The EU's relations with the former Yugoslav Republic of Macedonia

The European contribution

1. Milestones in the relations between the EU & the former Yugoslav Republic of Macedonia

2. Main objectives of European Union assistance

3. Main areas of ongoing support
   What is the European Union doing to help the former Yugoslav Republic of Macedonia?

4. Orientations for future assistance

5. Facts and Figures

The former Yugoslav Republic of Macedonia was the first country of the region to sign a Stabilisation and Association Agreement (SAA) in April 2001. As a signatory the country will gradually take on board the core obligations of membership, start aligning its legal and economic framework with that of the EU, strengthen co-operation with its neighbours and co-operate with the EU on a number of issues. An Interim Agreement covering the trade and trade-related aspects of the SAA is in force since June 2001 and provides near-total free access to the EU-market.

Between February and August 2001 the country underwent a serious political and security crisis solved through the signature by the country’s political leaders of a so called Framework Agreement (FA) strengthening the civic character of the state and expanding the right of ethnic minorities.

In the last year the former Yugoslav Republic of Macedonia has made clear progress on the road to stabilisation and closer association with the European Union. Its relations with the EU will be increasingly focused on the administrative and legislative reforms necessary for the full implementation of the SAA.

• 1996: The former Yugoslav Republic of Macedonia becomes eligible for funding under the EU Phare programme.

• 1997: Regional Approach. The EU Council of Ministers establishes political and economic conditionality for the development of bilateral relations.

• January 1998:

• Co-operation agreement* and Agreement in the field of Transport enter into force.

• Opening of the Office of the Resident Envoy in Skopje.

• 1999: The EU proposes a new Stabilisation and Association Process (SAP) for five countries of south-eastern Europe. On 16 June 1999, the conclusion of a feasibility study to open negotiations with the former Yugoslav Republic of Macedonia is positive.

• 24 Jan. 2000: The Council adopts negotiating directives for a Stabilisation and Association Agreement.

• March 2000:

• Upgrading of the EC Representation in Skopje to a permanent Delegation of the European Commission.

• Start of negotiations between the EU and the former Yugoslav Republic of Macedonia to conclude a Stabilisation and Association Agreement.

• June 2000: The European Council meeting at Santa Maria de Feira (Portugal) confirms that its objective remains the fullest possible integration of the countries of the region into the political and economic mainstream of Europe and affirms that "all the countries concerned are potential candidates for EU membership".

• 9 April 2001: Following the successful conclusion of the negotiations at the Zagreb Summit of 24 November 2000, a Stabilisation and Association Agreement is signed in Luxembourg.
  An Interim Agreement is also signed on the same day; with the IA the Parties allow the trade and trade-related matters of the SAA to enter into force on 1 June 2001.

• June 2001: Office of the European Union Special Representative opens in Skopje.

• April 2002: European Commission publishes the first Stabilisation and Association Report.

• March 2003: European Commission publishes second Stabilisation and Association Report.

• April 2003: Mission «Concordia», the first ever EU military mission starts operations with a six-month mandate.

* Under the Co-operation Agreement, the former Yugoslav Republic of Macedonia benefits from asymmetric trade preferences with the EU

• The EU aims to support the achievements to date in the field of democracy by strengthening the institutional and administrative capacity of the state and of the actors of the civil society.

• The EU aims to assist the government at central and local level to facilitate the process of economic and social transformation towards a market economy.

• The EU aims to bring the former Yugoslav Republic of Macedonia closer to EU standards and principles, and to assist the country in the framework of the Stabilisation and Association Process.

• The EU aims to support the country in its efforts to give full implementation to the Framework Agreement.

Between 1992 and 2000 the former Yugoslav Republic of Macedonia received some € 475 million of EC assistance.

The European Commission, through the CARDS Programme, has allocated to the former Yugoslav Republic of Macedonia a budget of € 173 million for the period 2001-2004, to support the country’s efforts towards European Integration. 

The former Yugoslav Republic of Macedonia is also a beneficiary of the CARDS Regional Programme (with a financial perspective 2002-2004 of €80 million), the European Initiative for Democracy and Human Rights, Life Third Countries, Youth Programme – Third Countries Co-operation and a number of other specialised EU programmes.

The implementation of European Community assistance is managed by the European Agency for Reconstruction whose mandate was extended to the former Yugoslav Republic of Macedonia with effect from 1 January 2002 for the emergency assistance provided in 2001and from 1 March 2002 with
 respect to the implementation of past and future projects/programmes. The management of CARDS funds allocated to the Customs sector, to the TEMPUS programme as well as those allocated through the CARDS Regional Programmes has remained centralised at the Commission Headquarters. Centralised implementation also applies to any funds allocated through the EIDHR budget line.

