In the aftermath of recent key events, Macedonia seeks to consolidate progress toward itsEuroatlantic integration goals in 2005-2006 and hopes to receive invitations to join NATO and theEU in that time frame. Macedonia continues to face internal and external challenges to these efforts. In 2004, Macedonia's political landscape faced upheaval. In early 2004, President BorisTrajkovski, a key proponent of the power-sharing deal that ended the inter-ethnic conflict in 2001,was killed in a plane accident. Former Prime Minister Branko Crvenkovski won direct presidentialelections to succeed him in April. His successor as Prime Minister resigned later in the year but wasreplaced by Prime Minister Buckovski of the Social Democratic Party. Later in the year, Macedonia held an opposition-initiated referendum to halt thedecentralization process, a key component of the 2001 Ohrid peace process to implementpower-sharing arrangements among different ethnic groups in Macedonia. On the eve of the vote,the United States formally recognized Macedonia under its constitutional name, the "Republic ofMacedonia," (1) in a moveto support to the multi-ethnic Macedonian government and to the Ohrid peace process, and thereferendum failed. Twice-postponed municipal elections were finally held in March 2005. International observers assessed them to be in accordance with international standards but marredby some serious irregularities. Notwithstanding the U.S. move on recognition, U.S. and European officials have emphasizedthe need to resolve the longstanding dispute between Macedonia and Greece over the nameMacedonia. U.N.-sponsored talks have continued. In 2005, the U.N. envoy to this process submitteda compromise proposal for consideration, but no mutually agreeable negotiated solution has yet beenreached. Macedonia is a small, land-locked country in southeastern Europe, formerly part ofYugoslavia. Its population of about 2 million people includes approximately 64% SlavMacedonians, a large ethnic Albanian minority (representing about 25% of the population, accordingto the 2002 census), as well as some ethnic Turks, Roma (Gypsies), and Serbs. For nearly a decadeafter gaining independence in 1991, Macedonia managed to avoid the kind of bloody ethnic conflictthat engulfed other former Yugoslav republics, and even appeared to serve as a sort of model forethnic co-existence in the region. Nevertheless, the international community remained concernedabout the possible consequences of any "spillover" of fighting into Macedonia, since it was fearedthat conflict once sparked in Macedonia could spread beyond its borders and lead to a regional war. In early 2001, an ethnic insurgency threatened to derail Macedonia's fragile stability and leadto another extended conflict in the Balkans. Ethnic Albanian guerrillas calling themselves the"National Liberation Army" (NLA, many with ties to the former Kosovo Liberation Army) claimedresponsibility for a series of attacks on Macedonian police units. The incidents sparked aneight-month armed conflict between the insurgents, who claimed to be fighting for improved rightsfor the ethnic Albanian community, and Macedonia's police and armed forces. The conflict spreadfrom the border region with Kosovo to areas around the capital, Skopje. In August 2001, European and U.S. peace envoys achieved an agreement among Macedonia'smain political parties -- both Slav and ethnic Albanian -- to resolve the crisis. The Ohrid FrameworkAgreement outlined a package of political reforms to expand the rights of the ethnic Albanianminority that was to be implemented as the rebel force disbanded and disarmed under NATOsupervision. Key aspects of the agreement are outlined below. Implementation of the frameworkagreement at first progressed slowly and unsteadily, but consistent international support and pressurehave encouraged greater stability and political normalization. (2) Macedonia's current multi-ethnic government remains committed to the Ohrid process. Itssurrounding region has remained relatively calm, with all western Balkan states seeking closerassociation with and membership in NATO and the European Union. Regional tensions could growin the coming months and years as deliberations begin over the disputed status of neighboringKosovo. At the international level, since September 11, 2001, U.S. and international attention andresources have shifted away from the Balkans and toward other troubled regions of the world,especially in the Middle East. The United States continues to support multilateral efforts to stabilizeMacedonia, but has increasingly looked to the European Union to play a larger international role inthe Balkans, starting with Macedonia. The growing EU role includes both operational elements anda broader integration strategy. The United States has long maintained that peace and security in the Former YugoslavRepublic of Macedonia is important for Balkan stability and U.S. interests. During the 1990s, theUnited States remained actively engaged in multilateral efforts to prevent the spread of ethnicconflict to Macedonia, bolster Macedonian independence and state viability, and manage bilateraldisputes between Macedonia and Greece. U.S. and other international leaders feared that anyprolonged violent conflict involving Macedonia could swiftly become internationalized andimplicate neighboring states, including NATO allies. They therefore frequently expressed supportfor Macedonia's sovereignty and territorial integrity. The multi-year deployment of a smallcontingent of U.S. military forces to Macedonia as part of a U.N. mission in the early 1990s -- thefirst engagement of U.S. military ground forces in the Balkans -- further demonstrated the U.S.commitment to the Macedonian piece of the regional stability puzzle. When violent inter-ethnicincidents threatened to embroil all of Macedonia in early 2001, U.S. representatives played a key rolein international efforts to defuse the conflict, formulate the Ohrid Framework Agreement for peace,and oversee post-conflict stabilization and peace implementation. The United States and its European allies share the same broad goals for Macedonia, whichforesee its full integration, along with other western Balkan states, into Euro-Atlantic institutions anda whole and free Europe at peace. Toward this end, successive U.S. Administrations have workedto achieve sustainable peace in the region and have promoted the open-ended enlargement policiesof NATO and the European Union. At the same time, the United States has supported the gradualbut steady process of shifting greater international responsibility for the Balkan region to theEuropean Union. The EU and its member states have provided the bulk of international financialassistance to the former Yugoslavia and currently account for most of the international militaryforces in the region. The Bush Administration has given greater emphasis to accelerating andsupporting this process, especially with