The 19^th Subcommittee meeting on Economic and Financial Issues and Statistics between EU and the Republic of North Macedonia took place on 6 October. The meeting was co-chaired for North Macedonia by Mr Andrija Aleksoski Assistant Head for EU and International Financial Relations, Ministry of Finance, and by Mr Uwe Stamm, Head of Unit in the Directorate General Economic and Financial Affairs of the European Commission.

The subcommittee took stock of the most important economic developments and reforms over the past year. To start with, the Commission congratulated North Macedonia on the opening of accession negotiations and is committed to advance the accession negotiations process, including through the bilateral screening of the economic criteria in early December. Negotiations on the fundamentals (of which the economic criteria are part of) will determine the overall pace of negotiations. It is vital to keep up the reform momentum, including a good implementation rate of the policy guidance agreed in the Economic and Financial Dialogue.

The EU and North Macedonia discussed common challenges, in particular the economic impact of Russia’s war in Ukraine, with its consequences in terms of energy crisis and rising inflation. In terms of economic (including fiscal) policy, while welcoming the adoption of the long delayed organic budget law, the Commission stressed the need to swiftly adopt secondary legislation, establish the new Fiscal Council and to ensure functioning of the IFMIS (integrated financial management information system). Medium term fiscal targets should be consistent with the fiscal rules of this law. Regarding crisis-related fiscal measures, support to vulnerable households and companies will need to be targeted and temporary. North Macedonia is committed to improve public investment management, including by setting up a related unit in the Ministry of Finance and by adopting the new public private partnership law. North Macedonia explained steps towards effectively implementing the Tax System Reform Strategy. In the area of labour market, the country briefed upon measures aimed at formalising the informal economy and at addressing the negative effects of emigration of the workforce. To preserve price stability in the medium term, North Macedonia stands ready to further tighten monetary policy, if necessary. The Commission recalled the importance of implementing measures to increase the competitiveness of domestic companies and to continue effective implementation of the action plan for the development of a Common Regional Market.

On statistics, the Commission commended the good progress made, in particular in successfully conducting the population census, and encouraged further progress to adhere to the excessive deficit procedure methodology, to ensure that the results of the census are used properly in decision making and the state statistical office is urgently adequately staffed.

Finally, the Commission recommended to efficiently adopt and implement the new law on public internal financial control as well as the state audit office law aimed at improving parliamentary scrutiny of budget implementation.