  Regulation.  Considering  the  potentially  important  impact  of  assistance  of 
more than EUR 90 million, it is appropriate that the examination procedure be used for 
operations  above  that  threshold.  Considering  the  amount  of  the  Union's  macro-
financial  assistance  to  North  Macedonia,  the  examination  procedure  should  apply  to 
the adoption of the Memorandum of Understanding, and to any reduction, suspension 
or cancellation of the assistance, 

(23)  Given  the  limited  amount  of  the  financial  assistance  (EUR  100  million),  its  one-off 
nature,  and  the  desired  time  frame  of  the  disbursement,  the  back-to-back  funding 
approach  would  ensure  more  flexibility  and  efficiency  of  the  borrowing  operations 

7 

Regulation  (EU)  No 182/2011  of  the  European  Parliament  and  of  the  Council  of  16 February  2011 
laying down the rules and general principles concerning mechanisms for control by Member States of 
the Commission's exercise of implementing powers (OJ L 55, 28.2.2011, p. 13). 

EN 

10 

  EN 

                                                 
compared  to  the  diversified  funding  strategy.  Therefore,  as  a  way  of  exception  the 
Commission should fund the loan instalments in the capital market back-to-back and 
not  by  using  its  diversified  funding  strategy  provided  for  in  Article  220a  of  the 
Financial  Regulation.  It  is  therefore  appropriate  to  fund  the  financial  assistance 
through individual financial transactions.  

HAVE ADOPTED THIS DECISION: 

1. 

2. 

3. 

4. 

5. 

1. 

Article 1 

The Union shall make macro-financial assistance of a maximum amount of EUR 100 
million  available  to  North  Macedonia  ("the  Union's  macro-financial  assistance"), 
with  a  view  to  supporting  the  country’s  economic  stabilisation  and  a  substantive 
reform agenda. The entire amount shall be provided in the form of loans. The release 
of  the  Union's  macro-financial  assistance  is  subject  to  the  approval  of  the  Union 
budget  for  the  relevant  year  by  the  European  Parliament  and  the  Council.  The 
assistance  shall  contribute  to  covering  the  balance  of  payments  needs  of  North 
Macedonia as identified in the IMF programme.  

In  order  to  finance  the  loan,  the  Commission  shall  be  empowered  on  behalf  of  the 
Union  to  borrow  the  necessary  funds  on  the  capital  markets  or  from  financial 
institutions and to on-lend to North Macedonia the corresponding amounts under the 
conditions  applicable  to  the  borrowings.  The  loans  shall  have  a  maximum  average 
maturity of up to 15 years. 

The  release  of  the  Union's  macro-financial  assistance  shall  be  managed  by  the 
Commission in a manner consistent with the agreements or understandings reached 
between the IMF and North Macedonia, and with the key principles and objectives of 
economic reforms set out in the EU-North Macedonia Stabilisation and Association 
Agreement. 

The Commission shall regularly inform the European Parliament and the Council of 
developments 
including 
disbursements  thereof,  and  shall  provide  those  institutions  with  the  relevant 
documents in due time. 

the  Union's  macro-financial  assistance, 

regarding 

The Union's macro-financial assistance  shall be  made available for  a period  of two 
and  a  half  years,  starting  from  the  first  day  after  the  entry  into  force  of  the 
Memorandum of Understanding referred to in Article 3(1). 

Where  the  financing  needs  of  North  Macedonia  decrease  fundamentally  during  the 
period of the disbursement of the Union's macro-financial assistance compared to the 
initial  projections,  the  Commission,  acting  in  accordance  with  the  examination 
procedure  referred  to  in  Article 7(2),  shall  reduce  the  amount  of  the  assistance  or 
suspend or cancel it. 

Article 2 

A  pre-condition  for  granting  the  Union's  macro-financial  assistance  shall  be  that 
North  Macedonia  respects  effective  democratic  mechanisms  –  including  a  multi-
party parliamentary system – and the rule of law, and guarantees respect for human 
rights. 

EN 

11 

  EN 

 
2. 

3. 

1. 

2. 

3. 

4. 

1. 

2. 

3. 

8 

The  Commission  shall  monitor  the  fulfilment  of  this  pre-condition  throughout  the 
life-cycle of the Union's macro-financial assistance.  

Paragraphs  1  and  2  shall  be  applied  in  accordance  with  Council  Decision 
2010/427/EU8. 

Article 3 

The Commission shall, in accordance with the examination procedure referred to in 
Article 7(2),  agree  with  the  authorities  of  North  Macedonia  on  clearly  defined 
economic policy and financial conditions, focusing on structural reforms and sound 
public finances, to which the Union's macro-financial assistance is to be subject, that 
are  to  be  laid  down  in  a  Memorandum  of  Understanding  ("the  Memorandum  of 
Understanding")  which  shall  include  a  timeframe  for  the  fulfilment  of  those 
conditions.  The  economic  policy  and  financial  conditions  set  out 
the 
Memorandum  of  Understanding  shall  be  consistent  with  the  agreements  or 
understandings  referred to  in  Article 1(3), including the macroeconomic adjustment 
and  structural  reform  programmes  implemented  by  North  Macedonia  with  the 
support of the IMF.  

in 

The  conditions  referred  to  in  paragraph  1  shall  aim,  in  particular,  at  enhancing  the 
efficiency,  transparency  and  accountability  of  the  public  finance  management 
systems  in  North  Macedonia,  including  for  the  use  of  the  Union's  macro-financial 
assistance. Progress  in  mutual  market  opening,  the development of rules-based  and 
fair trade, and other priorities in the context of the Union's external policy shall also 
be taken into due account when designing the policy measures. Progress in attaining 
those objectives shall be regularly monitored by the Commission. 

