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European Western Balkans
European Integration

Key findings of the 2021 European Commission Report on North Macedonia

Flag of North Macedonia; Photo: Unsplash

BRUSSELS – European Commission has published the 2021 country reports for the six Western Balkans states and Turkey. Here we present the key findings in the country report on North Macedonia.

The fundamentals of the accession process

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

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

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

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

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

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

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

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

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

The legal framework on the protection of fundamental rights is largely in line with European standards. The Law on the Prevention and Protection against Discrimination and the Commission for the Prevention and Protection against Discrimination are in place. The deinstitutionalisation process made real progress and almost all of the children concerned were resettled to community-based care. The Ministry of Labour and Social Policy is investing in community services, including supporting victims of gender-based violence. Important progress was achieved with the adoption of the Law on Prevention and Protection from Violence against Women and Domestic Violence, with cross-party support. An improvement is noted in terms of gender mainstreaming and women’s rights, although women are among the categories most severely affected by the pandemic. Recommendations of European and international human rights bodies, particularly regarding the treatment of detained and convicted persons must be fully implemented without delay. It is also important for the country to enhance the implementation of the legislation on hate speech and of the national action plan for the implementation of the Istanbul Convention’s provisions. The civilian external oversight mechanism over the police is not fully functional, and the absence of genuinely independent investigators impedes efforts to address police impunity and effective prosecution. The country should continue to improve the situation in prisons and to further increase alternatives to detention.

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

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

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

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

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

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

On Cluster 4 on the Green Agenda and sustainable connectivity, North Macedonia has a good level of preparation in trans-European networks. It is moderately prepared on transport policy and energy and as some level of preparation on environment and climate change. North Macedonia is actively participating in meetings of the Transport Community and Energy Community. It has a high level of compliance with the Energy Community Treaty, notably on electricity. As all Western Balkans, North Macedonia endorsed the Green Agenda for the Western Balkans at the Sofia Summit in December 2020. This year, some progress was made in the energy sector, notably with the progress made towards the adoption of the National Energy and Climate Plan. However, limited progress were made in transport, environment and climate change. The country needs to substantially step-up its ambition to properly implement the acquis of chapters 14 and 27. These efforts will increase the efficiency of the Economic and Investment Plan and speed up the implementation of the Green Agenda for the Western Balkans. Administrative capacities need to be strengthened in all sectors. In addition, strategies, action plans and legislation in these sectors need to be coherent with the principles and priorities of the Green Agenda and to ensure consistency between relevant sectoral documents.

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

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

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

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