U.S. attention and resources intensely focused on the globalwar on terrorism, Iraq, and other issues. In 2005, the Bush Administration announced a renewedfocus on the region as international processes to manage the issue of Kosovo get under way. However, most observers believe that the United States must still work in concert with the EuropeanUnion, since the EU represents the ultimate stabilizing prospect for countries in the region. Notwithstanding significant changes to the global environment in recent years, the fate ofMacedonia is of ongoing U.S. interest for several reasons. First, the United States remainscommitted to following through on processes underway in Macedonia that have come about in partdue to substantial prior U.S. engagement and investment of political, economic, and militaryresources. The United States shares with the rest of the international community an interest inpreventing a reversal of progress in Macedonia, a relapse into conflict, or weakening of the state'slong-term viability. A related goal is to stem illicit trade in drugs, armaments, and persons throughthe region. While a downturn in developments in Macedonia may not pose any strategic threat tothe United States -- as compared to global terrorism or weapons proliferation -- it would run counterto U.S. goals for greater stability in the region and its peaceful integration into the rest of Europe. A Europe whole, free, and at peace, including Macedonia and the rest of the western Balkan region,remains a U.S. policy objective. Until irreversible progress in Macedonia is secured, the United States will likely remaininvolved in closely monitoring developments and facilitating progress in Macedonia in conjunctionwith the international community. The United States continues to enjoy unparalleled influence andcredibility throughout the Balkans, even as its share of international responsibilities there is steadilyreduced and its visible role diminishes. Recognizing this, U.S. officials have repeatedly rejected thenotion that the United States might "cut and run" from the Balkans, lest the perception of U.S.disengagement have a destabilizing impact. The United States has also solicited and receivedpolitical and military support from the Macedonian government for U.S.-led operations in Iraq andAfghanistan. A second reason why Macedonia continues to be relevant to U.S. interests is that its fate iswidely perceived to be integrally tied with that of neighboring Kosovo, whose final political statushas remained unresolved since the 1999 Kosovo conflict. Kosovo represents a focal concern ofstrategic interest in the region and beyond. 2005 has been dubbed the "year of decision" for Kosovoand a process to determine Kosovo's unresolved status is expected to begin later in the year. TheBush Administration has expressed strong support for moving forward in this process, withoutfavoring a predetermined outcome. Whatever outcome eventually emerges, resolution to Kosovo'sfinal status is likely to have a major impact on the entire region. Macedonia's leaders have neither played nor sought a direct role in Kosovo's governingsituation or final status deliberations; nevertheless, many observers believe that what ultimatelyhappens in Kosovo could have a particularly strong impact on Macedonia. Certain scenarios forKosovo's final status instill concerns about Macedonia's security and viability. Some observers fearthat independence for Kosovo, for example, may inspire breakaway aspirations by Macedonia'sethnic Albanian communities and lead to the creation of a "greater Albania/greater Kosovo." Othersare concerned that efforts to partition Kosovo could be repeated in Macedonia and lead to thecountry's dismantling. There is also the concern that compromise proposals on Kosovo's status mayprompt dissatisfied ethnic Albanians to turn to extremist militant groups in Kosovo, southern Serbia,and Macedonia. An inability to resolve Kosovo's status in the next few years, or at least prolongeduncertainty about any final outcome, could have the same effect. The fact that many possibleoutcomes in Kosovo theoretically remain on the table contributes to an unsettled and insecuresecurity environment. Macedonia is deeply affected by day-to-day events in Kosovo on account ofits shared borders, cross-border ethnic Albanian community ties (including links with ethnicAlbanian insurgent groups), and commercial and illicit trade routes. A third area of interest for the United States has been the role Macedonia has played as a testcase for the development of the European Union's Common Foreign and Security Policy (CFSP) andEuropean Security and Defense Policy (ESDP). To date, Macedonia has served as an example ofconstructive U.S. - European partnership in the Balkans. U.S., NATO, and EU coordinateddiplomatic activity helped to bring about the 2001 Ohrid agreement. U.S. and European officialscontinue to advance shared goals of stabilizing Macedonia and promoting its integration intoEuro-Atlantic institutions. Beyond foreign policy, Macedonia became the first setting for operationalizing the EU'sdefense goals. Once issues regarding NATO and EU institutional and operational links wereresolved (see section on international security presence, below), the United States strongly supportedthe handover of the NATO military operation in Macedonia to the EU in March 2003. Administration officials lauded the transfer of responsibility -- occurring around the same time asthe U.S. - led invasion of Iraq -- as a welcome division of labor and the "right mission" in the "rightplace" for NATO to hand off duties to the EU. (3) It should be kept in mind, however, that the Macedonia missionremained small and limited, not involving an open-ended commitment of forces or a high-intensitysecurity environment. NATO and NATO contributing countries (including the United States) havealso kept a presence on the ground in Macedonia in support of NATO's KFOR mission inneighboring Kosovo. Macedonia's first post-conflict elections were held on September 15, 2002, in a generallypeaceful process. (4) Theleading incumbent governing party of former Prime Minister Ljubco Georgievski (VMRO-DPMNE)fared poorly, while the ten-party opposition alliance called Together for Macedonia (led by the SocialDemocratic Alliance - SDSM, which had governed until 1998) secured 40% of the vote. Togetherfor Macedonia formed a majority coalition with Ali Ahmeti's new ethnic Albanian DemocraticUnion for Integration (DUI) party, thus bringing about the second successive peaceful transfer ofpower from one group of parties to another. The inclusion in government of the DUI alsosymbolized the transformation of Ali Ahmeti from political spokesman of the former rebel NationalLiberation Army to governing party leader. The new government led by Prime Minister BrankoCrvenkovski took office on November 1, 2002. Crvenkovski had previously served as Macedonia'sPrime Minister from 1992 to 1998. Following the 2002 vote, governing party leaders repeatedly expressed their commitment toimproving inter-ethnic relations and implementing the 2001 Ohrid agreement. In contrast,opposition leaders from both the Slav Macedonian and ethnic Albanian parties frequently criticizedthe government's performance and prospects for inter-ethnic cooperation, with some even calling foran ethnic partition of the country. (5) In February 2004, President Boris Trajkovski was killed in a plane crash over Bosnia. Givenhis role as chief architect of the Ohrid agreement and political voice of compromise, some observersbecame concerned that Trajkovski's death might derail post-Ohrid developments. Prime MinisterCrvenkovski decided to run for the office of the presidency and emerged victorious after two roundsof voting in April 2004. In the second round, Crvenkovski soundly defeated the candidate of theopposition VRMO-DPMNE party, Sasko Kedev, by 62.7% to 37.