The  detailed  financial  terms  of  the  Union's  macro-financial  assistance  shall  be  laid 
down  in  a  Loan  Agreement  to  be  concluded  between  the  Commission  and  North 
Macedonia.  

The  Commission  shall  verify,  at  regular  intervals,  that  the  conditions  referred  to  in 
Article 4(3)  continue  to  be  met,  including  whether  the  economic  policies  of  North 
Macedonia  are  in  accordance  with  the  objectives  of  the  Union's  macro-financial 
assistance.  For  that  verification,  the  Commission  shall  coordinate  closely  with  the 
IMF and the World Bank, and, where necessary, with the European Parliament and 
the Council. 

Article 4 

Subject to the conditions in paragraph 3, the Union's macro-financial assistance shall 
be made available by the Commission in two equal instalments. 

The  amounts  of  the  Union's  macro-financial  assistance  shall  be  provisioned,  where 
required, in accordance with Regulation (EU) 2021/947 of the European Parliament 
and of the Council.  

The  Commission  shall  decide  on  the  release  of  the  instalments  subject  to  the 
fulfilment of the following conditions: 

Council  Decision  2010/427/EU  of  26 July  2010  establishing  the  organisation  and  functioning  of  the 
European External Action Service (OJ L 201, 3.8.2010, p. 30). 

EN 

12 

  EN 

 
                                                 
(a) 

(b) 

(c) 

4. 

1. 

2. 

3. 

4. 

5. 

the pre-condition set out in Article 2; 

a  continuous  satisfactory  track  record  of  implementing  a  policy  programme  that 
contains strong adjustment and structural reform measures supported by a disbursing 
IMF credit arrangement;  

the  satisfactory  implementation  of  the  economic  policy  and  financial  conditions 
agreed in the Memorandum of Understanding. 

The release of the second instalment shall not, in principle, take place earlier than 3 
months after the release of the first instalment.  

Where the conditions in paragraph 3 are not met, the Commission shall temporarily 
suspend  or  cancel  the  disbursement  of  the  Union's  macro-financial  assistance.  In 
such  cases,  it  shall  inform  the  European  Parliament  and  the  Council  of  the  reasons 
for that suspension or cancellation.  

The  Union's  macro-financial  assistance  shall  be  disbursed  to  the  National  Bank  of 
North  Macedonia.  Subject  to  the  provisions  to  be  agreed  in  the  Memorandum  of 
Understanding,  including  a  confirmation  of  residual  budgetary  financing  needs,  the 
Union  funds  may  be  transferred  to  the  Ministry  of  Finance  of  North  Macedonia  as 
the final beneficiary.  

Article 5 

The  borrowing  and  lending  operations  related  to  the  Union's  macro-financial 
assistance shall be carried out in euro using the same value date and shall not involve 
the Union in the transformation of maturities, or expose it to any exchange or interest 
rate risk, or to any other commercial risk. 

Where  the  circumstances  permit,  and  if  North  Macedonia  so  requests,  the 
Commission may take the steps necessary to ensure that an early repayment clause is 
included in the loan terms and conditions and that it is matched by a corresponding 
clause in the terms and conditions of the borrowing operations.  

Where circumstances permit the interest rate of the loan to be improved, and if North 
Macedonia  so  requests,  the  Commission  may  decide  to  refinance  all  or  part  of  its 
initial  borrowings  or  may  restructure  the  corresponding  financial  conditions. 
Refinancing  or  restructuring  operations  shall  be  carried  out  in  accordance  with 
paragraphs  1  and  4  and  shall  not  have  the  effect  of  extending  the  maturity  of  the 
borrowings concerned or of increasing the amount of capital outstanding at the date 
of the refinancing or restructuring. 

North  Macedonia shall bear  all the costs incurred by the Union  which relate  to  the 
borrowing and lending operations under this Decision. 

The  Commission  shall  inform  the  European  Parliament  and  the  Council  of 
developments in the operations referred to in paragraphs 2 and 3. 

EN 

13 

  EN 

1. 

2. 

3. 

(a) 

(b) 

(c) 

(d) 

(e) 

9 

10 

11 

12 

13 

Article 6 

The  Union's  macro-financial  assistance  shall  be  implemented  in  accordance  with 
Regulation  (EU,  Euratom)  No  1046/2018  of  the  European  Parliament  and  of  the 
Council9.  

The  implementation  of  the  Union's  macro-financial  assistance  shall  be  under  direct 
management.  

The  loan  agreement  to  be  agreed  with  the  authorities  of  North  Macedonia  shall 
contain provisions:  

ensuring  that  North  Macedonia  regularly  checks  that  financing  provided  from  the 
budget  of the Union has been properly used, takes appropriate  measures  to  prevent 
irregularities  and  fraud,  and,  if  necessary,  takes  legal  action  to  recover  any  funds 
provided under this Decision that have been misappropriated; 

ensuring the protection of the Union’s financial interests, in particular providing for 
specific measures in relation to the prevention of, and fight against, fraud, corruption 
and  any  other  irregularities  affecting  the  Union’s  macro-financial  assistance,  in 
accordance  with  Council  Regulation  (EC,  Euratom)  No 2988/9510,  Council 
Regulation (EC, Euratom) No 2185/9611, Regulation (EU, Euratom) No 883/2013 of 
the  European  Parliament  and  of  the  Council12  and,  for  those  Member  States 
participating  in  enhanced  cooperation  regarding  the  European  Public  Prosecutor’s 
Office,  Council  Regulation  (EU)  2017/193913;  notably,  to  that  end,  the  European 
Anti-Fraud Office (OLAF) shall be expressly authorised to carry out investigations, 
including in particular on-the-spot checks and inspections including digital forensic 
operations  and 
its 
representatives to carry out checks, including on-the-spot checks and inspections;  

