The small Balkan country of Macedonia has made solid economic progress in the last few years and appears to be an ideal candidate for accession to the EU. But a corruption scandal, as well as an ongoing name dispute with Greece, is threatening to derail its development.
The Former Yugoslav Republic of Macedonia has been beset by scandal since the early part of this year. Protests against the ruling VMRO DPMNE party, led by Prime Minister Nikola Gruevski, reached fever pitch in May after it emerged that the government had used broad-ranging wiretaps that included surveillance of “officials in the public administration, prosecutors, judges and political opponents.”
The European Union has monitored the situation closely, desperately trying to prevent violence in the delicately positioned country. After negotiations in Strasbourg between Gruevski and opposition leader Zoran Zaev, it was agreed that early elections would take place in April 2016.
Since that agreement, trouble continues to brew in Macedonia. It has been part of the migrant route that has thrown the Balkans into chaos over the summer, and there has been continuous wrangling between the main parties. All this casts a shadow over the solid economic progress the country has made in its years of independence.
Economic changes
The carrot of EU membership has encouraged reform in Macedonia. The country – which has a sizeable Albanian minority – virtually managed to escape the ethnic conflicts that have plagued the rest of former Yugoslavia.
However, as a result of Albanians fleeing the Kosovo War violence threatened to erupt in 2001, which led to the EU and NATO-sponsored ‘Ohrid Agreement’. Since then the country has worked hard at economic reform, surprisingly being ranked 12th in the 2016 Ease of Doing Business list, and has achieved respectable growth compared to others in the region.
Source: World Bank real GDP growth and two year forecast
Index of Economic Freedom, Macedonia, Serbia, Greece. Source: Heritage Foundation
What’s in a name?
Looking at these statistics, Macedonia appears to be an ideal candidate for accession to the EU, particularly as it does not have to broach thorny issues of war crimes that have proved obstacles to Croatia and Serbia. Unlike Bosnia and Hercegovina, Macedonia is also a unitary state.
The major stumbling block for Macedonia, however, is its name. Greece has consistently blocked the country’s progress towards both NATO and the EU because it views the use of ‘Macedonia’ as an affront. The northern region of Greece is known by the same name, implying a territorial threat, and many Greeks do not accept the country to the north as a nation-state.
Thessaloniki’s otherwise progressive mayor, Yiannis Boutaris, bristles at the idea, claiming that “all this was created by Tito” and that Macedonians are really Bulgarians. As a result, an awkward compromise was reached in the 1990s to call the country the Former Yugoslav Republic of Macedonia (or FYROM). The ongoing stalemate is a real, and some would say bizarre, block on the country’s development.
Tighter supervision from Brussels
EU leaders have made little headway on the name issue, but since the wiretap crisis threatened to overheat, Brussels has taken a much closer interest in Macedonia. After overseeing the agreement that paved the way for next April’s elections it has guided the government towards a number of political reforms.
Most recently this has included a new law to stop the ruling party using state media as a lever of power and allowing for more open elections. As a deadline loomed last week, the EU mediator and former Belgian Prime Minister Peter Vanhoutte urged the separate parties to reach an agreement on the matter.
Meanwhile, European Commission officials recently aired their disquiet over increased government borrowing and levels of debt. Skopje will also not endear itself to Brussels by being the latest Balkan country to propose a border fence to keep out migrants.
In general, Macedonia rarely features in Western European media, and little is known of the country of only two million. It is clear, however, that the EU – as well as the United States – sees it as strategically important and as another country where the West fears Russian influence.
As always, there are energy interests involved and Macedonia is part of the planned AMBO oil pipeline that would link the Black Sea to the Adriatic, as well as Gazprom’s proposed extension of the Turkish Stream gas pipeline.
But despite all its problems, Macedonia is tantalisingly close to becoming a full member of the European project, and in the near future it should be able to attract its funds, business, and investment. Whether it can do so depends on if Macedonia can navigate its current political crisis quickly, and if a broader compromise over its name can be reached with Greece.