%. (6) The ethnic Albanian partiesbacked Crvenkovski in the second round. Turnout barely surpassed the 50% threshold for validityof the process, but opposition calls for a boycott also did not succeed. (7) Crvenkovski pledged torepresent all citizens of Macedonia and to work toward Macedonia's entry into the EU andNATO. (8) After the presidential election, former Interior Minister Hari Kostov (unaffiliated) replacedCrvenkovski as Prime Minister. In November, Kostov unexpectedly resigned, citing frustration withthe lack of progress in economic reforms and blaming the ethnic Albanian DUI party forobstructionist and corrupt practices. However, the multi-ethnic coalition was maintained. FormerDefense Minister Vlado Buckovski replaced Kostov as Prime Minister and also became leader ofthe Social Democratic Party. Buckovski leads a cabinet comprised of SDSM, DUI, and LiberalDemocratic members. The state of the Macedonian economy is a major area of concern since it plays a crucial roleboth in the country's post-conflict recovery and the successful implementation of the Ohrid accord. However, political instability and inter-ethnic issues have dominated much of the government'sagenda in the immediate post-Ohrid years. Former Prime Minister Kostov cited the lack of progressin implementing reforms as a primary factor leading to his resignation in November 2004. Macedonia's economic outlook foresees steady but only limited GDP growth in the near term. GDPlevels declined by over 4% during the 2001 year of conflict, grew a scant 0.7% in 2002 andrecovered somewhat since then, with GDP growth reaching 3.4% in 2003 and about 3% in 2004. Rising unemployment (around 37%) remains a significant problem and disproportionately affectsthe minority and youth populations. Fighting corruption remains a major priority of the governingparties. Increasing foreign investment in Macedonia is another expressed priority, and is tied toMacedonia's progress in implementing privatization. Macedonia is dependent on trade routesconnecting Greece and Serbia, and is developing further east-west routes between Bulgaria and theAdriatic Sea. In 2004, Macedonian authorities concluded stand-by arrangements with theInternational Monetary Fund and are negotiating new multi-year agreements with the IMF and WorldBank on new lending and reform projects. Census. A prominent element of the Ohridagreement was the holding of a national census that would provide a critical basis for determiningethnic representation in public sector positions and the application of minority rights. Earlier censusproceedings and results had been disputed by the ethnic Albanian community, which felt that itsnumbers were misrepresented. After a delay, a new census was held in November 2002. International monitoring reported a successful process with limited irregularities. Delays inprocessing census data postponed the release of final results until December 1, 2003. A joint U.S.,EU, OSCE, and NATO statement lent full international support to the census results aspublished. (9) Somenationalist opposition members on both the Slav Macedonian and Albanian sides have disputed theresults. Decentralization. Fulfillment of the lastrequirement of the Ohrid accords has involved a package of laws to devolve governing power fromthe center to local authorities and redraw administrative boundaries at the local level. This effortreflected a critical element of the Ohrid process since it would address the ability of ethnic Albaniancommunities to exercise greater rights in local areas where they are concentrated. However, thedecentralization process also involved base territorial issues that would affect power balances at thelocal level, and revived ongoing fears about possible ethnic partition. Over the summer of 2004, the government proposed, and parliament passed (after protracteddebate), legislation on reforming local self-government. The government proposals would graduallyreduce the number of municipalities in Macedonia from 123 to about 80 and establish newboundaries for them. Local governments would gain greater authority over education, policing,social welfare, financing, and other policies. Ethnic Albanians would become the majority in overa dozen municipalities. Opposition parties on both sides of the ethnic divide criticized aspects ofthe law, and nationalist Macedonian groups predicted greater ethnic divisions to result. Especiallycontentious were redistricting plans for the towns of Skopje, Struga, and Kicevo, which under thenew municipality boundaries would merge with surrounding ethnic Albanian villages and, in the caseof Struga, revert to an Albanian majority. Supporters countered that, in addition to supporting theOhrid process and the country's aspirations for NATO and EU membership, the new plan wouldproduce a greater number of ethnically mixed municipalities than before. Other groups criticizedthe lack of transparency exercised during government negotiations on the specifics of the law,including territorial boundaries. 2004 Referendum. In response to thegovernment's plan, Macedonian nationalist groups organized popular protests in Skopje and Struga,which brought out tens of thousands of demonstrators and which turned violent in Struga. Inaddition, opposition parties and the World Macedonian Congress launched a citizens' initiative tohold a referendum on the decentralization plan with the intent to revoke it. Gathering more than180,000 signatures on a referendum petition, well over the required limit, the initiative forcedparliament to schedule a date for the referendum. The referendum was held on November 7, 2004. It presented a single question that askedvoters if they favored an earlier law on the territorial organization of local self-government. Themeasure would be considered passed if a simple majority approved it, provided that a majority ofvoters turned out. A successful vote would have imposed a one-year moratorium on thegovernment's decentralization plans. Government officials and the ethnic Albanian parties (10) urged voters to reject theinitiative through a boycott. International officials called on Macedonian voters to reject a "turn tothe past" and support the Ohrid process. On November 7, only an estimated 26% of the electorateturned out, and the referendum failed due to low turnout. Of those who voted, a large majorityvoted against the government's decentralization package. Opposition groups claimed fraud, but theOSCE said the referendum was "generally consistent" with democratic standards. U.S. unilateralrecognition of Macedonia's constitutional name on the eve of the referendum (see section on namedispute, below) is credited by some as a factor contributing to the vote's defeat. 