interviews;  expressly  authorising 

the  Commission,  or 

expressly  authorising  the  Commission  and  the  Court  of  Auditors  to  perform  audits 
during  and  after  the  availability  period  of  the  Union's  macro-financial  assistance, 
including document audits and on-the-spot audits, such as operational assessments; 

ensuring  that  the  Union  is  entitled  to  early  repayment  of  the  loan  if  it  has  been 
established  that,  in  relation  to  the  management  of  the  Union's  macro-financial 
assistance,  North  Macedonia  has  engaged  in  any  act  of  fraud  or  corruption  or  any 
other illegal activity detrimental to the financial interests of the Union. 

Ensuring that North Macedonia shall bear all costs incurred by the Union that relate 
to financial assistance. 

Regulation  (EU,  Euratom)  No 1046/2018  of  the  European  Parliament  and  of  the  Council  of  18  July 
2018 on the financial rules applicable to the general budget of the Union and repealing Regulation (EC, 
Euratom) No 966/2012 (OJ L 193, 30.07.2018, p. 1). 
Council Regulation (EC, Euratom) No 2988/95 of 18 December 1995 on the protection of the European 
Communities financial interests (OJ L 312, 23.12.1995, p. 1). 

Council  Regulation  (EC,  Euratom)  No 2185/96  of  11 November  1996  concerning  on-the-spot  checks 
and inspections carried out by the Commission to protect the Communities’ financial interests against 
fraud and other irregularities (OJ L 292, 15.11.1996, p. 2). 

Regulation  (EU,  Euratom)  No 883/2013  of  the  European  Parliament  and  of  the  Council  of 
11 September  2013  concerning  investigations  conducted  by  the  European  Anti-Fraud  Office  (OLAF) 
and  repealing  Regulation  (EC)  No 1073/1999  of  the  European  Parliament  and  of  the  Council  and 
Council Regulation (Euratom) No 1074/1999 (OJ L 248, 18.9.2013, p. 1). 

Council  Regulation  (EU)  2017/1939  of  12  October  2017  implementing  enhanced  cooperation  on  the 
establishment of the European Public Prosecutor’s Office (‘the EPPO’) (OJ L 283, 31.10.2017, p. 1). 

EN 

14 

  EN 

                                                 
4. 

1. 

2. 

1. 

(a) 

(b) 

(c) 

2. 

the 

implementation  of 

Before 
the 
Commission  shall  assess,  by  means  of  an  operational  assessment,  the  soundness  of 
the country’s financial arrangements, the administrative procedures, and the internal 
and external control mechanisms, which are relevant to the assistance. 

the  Union's  macro-financial  assistance, 

Article 7 

The  Commission  shall  be  assisted  by  a  committee.  That  committee  shall  be  a 
committee within the meaning of Regulation (EU) No 182/2011. 

Where  reference  is  made  to  this  paragraph,  Article  5  of  Regulation  (EU)  No 
182/2011 shall apply. 

Article 8 

By  30 June  of  each  year,  the  Commission  shall submit  to  the  European  Parliament 
and to the Council a report on the implementation of this Decision in the preceding 
year, including an evaluation of that implementation. The report shall: 

examine the progress made in implementing the Union's macro-financial assistance; 

assess the economic situation and prospects of North Macedonia, as well as progress 
made in implementing the policy measures referred to in Article 3(1); 

indicate  the  connection  between  the  economic  policy  conditions  laid  down  in  the 
Memorandum  of  Understanding,  the  country’s  ongoing  economic  and  fiscal 
performance  and  the  Commission’s  decisions  to  release  the  instalments  of  the 
Union's macro-financial assistance. 

Not  later  than  2  years  after  the  expiry  of  the  availability  period  referred  to  in 
Article 1(4),  the  Commission  shall  submit  to  the  European  Parliament  and  to  the 
Council  an  ex-post  evaluation  report,  assessing  the  results  and  efficiency  of  the 
Union’s  completed  macro-financial  assistance  and  the  extent  to  which  it  has 
contributed to the aims of the assistance. 

Article 9 

This Decision shall enter into force on the third day after its publication in the Official Journal 
of the European Union.  

Done at Brussels, 

For the European Parliament 
The President 

For the Council 
The President 

EN 

15 

  EN 

  
 
  
 
LEGISLATIVE FINANCIAL STATEMENT 

1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE  

1.1. 

Title of the proposal/initiative  

Proposal  for  a  Decision  of  the  European  Parliament  and  of  the  Council  providing 
further Macro-financial assistance to the Republic of North Macedonia 

1.2. 

Policy area(s) concerned in the ABM/ABB structure14  

Policy area:  Economic and Financial Affairs 

Activity: 

International economic and financial affairs 

1.3. 

Nature of the proposal/initiative  

X The proposal/initiative relates to a new action  

  The  proposal/initiative 
project/preparatory action15  

relates 

to  a  new  action 

following  a  pilot 

  The proposal/initiative relates to the extension of an existing action  

 The proposal/initiative relates to an action redirected towards a new action  

1.4. 

Objective(s) 

1.4.1.  The  Commission's  multiannual 

strategic  objective(s) 

targeted  by 

the 

proposal/initiative  

 “An Economy that works for people” 

“A stronger Europe in the world” 

1.4.2. 

