|Author (Corporate)||Council of the European Union, European Parliament|
|Series Title||Official Journal of the European Union|
|Series Details||L 180, Pages 1-7|
|Content Type||Legislation, Policy-making|
Legislative initiative - tabled by the European Commission on 6 February 2023 - establishing a new emergency Macro-Financial Assistance (MFA) programme for North Macedonia of up to €100 million.
The economy of North Macedonia was on track to recover from the COVID-19 (coronavirus) pandemic, but 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 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.
Against the backdrop of tighter global financial conditions, higher energy prices and high-than-expected losses by the domestic stated-owned electricity producer, North Macedonian authorities renewed their request for a Macro-Financial Assistance (MFA) in October 2022. The European Commission had put an initial request, submitted in 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. But given the uncertainties regarding the availability and costs of external market financing, a proposal for an MFA loan of up to €100 million was adopted by the Commission on 6 February 2023.
The proposed programme seeks to support the country covering part of its residual external financing needs in 2023. 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 a programme set out by the International Monetary Fund (IMF).
The draft Decision was adopted by the European Commission on 6 February 2023. It was endorsed by the plenary of the European Parliament on 13 June and by the Council of the European Union on 10 July. The Act was signed by the co-legislators on 12 July 2023 and published in the Official Journal on 17 July 2023.
|Subject Categories||Economic and Financial Affairs|
|Subject Tags||Economic Governance | Situation, European Neighbourhood Policy [ENP]|
|Keywords||Macro-Financial Assistance [MFA]
|Countries / Regions||North Macedonia|
|International Organisations||European Union [EU]|