2005 Local Elections. 84 municipalities and thecapital of Skopje held two rounds of local elections on March 13 and March 27, and a partial re-runon April 10. Parties from the governing coalition performed well: the SDSM-led Together forMacedonia won 36 mayor seats and the DUI won 15 mayor seats, the best showing by far of theethnic Albanian parties. An opposition-supported mayoral candidate won in Skopje. Turnout wasabove 50% for both rounds in generally calm environments. The electoral process came under some criticism by an international election monitoringmission led by the Organization for Security and Cooperation in Europe (OSCE). The OSCEassessed that although the vote was conducted in accordance with some standards, it failed to meetestablished standards of universal suffrage and ballot secrecy. It reported serious irregularities inmany municipalities, undermining the integrity of the process. (11) The United States andEuropean Union expressed disappointment with the irregularities reported during both rounds andemphasized the need to rectify shortcomings to ensure the integrity of future electoral processes. TheEU also specified that adherence to democratic standards such as free and fair elections was anessential prerequisite to closer relations to the EU. Following the elections, the decentralization process will go forward with the transfer ofcompetencies from center to local councils. The government has prepared a detailed implementationplan for the transfer of powers, including control over some revenue collection, education, and publicsector employment. The first stage of the transfer process is to take place in July. Many international observers welcomed the invalidation of the November referendum andbelieve that Macedonia would have suffered serious setbacks on many fronts had it succeeded. Evenwith the failed referendum, some observers believe that the recent debates over decentralizationrevealed ongoing political and societal fissures, not yet healed after the 2001 insurgency, that couldhinder further development and reforms. On the other hand, the defeat of the referendum and furtherprogress in implementing decentralization may point to new opportunities for dialogue oninter-ethnic issues and forward progress in reforms. Macedonia's political leaders have recommittedto moving forward on Macedonia's strategic goals of entry into the EU and NATO, which enjoyoverwhelming public support. Political stability in Macedonia is enhanced by the governing coalition's majority strengthin parliament, even though it remains fraught with internal divisions. Meanwhile, the oppositionparties continue to struggle with their own divisions and have proven willing to fan nationalistsentiment for political gain. An ongoing challenge for Ahmeti's DUI party is to demonstrate that itcan advance ethnic Albanian interests inside the government. Inter-ethnic tensions may alsoresurface in the context of a deteriorating economic situation. The threat posed by residual armed ethnic Albanian extremist groups persists but appearsmore remote now than in 2001-2002. The most prominent extremist group in the post-conflict scenehas been the so-called Albanian National Army (ANA), a radical group claiming to seek theunification of ethnic Albanian lands. Splinters of the old National Liberation Army (NLA) are alsothought to be active. Such groups and individuals appear to enjoy little broad-based public support,but are funded by criminal activity and diaspora support. They reportedly overlap extensively withcriminal groups involved in cigarette smuggling, kidnapping, and trafficking in arms, drugs (mainlyheroin), and persons. (12) In 2002-2003, the Albanian National Army claimed responsibility for a series of targeted terroristattacks in Macedonia, Kosovo, and southern Serbia, prompting the U.N. Mission in Kosovo to labelit a terrorist organization. Some unidentified Albanian militants were spotted during the November2004 referendum. The prevalence of small arms throughout Macedonia, despite international effortsto encourage disarmament, remains a concern. However, the fact that the outbreak in March 2004of violent inter-ethnic riots in neighboring Kosovo, mainly against ethnic Serb communities, did notspill over into Macedonia has been seen as a positive sign that extremist violence can be contained. In late 2004, armed ethnic Albanian militants briefly claimed control over Kondovo, asuburban town outside of Skopje. The paramilitaries took up arms reportedly in protest of theongoing treatment of ethnic Albanians and limited amnesty granted to former militants. Thesituation in Kondovo was defused in December without a major military response by thegovernment. Instead, negotiations with leading ethnic Albanian political leaders led the rebels toagree to disband and de-militarize the town. In June 2005, another incident occurred in Kondovoinvolving the detention and beating of Macedonian policemen. The leader of the armed group inKondovo, Agim Krasniqi, has reportedly re-established Kondovo as a base. Macedonia has had experience with foreign forces on its territory for nearly its entireexistence as an independent country. Compared with Bosnia and Kosovo, the international militarypresence in Macedonia remained small in scale, under a varying succession of mandates. During thewars of Yugoslav secession in the 1990s, the United Nations sent its first "preventive deployment"mission of international peacekeepers to Macedonia to boost stability in the country and todiscourage conflict spillover. The small U.N. mission, which included a U.S. military contingent,was in place from 1993 until 1999. In advance of and during the 1999 Kosovo conflict, NATOdeployed thousands of troops to Macedonia in support of Operation Allied Force and in preparationfor the deployment of KFOR, NATO's peacekeeping force in Kosovo. KFOR has retained a rearheadquarters in Macedonia for logistical and communications functions. Some KFOR participatingnations have also kept national support elements in Macedonia. In response to the 2001 conflict in Macedonia, NATO first carried out Operation EssentialHarvest, a limited mission of about 4,000 troops to supervise the demilitarization and disarmamentof ethnic Albanian rebel forces. As a follow-up mission, NATO launched the smaller