% of GDP
International recognition of The Former Yugoslav Republic of Macedonia's (FYROM) independence from Yugoslavia in 1991 was delayed by Greece's objection to the new state's use of what it considered a Hellenic name and symbols. Greece finally lifted its trade blockade in 1995, and the two countries agreed to normalize relations, despite continued disagreement over FYROM's use of "Macedonia." FYROM's large Albanian minority and the de facto independence of neighbouring Kosovo continue to be sources of ethnic tension.
Update No: 075 (28/07/03)
Peace far from secure
The events of 9:11 seemed soon afterwards to secure a new truce and then peace for Macedonia. Albanian secessionist groups agreed to lay down their arms and join up in a new coalition government. As always, however, there were hardliners who felt betrayed and denounced those agreeing to participate in existing structures of governance.
The struggle has been taken up by an umbrella organisation, the Albanian National Army (AKSH), aiming to unite the remnants of secessionist forces in Kosovo as well as Macedonia. Its ultimate goal is a Greater Albania, including Albania itself, Western Macedonia, Kosovo, areas of South Serbia and even parts of Montenegro and Greece.
An impossible project to be sure because it is opposed by not just the Macedonian government but also the Albanian one, which is acting in close cooperation with it on security matters. Naturally Belgrade and Athens have no time for it either.
In June came two terrorist attacks in Skopje, which hit buildings and cars, but fortunately killed no-one. AKSH is under suspicion.
Before NATO intervention in Kosovo in 1999 this sort of thing was routine. The bulk of Albanians now see NATO as saviours and oppose these methods. They cooperate with the 400 European Union peacekeepers. Indeed, they support the twin long-run goals for Macedonia of NATO and EU membership.
Ethnic secessionists in Macedonia, where 30% of the population is Albanian, have discredited themselves by being involved with organised crime, those engaged in drug-running, human trafficking and arms smuggling. President Boris Trajkovska realised that the criminal activities of the secessionists are their Achilles' heel, despite also being their bread-line. For a concerted campaign against them is now justified especially after the assassination of Zoran Djindjic, clearly the work of mafiosi elements in Serbia.
Albania collars the leadership of AKSH
In early July Albanian police arrested four key members of AKSH, including its political leader, Gafur Adili. Say Macedonian police sources: "We were informed that four members of AKSH's leadership including Gafur Adili were arrested in the Albanian town of Podgradee. They were later transferred to Tirana prison." Adili, which is considered the code name of Valdet Vardari, and three other high-ranking leaders were arrested as they "sneaked to Albania from Macedonia in order to hold a meeting on the group's future actions."
The group was arrested for "promoting nationalistic hatred" between Albanians and Slavic-Macedonians.
Civil war averted
The Macedonians have averted civil war to the relief of everyone in the region, bar a few fanatics in Kosovo. They may belong to the Kosovo Liberation Army (KLA) of the Albanians, but have no support from the Tirana government. A Greater Albania is not a welcome idea to the Albanians in Albania, nor yet in Macedonia.
Finance minister optimistic about outcome of IMF review of Macedonian programme
The International Monetary Fund's [IMF] mission to assess the progress in implementing the obligations stemming from the standby arrangement is to start on 23rd July. Finance Minister Petar Gosev has expressed optimism about the talks. He had been criticized over the budget deficit and the downsizing of the public administration, Macedonian Radio has reported.
The radio interviewer asked Mr Gosev if the planned budget revenues have been achieved; and if this is not the case with budget expenditures. Is it possible that the IMF representatives will seek a decrease in the projected budget deficit and what are the implications of this?
Petar Gosev replied: "I don't think that we want to see this happen, for macroeconomic reasons. From the perspective of macroeconomic balance it would not be good to achieve the entire projected deficit in say, the last quarter of the year, because this would promote inflation and result in a decrease of foreign currency reserves."
He was then asked: "Does this mean that in consequence, a decrease in the
projected deficit will be noted?"
Gosev said in reply: "I cannot say at this point. I would not like to see this happen
now, whereby our expenditures would be cut further. I believe that our fiscal policy is restrictive enough. We will discuss how this can be ironed out by the end of the year within the framework of the planned platform, without a negative impact on interest rates, foreign currency reserves and inflation."
The interviewer then stated: "This is to say that according to your assessments, what has been done so far will give us a go-ahead for the next instalment."
Gosev agreed: "Yes, because our general course is towards carrying out the agreed-upon policies."
Macedonia adopts foreign exchange operations, National Bank laws amendments
The parliament adopted on 22nd July several laws referring to the banks and their work, MIA News Agency reported.
