Brussels, 10 May 2024 (MIA) - The European Commission provided €50 million in loans to North Macedonia this week, which is the first tranche of the ongoing Macro-Financial Assistance (MFA) operation to the country, MIA reports from Brussels.

The assistance provides further support to North Macedonia, whose economy has been severely hit by the recent energy crisis, which was triggered by Russia's full-scale invasion of Ukraine, said the Commission on Friday.

"It will support macro-economic stability and provide for further reforms, in conjunction with the ongoing International Monetary Fund (IMF) programme for North Macedonia. It will also help North Macedonia advance on its European path, said the press release. 

The release of this support comes after the Commission found that North Macedonia had fulfilled the relevant policy commitments agreed with the EU for the release of the first tranche.

North Macedonia achieved progress in the area of public finance by setting up an independent Fiscal Council and by strengthening public investment management. To enhance public revenue, North Macedonia adopted tax policy measures which broaden the tax base. The government has also made further progress towards formalising the informal economy, and it has taken measures to improve energy efficiency. Lastly, the government strengthened the judiciary with a new Strategy on Judicial Reform," it was noted.

The overall ongoing Macro-Financial Assistance operation to North Macedonia is worth up to €100 million in loans. After the disbursement of this first tranche of €50 million, a second tranche of the same amount remains available, depending on progress on the agreed policy conditions. 

MFA is part of the EU's wider engagement with neighbouring countries and is intended as an exceptional EU crisis response instrument. It is available to enlargement and EU neighbourhood countries experiencing severe balance-of-payments problems. 

The EU Commission proposal for this MFA operation to North Macedonia was adopted by the European Parliament and the Council on 12 July 2023. Its implementation is further complemented by EU bilateral cooperation under the Neighbourhood, Development and International Cooperation Instrument-Global Europe. Overall, since 2020, the EU has paid around €210 million in MFA support for North Macedonia. This includes today's payment of €50 million.

Photo: MIA archive