OperationAmber Fox to provide a monitoring presence and security for international civilian personneloverseeing implementation of the framework agreement. An even smaller mission, Allied Harmony,took over for Amber Fox in December 2002, providing continuity in NATO's military presence andcontributing to a stable environment in Macedonia. The United States did not contribute forces tothe post-Ohrid NATO missions in Macedonia, but did provide them with logistical and other formsof support. Beginning in 2002, the European Union developed plans to take over the military missionin Macedonia from NATO, under the EU's nascent European Security and Defense Policy (ESDP). Unresolved issues on general principles of security cooperation between NATO and the EU held upfurther movement on the EU plans for several months. In late 2002 -- early 2003, NATO and theEU formalized principles for establishing institutional links, including EU access to NATO assetsand support, under an arrangement dubbed "Berlin Plus." Thereafter the Macedonian governmentinvited the EU to assume responsibility for the follow-on force to NATO's Operation AlliedHarmony. On March 31, 2003, NATO formally handed over the Macedonia military mission to theEuropean Union's Rapid Reaction Force. Operation Concordia represented the EU's first militaryoperation and first demonstration of the Berlin Plus arrangement. The operation comprised about350 troops from over two dozen EU and non-EU countries, with France contributing roughly halfof the force. German Admiral Rainer Feist, NATO's Deputy SACEUR, was the operationalcommander. EUROFOR, the European Operational Rapid Force, (13) assumed operationalcommand of Concordia from France on October 1, and Portugese General Luis Nelson Ferreira DosSantos became the force commander. Operation Concordia drew upon support from NATOcommand facilities at the Supreme Headquarters Allied Powers Europe (SHAPE) and NATOoperational reserves already located in Macedonia. Concordia's mandate was limited at first to sixmonths, but was later extended to December 15, 2003. NATO, meanwhile, retained a separatemilitary and civilian advisory role in Macedonia as part of its NATO Headquarters Skopje mission. NATO closed out its civilian office in June 2004; a military advisory team remains at NATOHeadquarters Skopje to assist in security reforms and provide logistical support to forces inKosovo. (14) The European Union described Operation Concordia as one component of its larger andmulti-faceted commitment to Macedonia, which includes economic assistance and EU-associationbenefits. Beyond Macedonia, the EU's ground-breaking Concordia operation served as a test casefor other EUFOR operations. Notably, the EU assumed military peacekeeping duties from NATOin Bosnia in December 2004. (15) As the EU builds its military capabilities and considersadditional missions beyond EU borders in the future, it will draw on its initial experiences inMacedonia. Proxima. In advance of Operation Concordia'sDecember 15, 2003 termination date, the EU and the Macedonian government considered optionsfor a new EU presence. They agreed to establish an EU police mission (EUPOL), called Proxima,in Macedonia consisting of about 200 civil police officers and resembling the EU police mission inBosnia. The new mission is focused on training local police forces rather than on enforcing policing,border security, or other law enforcement duties. EU police experts "monitor, mentor, and advise"the Macedonian government and local Macedonian police and support their development as anefficient, well-trained, professional, and multi-ethnic police service. (16) The EU formally approved of the Proxima police mission on September 29, 2003, whichbegan on December 15, for a period of one year. In October 2004, the EU Council extendedProxima's mission for a second year, or until December 2005. The Proxima mission was first led byMr. Bart D'Hooge, a police officer from the Netherlands, who was replaced by German BrigadierGeneral JÃ¼rgen Paul Scholz in December 2004. The mission is comprised of 140 unarmedinternational police officers and 30 civilian staff from EU member and candidate countries, as wellas 150 staff from the host nation. Its activities are focused on three programs: public order,organized crime, and border police. The EU mission supplements the police development activities of the Organization forSecurity and Cooperation in Europe (OSCE), which has been actively involved in a range of peaceimplementation tasks, including police training. NATO continues to provide support to the EUmission, but moved into a "minimum presence" in Macedonia, reflecting the end of internationalmilitary operations in the country. The EU also maintains a Special Representative in Skopje. Macedonian officials have expressed satisfaction with the evolution of the EU missions andnote that the country's greater need lies in the area of police reform rather than an external militarypresence. They were pleased to bring to a close the extended chapter of Macedonian dependence onforeign intervention and sought to emphasize the country's return to relative stability andnormalcy. (17) In addition to NATO's continuing advisory role on the ground, Macedonia maintains ties withNATO through institutional associations such as NATO's Partnership for Peace (PFP), theEuro-Atlantic Partnership Council (EAPC), and the Membership Action Plan (MAP) for countriesseeking NATO membership. Macedonia is among the so-called "Vilnius Group" of ten central andeast European countries that came together in 2000 to promote their collective entry into the alliance. At the Prague summit in November 2002, NATO heads of state and government extended invitationsto seven of the Vilnius Group countries and upheld NATO's "open door" policy to other candidatecountries. (18) At theIstanbul summit in June 2004, NATO reaffirmed its Open Door policy and commended the AdriaticCharter countries for their progress in reforms and contributions to regional stability andcooperation. (19) However, no new invitations were issued. For their part, Macedonian officials have set 2006 as atarget date for receiving an invitation to join the alliance. Officials from NATO member countries have frequently praised Macedonia's progress inimplementing defense-related reforms. U.S. officials have noted that Macedonia's involvement inthe Adriatic Charter (see section on regional relations, below) and participation in military operationsin Afghanistan and Iraq demonstrate Macedonia's commitment to contributing to internationalsecurity and would factor into NATO's considerations. (20) Macedonia hosted a NATO crisis management exercise inJanuary-February 2005. In May, officials from NATO and the Macedonian government held theirlatest annual meeting to review Macedonia's progress in implementing the MAP program. A key strategic goal for Macedonia, as well as for other western Balkan countries, is tointensify ties with the