Specific objective(s) 

(a)  Supporting macro-financial stability and promoting growth-enhancing reforms 
outside the EU, including through regular economic dialogues with key partners and 
by providing macro-financial assistance; and  

(b)  Supporting  the  enlargement  process  and  the  implementation  of  the  EU 
enlargement  and  neighbourhood  policies  and  other  EU  priorities  in  partners  by 
conducting economic analysis and providing policy assessments and advice. 

1.4.3.  Expected result(s) and impact 

(1) 

(2) 

(3) 

(4) 

Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted. 

Contribute  to  covering  the  external  financing  needs  of  North  Macedonia  in  the 
context of a significant deterioration of their external accounts brought about by the 
on-going COVID-19 pandemic and the energy crisis.  

Alleviate the budgetary financing needs of North Macedonia. 

Support the fiscal consolidation effort and external stabilisation in the context of the 
IMF programme. 

Support  structural  reforms  aimed  at 
the  overall  macroeconomic 
management,  strengthening  economic  governance  and  transparency,  and  improving 
conditions for sustainable growth. 

improving 

14 
15 

ABM: activity-based management; ABB: activity-based budgeting. 
As referred to in Article 54(2)(a) or (b) of the Financial Regulation. 

EN 

16 

  EN 

 
                                                 
1.4.4. 

Indicators of performance 

Specify the indicators for monitoring progress and achievements. 

The authorities of North Macedonia will be required to report on a set of economic 
indicators  to  the  Commission  services  on  a  regular  basis  and  provide  a 
comprehensive report on the compliance with the agreed policy conditions ahead of 
the disbursement of the instalments of the assistance.  

The  Commission  services  will  continue  to  monitor  public  finance  management, 
following  the  operational  assessment  of  the  financial  circuits  and  administrative 
procedures in North Macedonia, that was delivered in July 2020. The EU Delegation 
in  North  Macedonia  will  also  provide  regular  reporting  on  issues  relevant  for  the 
monitoring of the assistance. The Commission services will remain in close contact 
with the IMF and the World Bank to benefit from their insights from their on-going 
activities in North Macedonia.  

An annual report to the Council and European Parliament is foreseen in the proposed 
legislative decision, including an assessment of the implementation of this operation. 
An  independent  ex-post  evaluation  of  the  assistance  will  be  carried  out  within  two 
years after the expiry of the implementation period. 

1.5. 

Grounds for the proposal/initiative  

1.5.1.  Requirement(s) to be met in the short or long term including a detailed timeline for 

roll-out of the implementation of the initiative 

The  disbursement  of  the  assistance  will  be  conditional  on  the  fulfilment  of  the 
political  pre-conditions  and a satisfactory track  record in  the implementation  of the 
economic programme between North Macedonia and the IMF, which was approved 
by the Board on 22 November 2022, following implementation by the authorities of 
North  Macedonia  of  a  number  of  prior  actions.  In  addition,  the  Commission  shall 
agree with the authorities of North Macedonia on specific policy conditions, listed in 
a Memorandum of Understanding.  

The assistance is planned to be disbursed in two instalments. The disbursement of the 
first  instalment  is  expected  to  take  place  in  autumn  2023.  The  second  instalment 
could be disbursed in early 2024, provided that the policy measures attached to each 
instalment have been implemented in a timely manner. 

1.5.2.  Added  value  of  Union  involvement  (it  may  result  from  different  factors,  e.g. 
coordination gains, legal certainty, greater effectiveness or complementarities). For 
the purposes of this point 'added value of Union involvement' is the value resulting 
from  Union  intervention  which  is  additional  to  the  value  that  would  have  been 
otherwise created by Member States alone. 

The instrument of macro-financial assistance is a policy-based instrument directed to 
alleviate  short-  and  medium-term  external  financial  needs.  In  the  context  of  the 
ongoing  energy  crisis,  MFA  will  help  to  provide  economic  and  fiscal  policy  space 
for the authorities to mount an effective economic response to the crisis By helping 
the partner overcome the economic difficulties amplified by the energy crisis and the 
COVID-19  pandemic, 
to  promoting 
macroeconomic  and  political  stability  in  North  Macedonia.  MFA  will  complement 
the  resources  made  available  by  the  international  financial  institutions,  bilateral 
donors  and  other  EU  financial  institutions.  In  doing  so,  it  will  contribute  to  the 
overall  effectiveness  of  the  financial  support  provided  by  the  international 

the  proposed  MFA  will  contribute 

EN 

17 

  EN 

community, as well as of other EU financial assistance, including budgetary support 
operations. 

Furthermore, by providing long-term financing in highly concessional terms, usually 
lower  than  the  rest  of  international  or  bilateral  donors,  the  MFA  programme  is 
expected to help the government to execute its budget without fiscal deviations and 
to contribute to debt sustainability. 

In  addition  to  the  financial  impact  of  the  MFA,  the  proposed  programme  will 
strengthen the government’s reform commitment. This result will be achieved, inter 
alia,  through  appropriate  conditionality  for  the  disbursement  of  the  assistance.  In  a 
larger context, the programme will signal that the EU is ready to support its partners 
in  candidate  countries  and  in  the  wider  Eastern  neighbourhood  in  moments  of 
economic difficulties.  

1.5.3.  Lessons learned from similar experiences in the past 

Macro-financial  assistance  operations  in  partners  are  subject  to  ex-post  evaluation. 
Evaluations  conducted  thus  far  (on  completed  MFA  programmes),  conclude  that 
MFA  operations  do  contribute,  albeit  sometimes  modestly  and  indirectly,  to  the 
improvement  of  the  external  sustainability,  the  macroeconomic  stability  and  the 
achievement of structural reforms in the partner. In most cases, MFA operations had 
a positive effect on the balance of payments of the partner and helped to relax their 
budgetary constraints. They also led to somewhat higher economic growth. 

