North Macedonia. Is there a life without membership negotiations?

After the Bulgarian veto over the North Macedonian negotiations with the EU, Skopje still has some options. Pursuing integration via the SAA will not be affected by eventual fall of the SDSM led ruling coalition and return of conservative and somewhat disgraced VMRO-DPMNE. What could compromised the EU integration of North Macedonia is fatigue and disappointment caused by the EU enlargement, in which the rules keep changing to the disadvantage of the minor players.

The EU enlargement and European integration in general is a process, not a matter of single act. And this process already lasts - in case of North Macedonia since April 2001, when the Stabilization and Association Agreement was signed, and which entered into force on 1 April 2004, after ratification by all signatory countries.

Formal application for membership in the EU was submitted in March 2004, and in December 2005 the country received candidate status. In October 2009, the European Commission made the first recommendation to start negotiations between the North Macedonia and the EU, but the EU Council did not give the green light for negotiations. After 2009, the process stalled due to a political dispute with Greece over the name of the Macedonian republic. After the signing and entry into force of the Prespa Agreement in 2019, which has solved the “name” problem, it was expected that things would move forward. We all know the story, which followed. And, while there is a hope that after the election in Bulgaria, the government in Sofia might ease its stance, there is high probability that similar, “historical” arguments will be used in the future.


EU integration – a necessity?

Looking at the informal side of the EU-Macedonian relations, the integration reaches much deeper. The EU remains clearly the most important partner of North Macedonia. According to WTO, in 2018, the European Union's share in North Macedonia's exports of goods was 82.0% and its share in North Macedonia's imports of goods was 62.4%. 6. FDI net inflows rose from approximately EUR 131.0 million in 2012 (1.5% of GDP) to EUR 621.9 million in 2018 (5.8% of GDP). The European Union accounted for 76.7% of the FDI inward stock in 2017. Nearly half of the FDI inward stock (45.2% in 2017) is in the services sector. The share of the manufacturing sector in the FDI inward stock reached 36.8% in 2018, which reflects a substantial increase in the share of vehicles and other transport equipment. Looking at this numbers leaves no doubt about the degree of integration of the Macedonian economy with the EU market. Croatia, which applies to join the eurozone in 2023 experiences comparative level of trade integration.

And while North Macedonia will exists without the EU membership status, it cannot survive without the EU and its market. With its weak economy, underdeveloped and obscure industry, lost goods receiving markets and low purchasing capacity of its consumers, North Macedonia cannot follow the Norwegian or Turkey’s way. On the other hand, any closer political and economic ties with Turkey, Russia or even China do not present realistic alternative solution. The EU is what North Macedonia have on the table.

Below we present three possible options - consequences of the Bulgarian veto.


Change of the government

The political scene in North Macedonia is very fragile. Last elections have been “won” by the SDSM by merely 12 thousands of votes and overall support of 35.89 per cent of voters, while its archenemy - VMRO DPMNE received support at the level of 34.57 per cent. Although the EU integration receives general support in North Macedonia, the emotionally loaded question of national identity, which at the moment dominates Bulgarian-Macedonian relations are much likely to cause general discontent among the voters.

Despite the nationalist and populist rhetoric, the VMRO DPMNE elites are aware of lack of any alternative solutions to the European integration of North Macedonia. Possible victory of conservative VMRO DPMNE would not reverse the pro-European course of the previous governments. Election of the conservative led government will however result in one important aspect of the European integration – its international position would be much weaker at the negotiation table than this one, led by Zoran Zaev. Current prime minister enjoys general sympathy in the EU capitals, for his major achievements – appeasement of the Albanian political aspirations, solving the question of the republic’s name, and ultimately, although not finally, signing the treaty on good neighbourhood relations with Bulgaria. New VMRO-DPMNE prime minister will not have it. Instead he or she will have much harder negotiating position vis a vis its Bulgarian counterpart and difficulties in convincing other EU capitals about its European commitment.


Continuation of integration via SAA 2

While the formal membership negotiations process have been stopped for now by Bulgaria, North Macedonia’s road towards the EU is still open. The integration with the EU structures and market, the political and economic cooperation could develop within the framework of the Association and Stabilisation Agreement. Silvana Mojsovska from Institute of Economics – Skopje, has advocated for this option recently. Thanks to SAA, liberalization of the movement of goods was ensured (quotas and other restrictions apply to a small number of products), and there have been some achievements in the areas of flow of services, capital and labour.

What Mojosvoska suggests is further implementation of the SAA provisions. For example, while North Macedonia has introduced the principle of national treatment to the companies from the EU, while the Macedonian companies within the EU might encounter certain additional problems, when registering or acting on the EU market. Another opportunity offered by the SAA is protection of vulnerable Macedonian industries from more competitive EU companies. Given the unequal position of the economies on both sides, this option can be used only by Northern Macedonia. A closer look is also required in the area of free movement of services and capital. For example, free opening of bank accounts abroad by Macedonian citizens with permanent residence in Northern Macedonia is still not allowed.

„SAA is the mechanism for moving the process of European integration in the current circumstances. Of course, in parallel, work should be done to remove the inertia regarding the internal reforms in the country. Reforms are inextricably linked to policy-making, and only good and continuous policies can deliver the desired results and make better use of the SAA”, concludes Mojsovska. Integration of North Macedonia with the EU can progress in some key aspects without the membership negotiations. Why not to try.


Is there enough oxygen to breath?

Lack of unity regarding the EU enlargement plans, reflected in the Bulgarian veto sends (another) negative signal about the intentions of the EU leaders. It will surely further undermine trust towards the pro-European Zaev and the EU in general. The SAA has been signed 20 years ago for ten years only. It has been prolonged once, and still, after overcoming the Greek veto, Macedonia did not move any closer towards membership. It is discouraging. Especially, when taken into account fact that North Macedonia is a small country and opening negotiations is only a beginning of long and troublesome process.

Would there be enough energy within the Macedonian society to support the great European idea? Many of them have already left the country, and have found employment in the EU. Even more is planning to leave North Macedonia. Their European dream has partially come true, and partially has dispersed. The same concerns elites. Let us not forget that Milorad Dodik has been a pro-European politician, and a member of anti-war opposition in Republika Srpska of BiH. If populism and nationalism will provide significantly more votes than distanced perspectives of European integration, then why not to use it for political mobilisation?

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