European Union and eventually gain EU membership. In May 2004, the EUwelcomed ten additional countries into the union as full members, including Slovenia, a formerrepublic of Yugoslavia. The EU has confirmed in principle the prospect of additional countriesentering the union in the future. (21) At their June 2003 Thessaloniki summit, EU leaders reiterated their "unequivocal support"to the EU aspirations of the western Balkan states and referred to the accession process as"irreversible." At the same time, EU leaders emphasized the primary responsibility of the Balkanstates to implement reforms in order to address significant challenges and eventually to meet EUpolitical and economic entry criteria. They highlighted the region's problems of organized crime,corruption, and illegal immigration. EU leaders agreed to increase CARDS (Community Assistancefor Reconstruction, Development, and Stabilization) assistance to the region by 200 million euroover three years. Some critics charged that the EU, while delivering a welcoming long-term vision,remained weak on specific incentives or encouragement. Supporters of EU policy counter that thepull of the EU perspective provides a powerful incentive for reforms. They also argue there can beno shortcut to the difficult and lengthy process of comprehensive reforms and alignment that allcountries must go through in order to achieve EU membership. Macedonia was the first country to conclude a Stabilization and Association Agreement(SAA) with the EU in 2001 (the SAA entered into force in April 2004). The EU launched theStabilization and Association process in 1999 in order to provide a long-term integration strategy,if not a roadmap, for the five countries of the conflict-ridden western Balkan region. (22) The SAA (the keycomponent of the initiative) provides for increased access to EU markets and EU assistance, andrepresents the first manifestation of formal association with the union, but does not mark the startof accession negotiations. In its Stabilization and Association progress report from March 2004, theEuropean Commission praised evidence of political stability in Macedonia and urged furtherprogress in implementing remaining political reforms. It noted serious economic weaknesses thatpose increasing challenges to the transition process. (23) The Macedonian government formally submitted its application for EU membership onMarch 22, 2004. On October 1, outgoing European Commission President Romano Prodi deliveredto Skopje a comprehensive accession questionnaire that will provide input toward the Commission'seventual "opinion," or evaluation of the country's preparedness for EU candidacy. The Macedoniangovernment delivered its responses to the EU questionnaire in February 2005. Current EUenlargement commissioner Olli Rehn has stated that, depending on its level of progress, Macedoniacould be granted EU candidate status by the end of 2005. Key areas of concern include judicialreforms and rule of law issues, including Macedonia's ability to meet standards of electoral practices. Some observers have also expressed concern that the projected timetable for Macedonia's accessioncould be at risk as a result of the EU's current constitutional crisis and some popular concern in EUmember states about the pace of EU enlargement. The Macedonian leadership has actively promoted regional cooperation and regionalapproaches to common challenges like organized crime, trafficking, and illegal immigration. It hasalso embraced a regional strategy for achieving economic integration and closer ties to NATO andthe EU. At the Prague NATO summit in November 2002, the Presidents of Albania, Croatia, andMacedonia proposed to President Bush the creation of a U.S. - Adriatic Charter, modeled after theU.S. - Baltic Charter (established in 1998). The Adriatic Charter initiative aims to deepen regionalcooperation, promote reforms, and thereby improve the collective integration prospects of the threecountries. U.S. partnership in the initiative underscored U.S. support for the region's ultimate goalof integrating with NATO and the EU. Former Secretary of State Powell and the foreign ministersof the three countries met on May 2, 2003, in Albania, to sign the Adriatic Charter, and called it aguide toward full membership in NATO and other European institutions. (24) During the 1999 Kosovo conflict, tens of thousands of Kosovar Albanian refugees fled toMacedonia. Most returned to Kosovo swiftly after the withdrawal of Serbian forces from theprovince that summer. Since then, Macedonian governments have consistently expressed supportfor international efforts to stabilize neighboring Kosovo. Macedonia has endorsed the internationalcommunity's policy of achieving "standards before status" in Kosovo, with an emphasis onimproving stability in the province and surrounding region. Macedonian leaders have vowed toremain neutral in upcoming anticipated talks on Kosovo's final status, but have urged that anyoutcome not become a destabilizing factor in the region. Macedonian officials maintain concernsabout security on the northern border (neighboring Kosovo and Serbia) and consult regularly withthe Serbian government and UNMIK and NATO personnel in Kosovo about border security. According to Macedonian and NATO officials, the border security situation has been generallystable, although a dispute over the demarcation of the border between Kosovo and Macedoniaremains unresolved. The Macedonian government has urged that the border demarcation issue beresolved before the process to resolve Kosovo's status begins. Macedonia has been in a dispute with Greece over use of the name "Macedonia" ever sinceit declared independence in 1991. Macedonia has asserted its right to use and be recognized by itsconstitutional name, the Republic of Macedonia. Greece has objected to its northern neighbor's useof the name "Macedonia," claiming that it usurps Greece's heritage and implies territorial ambitionsat Greece's expense. Macedonia entered the United Nations in 1993 under the provisional name ofThe Former Yugoslav Republic of Macedonia (FYROM). Overcoming a stretch of tense relationsand a Greek trade embargo, Athens and Skopje signed a bilateral agreement in September 1995 thatnormalized relations and settled all outstanding issues except for the name. Since then, Macedonianand Greek representatives have met periodically under U.N. auspices to continue consultations onthe name disagreement, but no mutually acceptable solution has yet been reached. U.S. diplomatMatthew Nimetz has acted as the U.N. Secretary-General's personal envoy in these talks for the pastseveral years. (26) During the U.N. General Assembly meetings in September 2004, media reports suggestedrenewed efforts to reinitiate international negotiations on the dispute. With the completion of certainmajor events such as the Greek general elections, Summer Olympic games, and the Macedonianpresidential election, some observers identified a