1.5.4.  Compatibility  with  the  Multiannual  Financial  Framework  and  possible  synergies 

with other appropriate instruments 

Compatibility with the Multiannual Financial Framework 

In the 2021-2027 multiannual financial framework, the provisioining of MFA loans 
will  be  covered  by  the  External  Action  Guarantee  within  Global  Europe 
(Neighbourhood,  Development  and  International  Cooperation  Instrument).  The 
(indicative) lending capacity foreseen for MFA is sufficient to cover this operation as 
well as other MFA operations being implemented. 

Possible synergies with other appropriate instruments 

The  EU  is  among  the  major  donors  to  North  Macedonia,  supporting  its  economic, 
structural and institutional reforms as well as civil society. In this context, this MFA 
programme complements other EU external actions or instruments, in particular the 
Instrument  for  Pre-accession  assistance  (IPA)  operations,  used  to  support  North 
Macedonia.  

The key value added of the MFA in comparison to other EU instruments would be to 
help create a stable macroeconomic framework, including by promoting a sustainable 
balance-of-payments  and  budgetary  situation,  and  an  appropriate  framework  for 
advancing structural reforms. MFA does not provide regular financial support and is 
to  be  discontinued  as  soon  as  the  partner’s  external  financial  situation  has  been 
brought back onto a sustainable path.  

MFA would also  be complementary to  interventions envisaged by the international 
community,  in  particular  the  adjustment  and  reform  programmes  supported  by  the 
IMF and the World Bank. 

EN 

18 

  EN 

Assessment of the different available financing options, including scope for redeployment 

By  using  loans,  this  MFA  operation  increases  the  effectiveness  of  the  EU  budget 
through the leverage effect and provides for the best cost-efficient option.  

The  Commission  is  empowered  to  borrow  funds  from  capital  markets  on  behalf  of 
both  the  European  Union  and  Euratom  using  the  guarantee  of  the  EU  budget.  The 
aim is to obtain funds from the market at the best available rates due to the top credit 
status  (AAA-rated  by  Fitch,  Moody's  and  DBRS,  AA  by  S&P,  all  with  stable 
outlook)  of  the  EU/Euratom  and  then  on-lend  them  to  eligible  borrowers  in  the 
context of lending under the EFSM, BoP, MFA and to Euratom projects. Borrowing 
and  lending  is  conducted  as  a  back-to-back  operation,  ensuring  that  the  EU  budget 
does not take any interest rate or foreign exchange risk. The target of obtaining funds 
at  the  best  available  rates  for  borrowing  and  lending  activities  has  been  achieved 
because those rates are in line with peer institutions (EIB, EFSM, and ESM). 

EN 

19 

  EN 

 
1.6. 

Duration and financial impact of the proposal/initiative 

X limited duration  

–    in effect from 2022 to 2024  

–    Financial impact from 2022 to 2024 for commitment appropriations and from 

2022 to 2025 for payment appropriations.  

 unlimited duration 

–  Implementation with a start-up period from YYYY to YYYY, 

–  followed by full-scale operation. 

1.7.  Management mode(s) planned16  

X Direct management by the Commission 

–  X by its departments, including by its staff in the Union delegations;  

–    by the executive agencies  

 Shared management with the Member States  

 Indirect management by entrusting budget implementation tasks to: 

–   third countries or the bodies they have designated; 

–   international organisations and their agencies (to be specified); 

–   the EIB and the European Investment Fund; 

–   bodies referred to in Articles 70 and 71 of the Financial Regulation; 

–   public law bodies; 

–   bodies governed by private law with a public service mission to the extent that 

they are provided with adequate financial guarantees; 

–   bodies governed by the private law of a Member State that are entrusted with 
the  implementation  of  a  public-private  partnership  and  that  are  provided  with 
adequate financial guarantees; 

–    persons  entrusted  with  the  implementation  of  specific  actions  in  the  CFSP 

pursuant to Title V of the TEU, and identified in the relevant basic act. 

– 

If more than one management mode is indicated, please provide details in the ‘Comments’ section. 

Comments  

16 

Details of management modes and references to the Financial Regulation may be found on the 
BudgWeb site: 
https://myintracomm.ec.europa.eu/budgweb/EN/man/budgmanag/Pages/budgmanag.aspx  

EN 

20 

  EN 

 
                                                 
2. 

MANAGEMENT MEASURES  

2.1.  Monitoring and reporting rules  

Specify frequency and conditions. 

The  actions  to  be  financed  under  this  Decision  will  be  implemented  under  direct 
management  by  the  Commission  from  headquarters  and  with  support  of  the  Union 
delegations.  

This assistance is of macroeconomic nature and its design is consistent with the IMF-
supported programme. The monitoring of the action by the Commission services will 
take  place  on  the  basis  of  progress  in  the  implementation  of  the  IMF  arrangement 
and the implementation of specific reform measures to be agreed with the authorities 
of  the  partners  in  a  Memorandum  of  Understanding  with  a  frequency  that  is 
consistent with the number of instalments (See also point 1.4.4).  

2.2.  Management and control system(s)  

2.2.1. 

Justification of the management mode(s), the funding implementation mechanism(s), 
the payment modalities and the control strategy proposed 

The  actions  to  be  financed  under  this  Decision  will  be  implemented  under  direct 
management  by  the  Commission  from  headquarters  and  with  support  of  the  Union 
delegations.  

MFA disbursements are dependent on successful reviews, and tied to the fulfilment 
of  conditionality  attached  to  each  operation.  The  implementation  of  conditions  is 
closely  monitored  by  the  Commission,  in  close  coordination  with  the  Union 
Delegations. 