The EU provides around € 1.5 million worth of assistance to ensure a successful performance of the 2002 Population Census. The objective is to provide an impartial assessment on the performance of the Census and contribute to build confidence in the process across all ethnic groups populating the country.

It also provides support to foster inter-ethnic relations through assistance to civil society and in particular to the NGOs sector.

The overall objective of EU assistance is to contribute to strengthening the country's judicial system and helping it improve internal and regional security through the development of an Integrated Border Management strategy and the improvement of its capability to fight organised crime. A total of over € 42 million are earmarked under the CARDS programme for this sector during the period 2001-2004.

EU assistance is designed to help the country improving its exports, align its legislation with the Community access and improve quality standards and controls. A total of € 13 million are earmarked for the purpose for the period 2001-2004.

The EU supports the former Yugoslav Republic of Macedonia in its efforts to make the economic and commercial legislation compatible with that of the EU through technical assistance to draft new laws.

The EU has recently injected a further €5.6 million in to a credit-line it helped establish in 1998 to support micro, small and medium-sized enterprises in the former Yugoslav Republic of Macedonia. During its first five years, the credit line has financed over 600 loans and created an estimated 2500 jobs.

The Micro-Credit Line is a "revolving fund", which means loan repayments are immediately made available as new loans. The objective of the scheme is to increase the number of "start-up" enterprises, to support the transition of micro-enterprises into small businesses, and to reduce the bankruptcy rate of SMEs. The project will also encourage the development of export-oriented and technology-based production enterprises.

The EU contributed to the construction of the South East Europe University (SEEU) in Tetovo, the first official university institute providing tuition in the Albanian language (as well as Macedonian and English).

The former Yugoslav Republic of Macedonia takes an active part in the EU inter-university exchange programme TEMPUS. Joint European projects are implemented with EU universities and individual mobility grants for students and professors are currently underway.

Advice and assistance to the Ministry of Education is given in order to establish a school curriculum which is better adapted to the needs of the labour market (Vocational Education and Training -VET).

The EU aims to assist the Minister of Labour and Social Policy to develop social welfare policies in line with EU best practice.

The main objective of this EU assistance programme worth € 2 million is to strengthen the capacity of the Ministry of Local Self-government to manage the process of decentralisation, and to enhance the dialogue between the different levels of government: central and local.

Further € 34 million are earmarked under CARDS for the period 2001-2004 for the implementation of small infrastructure development projects throughout the country. The programme although focusing on small infrastructure development is two-pronged as it aims at:

(i) supporting investment projects promoted by local municipalities to improve infrastructure facilities, and

(ii) providing technical assistance to favour both the development of infrastructure projects and to support the establishment of an effective decentralisation policy.

29 projects have already been selected and address four target areas: (i) water supply; (ii) sewage; (iii) roads development; (iv) public buildings.

The EU helps the relevant Ministries in the development of national strategies for waste water and solid waste. Support is given to the Ministry of Environment to manage and enforce national environmental policy.

Two key transport corridors cross the country and intersect at Skopje. They form part of the EU-wide "Trans-European Networks" (TENs), and are known as Corridor 8 ( E-65 East-West: Durres - Tirana - Skopje - Sofia - Varna) and Corridor 10 (E-75 South-East-North: Thessaloniki - Skopje - Belgrade - Zagreb - Passau or Munich). Improvements to these roads are funded as part of an overall programme for upgrading transport infrastructure. The EU supports this through different sources: through grants from the national programme for the former Yugoslav Republic of Macedonia and the cross-border co-operation programme with Greece, and with loans through the European Investment Bank (EIB).

In 2001 the European Commission adopted an emergency package of assistance worth € 26.5 million in order to help the country face the consequences of the political and security crisis of February-August. Funds were drawn both from the CARDS Programme (€ 13.7 m.) and the Rapid Reaction Mechanism (€ 12.8 m.). Projects financed under the programme include the reconstruction of more than 1200 conflict-damaged houses, the rehabilitation of electric lines, improvement of water supplies, de-mining operations, assistance to families hosting IDPs and measures designed to enhancing inter-ethnic confidence. The Emergency Assistance Programme has provided a major contribution to getting 95% of the Internally Displaced Persons to return to their pre-crisis dwellings.

In the future, assistance will be directed at promoting the country’s capacity to give full implementation to the Stabilisation and Association Agreement and to progressively harmonise its legislation with the Community acquis. It will also aim to support the country to implement the Framework Agreement.

5. Facts and Figures

1991-2001 EC assistance to the former Yugoslav Republic of Macedonia - Allocations in millions of € 

 ^* Allocations include the running costs of the European Agency for Reconstruction (€ 5 m for 2002 and € 5 m for 2003).