potentially favorable window for a resolution tothis dispute, especially in view of the anticipated international focus on the status of Kosovo in 2005. Ambassador Nimetz expressed confidence about the mutual good will for further negotiations. On November 4, 2004 (a few days before the scheduled referendum in Macedonia ondecentralization), the U.S. State Department announced that the United States had decided to referto Macedonia officially as the Republic of Macedonia. The State Department spokesman said thedecision underscored the "U.S. commitment to a permanent, multi-ethnic, democratic Macedonianstate within its existing borders" and U.S. support for the Macedonian government's "courageousdecision to carry through with decentralization." He emphasized that the recognition decision wastaken without prejudice to the U.N. negotiation process and was not directed against any othercountry. However, the decision sparked bitter protestations from the government of Greece. Afterthe referendum, the U.S. spokesman praised the outcome and expressed the Department's belief thatU.S. recognition contributed to the Macedonian voters' choice to support the Ohrid frameworkdocument. (27) Despite the lack of a negotiated resolution, the ongoing dispute appeared to have little impacton other aspects of Greek or European policy vis-Ã -vis Macedonia since 1995. Greece is a keytrading and investment partner with Macedonia and has a growing stake in Macedonia's stability. Within the EU, Greece has acted in the past as a proponent of EU engagement in and assistance toMacedonia. During its six-month tenure holding the EU Presidency in the first half of 2003, Greecesought to add impetus to the EU's approach in the Balkans and promote EU efforts to improveBalkan security and stability. The Greek presidency's efforts culminated in the June 2003Thessaloniki summit of EU and western Balkan leaders, which issued a joint declaration onpromoting the security and eventual EU integration of the Balkan states. In the aftermath of the shiftin U.S. policy on recognition of Macedonia, however, the Greek government reiterated that amutually agreeable solution on the name dispute must be found before Greece would approve adecision in either the EU or NATO on Macedonia's accession. (28) Officials in bothinstitutions have pressed for the parties to come to a mutually acceptable solution as soon aspossible. (29) Ambassador Nimetz has continued to hold talks with Greek and Macedonian representatives. In April 2005, Nimetz confirmed that he had submitted a compromise "set of ideas" for considerationby the parties. The Nimetz proposal reportedly included a change in Macedonia's internationallyrecognized name to "Republika Makedonija-Skopje" (untranslated), as well as a set of principlesguiding cooperative relations between Greece and Macedonia. In response, Greek officials said thatthey would accept the proposal as a basis for further negotiations. Macedonian officials called theproposal "unacceptable" and rejected the notion of changing its constitutional name. They maintainthat a resolution to the dispute should follow a dual formula, or one in which an agreement withGreece on a name would apply only to bilateral relations. Both sides agreed to continue bilateraltalks and Nimetz has since held further consultations, without any breakthrough. Several additional U.S. policy priorities relate directly or indirectly to Macedonia. Forexample, Macedonia has played a small but symbolic and steady role with regard to the global waron terror and evolving situation in Iraq. Prior to the U.S.-led invasion of Iraq in March 2003, foreignministers from the ten-nation Vilnius Group of NATO candidate countries, including Macedonia,signed a joint statement supporting U.S.- led efforts to disarm Saddam Hussein. Their positioncontrasted sharply with the opposition expressed by France and Germany to military action in Iraq. In the post-war environment, the United States has sought to increase international participation inpeacekeeping efforts in Iraq. Macedonia, along with most countries in east central Europe andEurasia, agreed to send forces to the U.S.-led international coalition. A special forces unit of about30 Macedonian troops currently serves in Iraq. About 20 Macedonian troops also serve in theInternational Security Assistance Force (ISAF) in Afghanistan, commanded by NATO. U.S.officials have frequently commended Macedonia's support to the United States in the global war onterrorism, including Defense Secretary Rumsfeld during a visit to Macedonia in October 2004. Without specifying individual country preferences, U.S. officials have expressed continuedsupport for NATO's Open Door policy with regard to future candidate countries. With NATO'slatest round of enlargement in 2004, the western Balkan states are now surrounded by NATOmembers. The United States has encouraged Macedonia's participation in NATO's MembershipAction Plan, which helps candidate countries prepare for NATO membership. U.S. participation inthe Adriatic Charter initiative reflects U.S. support for efforts by Macedonia, Croatia, and Albaniato advance their integration into NATO. The United States maintains targeted sanctions against extremist individuals and groups thatthreaten peace and stability in the Balkans. Executive Order 13304 blocks the assets of 150designated persons and groups (mostly from Bosnia) and prohibits most transactions with them. (30) The list extends to manydozens of individuals identified from Macedonia and other western Balkan countries and includesthe Albanian National Army, which the Administration has labeled a criminal extremist group. TheUnited States may also impose sanctions against countries that fail to take measures to countertransnational trafficking of persons. The western Balkan region is a transit and destination point fortrafficked women and children. The State Department's 2005 report on global trafficking in personsdesignated Macedonia to be a "Tier 2" country, or one whose government does not fully comply withthe minimum standards for the elimination of trafficking. The report dropped Macedonia from Tier1 in 2004 to Tier 2 because of its "lack of progress in strengthening its anti-trafficking efforts." (31) The United States continues to provide bilateral assistance to Macedonia under the Supportfor East European Democracy (SEED) Act. Originally authorized to assist transition efforts of thecentral European countries, SEED Act assistance is now almost exclusively targeted on countriesin the western Balkan region. Macedonia was allocated about $39 million SEED Act funds inFY2004 and $34 million in FY2005. The Administration requested $39 million in SEED assistancefor FY2006. The United States also provides security assistance (FMF and IMET), anti-terrorismassistance, and a Peace Corps program to Macedonia. U.S. programs in Macedonia seek to facilitateand strengthen the reform process outlined by the Framework Agreement, and