2.2.2. 

Information concerning the risks identified and the internal control system(s) set up 
to mitigate them 

Risks identified 

A  reliable  track  record  of  repaying  external  obligations  on  time;  good  credit 
rankings;  sound  macrofiscal  policies  and  moderate  debt  levels  (as  well  as 
improvements  in  the  structure  of  debt  towards  longer  maturities)  underline  the 
country’s  capacity  to  service  its  debts,  even  against  the  background  of  increasing 
public debt levels and rising interest payments. Overall, North Macedonia has a track 
record of steady sovereign access to international capital markets at favorable terms. 
The country’s debt  is  ranked BB-/B by Standard and Poor’s  (August  2022), with  a 
stable outlook. Past progress in developing institutional capacities in public financial 
management  and  in  the  fight  against  corruption  make  it  unlikely  that  the  MFA, 
which  is  not  dedicated  to  specific  expenses  (contrary  to  project  financing,  for 
example),  could  be  used  in  a  fraudulent  way.  Management  systems  in  the  central 
bank  and  the  Ministry  of  Finance,  administrative  procedures,  control  and  oversight 
functions, the security of IT systems and the appropriateness of internal and external 
audit capabilities are at a considerably advanced stage in North Macedonia. There are 
moderate external  risks,  stemming from a possible weakening of the European  and 
global economic environment and from a significantly drawn-out war of aggression 
against Ukraine, impacting further on international energy prices (taking into account 
the  dependence  of  North  Macedonia  on  energy  imports,  including  full  reliance  on 
Russia for gas imports, and the country’s close trade links with the EU market).  

Internal control systems 

EN 

21 

  EN 

The  macro-financial  assistance  will  be  liable  to  verification,  control  and  auditing 
procedures under the responsibility of the Commission, including the European Anti-
Fraud Office (OLAF), and by the European Court of Auditors as foreseen by Article 
129 of the Financial Regulation 

Ex-ante:  Commission  assessment  of  management  and  control  system  in  the 
beneficiary country. For each beneficiary country, an ex-ante operational assessment 
of the financial circuits and control environment is carried out by the Commission, if 
necessary,  with  technical  support  from  consultants.  An  analysis  of  accounting 
procedures, segregation of duties and internal/external audit of the Central bank and 
the Ministry of Finance are carried out to ensure a reasonable level of assurance for 
sound  financial  management.  Should  weaknesses  be  identified,  they  are  translated 
into  conditions,  which  have  to  be  implemented  before  the  disbursement  of  the 
assistance. Also, when needed, specific arrangements for payments (e.g. ring-fenced 
accounts) are put in place. 

During  implementation:  Commission  checks  of  periodic  partner  declarations.  The 
payment is subject to (1) monitoring by DG ECFIN staff, in close coordination with 
the  EU  Delegations  and  with  the  external  stakeholders,  like  the  IMF,  of  the 
implementation of the agreed conditionalities, and (2) the normal control procedure 
provided  for  by  the  financial  circuit  (model  2)  used  in  DG  ECFIN,  including  the 
verification  by  the  financial  unit  of  the  fulfilment  of  conditions  attached  to  the 
disbursement of the assistance mentioned above. The disbursement relating to MFA 
operations may be subject to additional independent ex-post (documentary and/or on-
the-spot)  verifications  by  officials  of  the  ex-post  control  team  of  the  DG.  Such 
verifications  may  also  be  initiated  at  the  request  of  the  responsible  AOSD. 
Interruptions  and  suspensions  of  payments,  financial  corrections  (implemented  by 
Commission), and recoveries may be practiced where needed (it has not occurred so 
far), and are explicitly foreseen in the financing agreements with the partner. 

2.2.3.  Estimation and justification of the cost-effectiveness of the controls (ratio of "control 
costs ÷ value of the related funds managed"), and assessment of the expected levels 
of risk of error (at payment & at closure)  

The control systems in place, such as the ex-ante operational assessments or the ex-
post assessments, ensured an effective error rate for the MFA payments of 0%. There 
are no known  cases  of  fraud, corruption or illegal  activity. MFA operations have  a 
clear  intervention  logic,  one  that  allows  the  Commission  to  evaluate  their  impact. 
The  controls  enable  the  confirmation  of  assurance  and  of  attainment  of  policy 
objectives and priorities.  

2.3.  Measures to prevent fraud and irregularities  

Specify existing or envisaged prevention and protection measures, e.g. from the Anti-Fraud Strategy. 

To mitigate the risks of fraudulent use several measures have been and will be taken:  

First,  the  Loan  Agreement  will  comprise  a  set  of  provisions  on  inspection,  fraud 
prevention, audits and recovery of funds in case of fraud or corruption. It is further 
envisaged  that  a  number  of  specific  policy  conditions  will  be  attached  to  the 
assistance,  including  in  the  area  of  public  finance  management,  with  a  view  to 
strengthening  efficiency,  transparency  and  accountability.  Also,  the  assistance  will 
be paid to a specific account of the Central Bank of the partner.  

Moreover, in line with the requirements of the Financial Regulation, the Commission 
services  have  carried  out  an  Operational  Assessment  of  the  financial  and 

EN 

22 

  EN 

administrative circuits of North Macedonia to ascertain that the procedures in place 
for  the  management  of  programme  assistance,  including  MFA,  provide  adequate 
guarantees. The assessment was carried out in 2020, and covers areas such as budget 
preparation  and  execution,  public  internal  financial  control,  internal  and  external 
audit,  public  procurement,  cash  and  public  debt  management,  as  well  as  the 
independence of the central bank. Developments in that area will be further closely 
monitored by the EU Delegations in the respective partner. The Commission is also 
using  budget  support  assistance  to  help  the  respective  partners  improve  their  PFM 
systems, and these efforts are strongly supported by other donors. 