The MPs supported the changes and supplements to the Law on Foreign Exchange Operations, which give an opportunity to the banks for approving credits under the conditions determined by the National Bank of Macedonia.
Furthermore, besides the banks, the Deposit Insurance Fund, insurance companies, pension and investment funds can buy securities in foreign countries during the first phase of implementation of the Stabilization and Association Agreement. This would be an incentive for establishing domestic investment funds.
During the discussion, Finance Minister Petar Gosev said that the changes ought to be adopted because certain weaknesses have been registered in the existing law.
The parliament also adopted the changes and supplements to the Law on National Bank of Republic of Macedonia.
Finance Minister Gosev said that the changes were aimed at increasing the independence and autonomy of the National Bank as well as the professionalism, responsibility and transparency of its work.
With the changes the governor, and not the president, will propose the vice-governors, because they are his associates.
Supporting the proposed changes, Emilija Kostadinova from SDSM [Social Democratic Alliance of Macedonia] said that with the changes the basic principles and regulations were harmonized with those of the central banks in EU member countries and EU aspirant countries.
The deputies approved the changes and supplements to the Law on Banks, according to which the buyers of bank's shares must seek an approval from the National Bank, if they are buying more than five per cent of bank's shares.
With the existing law, approval was required only if the buyers wanted more than 10 per cent of bank's shares.
Gosev said that these changes were necessary in order to prevent the suspicious regrouping of bank's capital as well as to define the persons that have credibility to buy shares.
If a person buys shares without the approval of the National Bank, criminal charges will be pressed and he can face an imprisonment.
During the discussion, the MPs supported the changes as they eliminate the weaknesses of the existing law and are coordinated with EU legislation.
FOREIGN ECONOMIC RELATIONS
Macedonia, Turkey need to improve economic
In a recent statement, Macedonian President Boris Trajkovski said, among other things, that the visit by the Turkish president reaffirms the positive and friendly trends in the relations between the two countries, Macedonian Radio has reported.
Trajkovski said: "Unfortunately, we assessed that, unlike the good bilateral political relations, the economic ones are lagging behind and do not correspond to the existing facilities and capacities at the two countries' disposal. We placed special emphasis on the existing free trade agreement. We believe that it is indispensable that the latter be reviewed with a view to ensuring that it is implemented in a more efficient and successful manner and with a view to improving the economic factors."
Highlighting the important support that the Republic of Turkey has been giving to Macedonia since the latter gained its independence and sovereignty, Trajkovski pointed to the need for continued support from Turkey.
In his statement, Ahmet Necdet Sezer, the tenth president of modern Turkey, said that his country places special emphasis on developing relations with the Republic of Macedonia, which has a strategic position in the region, is a respected member of the international community and is a country in which a number of ethnic communities live
Sezer said: "As two countries with the same geography, Turkey and Macedonia share the same historical and cultural values. Ever since Macedonia gained its independence, the relations between the two countries have been based on sound foundations and have reached a high level. Also, we are glad to see Macedonia making great efforts towards maintaining stability and security, creating a stronger groundwork for interethnic relations, and integrating into the Euro-Atlantic institutions. We will therefore continue to grant our full support to Macedonia. We also exchanged views about bilateral and multilateral issues in the interest of both countries. In this context, we agreed to develop economic and trade relations and review the free trade agreement."
Macedonian official welcomes EU's 38.5m-euro grant
Macedonian Radio has reported that the European Union granted Macedonia a total of 38.5 million Euros on 23rd July within the framework of the CARDS [Community Assistance for Reconstruction, Development and Stabilization] programme.
Elizabeta Paunovska reported for the radio: Having so far granted over 800 million euros to the Republic of Macedonia, the European Union is our single greatest donor. In the hope that it will join the union in future, Macedonia expects this aid and partnership to develop, Radmila Sekerinska, deputy prime minister and national coordinator for foreign aid, said today on the ceremony of exchanging letters for the signed financial deal within the CARDS programme.
According to Sekerinska, this year's CARDS programme incorporates four separate project supplements, produced on the basis of the four priority realms that emerged from the 2002-2004 indicative programme. Under this programme, 20 million Euros are allocated for economic and social growth, 12.5 million Euros for the judiciary and internal affairs sector, 3 million Euros each for democracy and rule of law and for the Tempus programme, and 1 million Euros for environmental protection and natural resources.
Discussing the contents of this year's CARDS programme, Ambassador Donato Chiarini, head of the European Commission's delegation to Macedonia, has stressed that this type of cooperation is important and challenging
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