furtheringMacedonia's transition to a market-based economy, democratic consolidation, and integration intoNATO and the EU. Macedonia has nondiscriminatory trading status (NTR) with the United Statesand is eligible for Generalized System of Preferences (GSP) benefits. Another priority for the Bush Administration has been to secure bilateral agreements withcountries that are parties to the International Criminal Court (ICC) on exempting U.S. personnelfrom possible extradition to the ICC. Congress has conditioned the provision of U.S. militaryassistance to non-allied countries on such exemption agreements (dubbed "Article 98" agreementsafter a provision in the ICC's Rome Statute). The Macedonian government concluded a so-called"Article 98" exemption agreement with the United States in June 2003; as a result, President Bushwaived the prohibition on U.S. military assistance with respect to Macedonia. (32) The Administrationobligated about $8 million in Foreign Military Financing and $0.7 million in International MilitaryEducation and Training program funds for Macedonia in FY2004; and $6.5 million in FMF and$0.65 in IMET for FY2005. In contrast, the European Union, whose members strongly support theICC, has opposed the U.S. effort to secure these bilateral agreements and expressed regret aboutMacedonia's agreement with the United States. Macedonia's actions on this issue suggest to someobservers continued strong U.S. political influence over Macedonia's government. Many of the policy issues outlined above are of direct or indirect concern to Congress. Previous Congresses have generally supported, and occasionally insisted on, shifting greaterinternational responsibility for peacekeeping and reconstruction in the Balkans to the EuropeanUnion. While Members of Congress may be divided on the question of a full withdrawal of U.S.forces from Bosnia or Kosovo, the handover of the Macedonia mission from NATO to EU handsin early 2003 was seemingly uncontroversial. More controversial was the Administration's movein November 2004 to recognize Macedonia by its constitutional name. For example, SenatorSarbanes issued a statement calling the decision inopportune and counter-productive. (33) Some Members haveurged the parties to reach a mutually acceptable solution. A primary issue of regional interest in Congress is the future of Kosovo. Many Membershave gone on record in support of independence for Kosovo, and such an outcome may carrysignificant implications for neighboring Macedonia. Congress is also interested in the future ofNATO enlargement, including NATO's decisions on future candidates and the ability of candidatesstates such as Macedonia to meet NATO standards for membership and contribute meaningfully tothe alliance. Legislation. In the first session of the 108thCongress, the House passed H.Con.Res. 209 , a concurrent resolution commending thesigning of the United States-Adriatic Charter, on June 23 by a vote of 381 to 1. The Senate agreedto H.Con.Res. 209 with amendments on July 29. In February, the Senate passed S.Con.Res. 4 , commending the support of 18 European nations, including Macedonia,for Iraq's full compliance with U.N. Security Council Resolution 1441, and their expressions ofsolidarity with the United States. In the second session, the House passed a resolution( H.Res. 558 ) in March 2004 that welcomed the accession of seven countries intoNATO, called for the process of NATO enlargement to remain open, and recommended a NATOsummit to review the applications of Albania, Croatia, and Macedonia by 2007. The House andSenate passed separate resolutions ( H.Res. 540 and S.Res. 314 ) in March2004 expressing condolences for the untimely death of Macedonian President Boris Trajkovski andcommemorating his leadership. In November 2004, the House introduced H.Con.Res. 530 , which encouraged Greece and Macedonia to continue negotiations to determine a mutuallyacceptable official name for Macedonia.

Summary: In early 2001, an eight-month conflict between ethnic Albanian insurgent forces andMacedonian police and security forces threatened to derail the country's fragile stability and lead toanother extended conflict in the Balkans. Later that year, U.S. and European intervention led to thesigning of the Ohrid Framework Agreement, which outlined a package of political reforms to expandthe rights of the ethnic Albanian minority while rebel forces were disarmed and disbanded underNATO supervision. Implementation of the Ohrid agreement proceeded slowly at first but hasprogressed in recent years. Numerous challenges in 2004, including the accidental death of PresidentTrajkovski and violent inter-ethnic incidents in neighboring Kosovo, threatened to increase politicalinstability. However, an opposition-sponsored referendum on November 7, 2004, which sought tohalt plans for decentralization and local governmental reforms called for under the Ohrid accords,failed due to low turnout. Municipal elections under the new redistricting plan took place in March2005. The multi-ethnic coalition government that was elected after the 2001 conflict looks likely tocomplete its term until 2006. The United States continues to support multilateral efforts to stabilize Macedonia, but hasincreasingly looked to the European Union to play a larger international role in the Balkans, startingwith Macedonia. In March 2003, the European Union launched its first military mission inMacedonia, taking over from a small NATO presence. The EU military mission, which has alsoserved as a test case for the EU's ability to carry out its own defense policy, concluded its operationon December 15, 2003. The EU maintains a police training mission in Macedonia. Macedonia's long-term goals, shared by the United States and the international community,include full membership in NATO and the European Union. NATO has pledged to uphold its "opendoor policy" for NATO candidate countries such as Macedonia, Albania, and Croatia. Macedoniahas concluded a Stabilization and Association Agreement with the EU, applied for EU membershipin early 2004, and anticipates formally being named an EU candidate country by the end of 2005.EU and U.S. officials urged Macedonian voters to stay on track with reforms consistent with theOhrid agreement, and praised them for endorsing Euro-Atlantic integration with the widespreadboycott of the November 7 referendum. On the eve of the referendum, the United States announcedits decision to recognize Macedonia by its constitutional name, the Republic of Macedonia, ratherthan its interim name, The Former Yugoslav Republic of Macedonia, as an expression of supportto a multi-ethnic and democratic state. Its name, however, remains in dispute with neighboringGreece, and U.N.-sponsored talks to resolve the dispute are ongoing. Related reports include CRS Report RL31053 , Kosovo and U.S. Policy , and CRS Report RL32136 , Future of the Balkans and U.S. Policy Concerns . This report may be updated as eventswarrant.