Finally, the assistance will be liable to verification, control and  auditing procedures 
under  the  responsibility  of  the  Commission,  including  the  European  Anti-Fraud 
Office (OLAF), and the European Court of Auditors as foreseen by Article 129 of the 
Financial Regulation. 

EN 

23 

  EN 

3. 

3.1. 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE  

Heading(s)  of  the  multiannual  financial  framework  and  expenditure  budget 
line(s) affected  

  Existing budget lines  

In order of multiannual financial framework headings and budget lines. 

Budget line 

Heading of 
multiannual 
financial 
framework 

Number  

Type of  
expenditure 

Diff./Non-
diff.17 

Contribution  

from 
EFTA 
countries
18 

from 
candidate 
countries19 

from third 
countries 

within the 
meaning of 
Article 21(2)(b) of 
the Financial 
Regulation  

15.020203  

Diff. 

NO 

NO 

NO 

NO 

 

New budget lines requested – Not applicable 

17 
18 
19 

Diff. = Differentiated appropriations / Non-diff. = Non-differentiated appropriations. 
EFTA: European Free Trade Association.  
Candidate countries and, where applicable, potential candidates from the Western Balkans. 

EN 

24 

  EN 

 
 
 
 
                                                 
3.2. 

Estimated financial impact of the proposal on appropriations  

3.2.1. 

Summary of estimated impact on operational appropriations  

–    The proposal/initiative does not require the use of operational appropriations  

–  X  The proposal/initiative requires the use of operational appropriations, as explained below: 

Heading of multiannual financial  
framework  

6 

Heading 6 - 'Neighbourhood and the World'  

EUR million (to three decimal places) 

DG: ECFIN 

 Operational appropriations  

Budget line20  

15.020203 

Commitments 

Payments 

(1) 

(2) 

Appropriations  of  an  administrative  nature  financed  from  the 
envelope of specific programmes21  

Budget line  
14.20.03.01  

TOTAL appropriations 
for DG ECFIN 

(3) 

Commitments 

=1 +3 

Payments 

=2 +3 

Year 
2022 

Year 
2023 

Year 
2024 

Year 
2025 

Year 
2026 

Year 
2027 

TOTAL 

9 

9 

9 

9 

0.15 

0.15 

0.15 

9 

9 

0.15 

9.15 

9.15 

20 
21 

EN 

According to the official budget nomenclature. 
Technical and/or administrative assistance and expenditure in support of the implementation of EU programmes and/or actions (former ‘BA’ lines), indirect research, direct research. 

25 

EN 

 
 
 
 
 
                                                 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 TOTAL operational appropriations  

Commitments 

Payments 

  TOTAL  appropriations  of  an  administrative  nature 
financed from the envelope for specific programmes  

(4) 

(5) 

(6) 

TOTAL appropriations  
under HEADING 6 
of the multiannual financial 
framework 

Commitments 

=4+ 6 

Payments 

=5+ 6 

9 

9 

9 

9 

0.15 

0.15 

0.15 

9 

9 

0.15 

9.15 

9.15 

EN 

26 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
If more than one operational heading is affected by the proposal / initiative, repeat the section above: (EUR million (to three decimal places)) 

Heading of multiannual financial  
framework  

7 

Heading 7 – ‘European public administration’ 

This section should be filled in using the 'budget data of an administrative nature' to be firstly introduced in the Annex to the Legislative 
Financial Statement (Annex V to the internal rules), which is uploaded to DECIDE for interservice consultation purposes.  

DG: ECFIN 

Year 
2022 

Year 
2023 

Year 
2024 

Year 
2025 

Year 
2026 

TOTAL 

Human Resource 

Other administrative expenditure 

TOTAL appropriations  
under HEADING 7 
of the multiannual financial 
framework 

Appropriatio
ns 

(Total 
commitments 
Total 
= 
payments) 

0.262 

0.262 

0.262 

0.005 

0.005 

0.267 

0.267 

0.262 

0.786 

0.010 

0.796 

0.267 

0.267 

0.262 

0.796 

Year 
2022 

Year 
2023 

Year 
2024 

Year 
2025 

Year 
2026 

Year 
2027 

TOTAL appropriations  
under HEADINGS 1 to 7 
of the multiannual financial 
framework 

Commitme
nts 

=4+ 6 

0.267 

0.267 

0.417 

9.000 

Payments 

=5+ 6 

0.267 

0.267 

0.417 

9.000 

TOTAL 

9.951 

9.951 

EN 

27 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Reference amount) 

– 

Estimated output funded with operational appropriations  

Commitment appropriations in EUR million (to three decimal places) 

   Indicate 
objectives 
and outputs  

 

Year 2022 

Year 2023 

Year 2024 

Year 2026 

Year 2027 

TOTAL 

Type22 

Number  Cost  Number  Cost  Number  Cost  Number  Cost  Number  Cost 

Total 
number 

Total cost 

SPECIFIC OBJECTIVE NO 123 

- Output 1 

- Output 2 

Grant 
disbursements 
Provisioning of the 
External Action 
Guarantee 

- Output 3 

Ex-post evaluation 

Subtotal for specific objective No 1 

TOTAL COST 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

- 

2 

9 

2 

2 

9 

9 

2 

1 

3 

3 

1 

1 

1 

0.15 

0.15 

0.15 

9 

0.15 

9.15 

9.15 

22 
23 

Outputs are products and services to be supplied (e.g.: number of student exchanges financed, number of km of roads built, etc.).   
As described in point 1.4.2. ‘Specific objective(s)…’   

EN 

28 

EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.2. 

Summary of estimated impact on administrative appropriations  

–  X  The  proposal/initiative  requires  the  use  of  appropriations  of  an 

administrative nature, as explained below: 

EUR million (to three decimal places) 

Year 
2022 

Year 
2023 

Year 
2024 

Year 
2025 

Year  
2026 

TOTAL 

HEADING 7 
of the multiannual 
financial framework 

Human resources  

0.262 

0.262 

0.262 

0.786 

0.005 

0.005 

0.010 

0.267 

0.267 

0.262 

0.796 

Other administrative 
expenditure  

Subtotal HEADING 7 
of the multiannual 
financial framework  

24

Outside HEADING 7
of the multiannual 
financial framework  

Human resources  

Other expenditure  
of an administrative 
nature 

Subtotal  
outside HEADING 7 
of the multiannual 
financial framework  

TOTAL 

0.267 

0.267 

0.262 

0.796 

The  appropriations  required  for  human  resources  and  other  expenditure  of  an  administrative  nature  will  be  met  by 
appropriations from the DG that are already assigned to management of the action and/or have been redeployed within the 
DG. 

24 

Technical  and/or  administrative  assistance  and  expenditure  in  support  of  the  implementation  of  EU programmes 
and/or actions (former ‘BA’ lines), indirect research, direct research. 

EN 

29 

  EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.2.1.  Estimated requirements of human resources  

–  X  The proposal/initiative requires the use of human resources, as explained 

below: 

Estimate to be expressed in full time equivalent units 

Year 
2022 

Year 
2023 

Year 
2024 

Year 
2025 

Year 
2026 

 Establishment plan posts (officials and temporary staff) 

20 01 02 01 (Headquarters and Commission’s Representation 
Offices) 

0.171 

0.171 

0.171 

20 01 02 03 (Delegations) 

01 01 01 01  (Indirect research) 

 01 01 01 11 (Direct research) 

Other budget lines (specify) 

 External staff (in Full Time Equivalent unit: FTE)

25

20 02 01 (AC, END, INT from the ‘global envelope’) 

0.091 

0.091 

0.091 

20 02 03 (AC, AL, END, INT and JPD in the delegations) 

XX 01  xx yy zz  

26

- at Headquarters 

- in Delegations  

01 01 01 02 (AC, END, INT - Indirect research) 

 01 01 01 12 (AC, END, INT - Direct research) 

Other budget lines (specify) 

TOTAL 

XX is the policy area or budget title concerned. 

0.262 

0.262 

0.262 

The human resources required will be met by staff from the DG who are already assigned to management of the 
action  and/or  have  been  redeployed  within  the  DG,  together  if  necessary  with  any  additional  allocation  which 
may  be  granted  to  the  managing  DG  under  the  annual  allocation  procedure  and  in  the  light  of  budgetary 
constraints. 

Description of tasks to be carried out: 

Officials  and 
staff 

temporary 

Director  Dir.  D:  Supervise  and  manage  the  operation,  liaise  with  Council  and 
Parliament for the adoption of the Decision and the approval of the Memorandum of 
Understanding  (MoU),  negotiate  the  MoU  with  the  authorities  of  North  Macedonia, 
review reports, lead missions and assess progress with conditionality compliance. 

HoU/DHoU  Dir.  D:  Assist  the  Director  in  managing  the  operation,  liaising  with 
Council and Parliament for the adoption of the Decision and the approval of the MoU, 
negotiating  with  the  authorities  of  North  Macedonia  the  MoU  and  Loan  Facility 
Agreement  (together  with  DG  BUDGET),  reviewing  reports  and  assessing  progress 
with conditionality compliance.  

DG BUDGET (Units E1, E3 under the supervision of the Director): Prepare the Loan 
Facility  Agreement  (LFA),  negotiate  it  with  the  authorities  of  North  Macedonia  and 
have it approved by the responsible Commission services and signed by both parties. 
Follow up the entry into force of the LFA. Prepare the Commission decision(s) on the 
borrowing transaction(s), follow up the submission of the Request(s) for Funds, select 

25 

26 

AC=  Contract  Staff;  AL  =  Local  Staff;  END=  Seconded  National  Expert;  INT  =  agency  staff; 
JPD= Junior Professionals in Delegations.  
Sub-ceiling for external staff covered by operational appropriations (former ‘BA’ lines). 

EN 

30 

  EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
External staff 

the banks, prepare and execute the funding transaction(s) and disburse the funds to the 
country.  Carry  out  the  back-office  activities  to  follow  up  the  reimbursement  of  the 
loan(s). Prepare the corresponding reports on these activities. 

Desk economists, MFA Sector (Dir. D): Prepare the Decision and MoU, liaise with the 
authorities  and  the  IFIs,  conduct  review  missions,  prepare  Commission  staff  reports 
and  Commission  procedures  related  to  the  management  of  the  assistance,  liaise  with 
external experts for the operational assessment and the ex-post evaluation.  

EN 

31 

  EN 

 
 
3.2.3.  Compatibility with the current multiannual financial framework  

The proposal/initiative: 

–  X  can be fully financed through redeployment within the relevant heading of 

the Multiannual Financial Framework (MFF). 

3.2.4.  Third-party contributions  

The proposal/initiative: 

–  X  does not provide for co-financing by third parties 

EN 

32 

  EN 

 
3.3. 

Estimated impact on revenue  

–  X  The proposal/ 

–  initiative has no financial impact on revenue. 

–   

EN 

33 

  EN