Select Committee on Foreign Affairs Third Report

7 Macedonia

220. Unlike the neighbouring republics, Macedonia has not descended into civil war since its independence from Yugoslavia in 1991, although it came perilously close to widespread conflict in 2001 prevented by a peace deal brokered at Ohrid. The successful implementation of the Ohrid Agreement so far—notwithstanding recent efforts to derail the accord—means that Macedonia's priorities have now come to focus on issues such as reforming the judiciary, advancing towards the EU and NATO, and economic development rather than conflict resolution.

The Ohrid Agreement

221. A spate of ethnic conflict shook the Macedonian state in 2001 following the war in Kosovo, but the international community managed to broker an end to hostilities, and Macedonian and Albanian leaders signed an accord at Ohrid in August 2001. The main elements of the Ohrid Framework Agreement are:

222. NATO and the EU played an important role in the implementation of the Agreement, NATO by monitoring the contended border areas and the EU by establishing a police mission in Skopje, the capital. The Agreement's implementation, although controversial, proceeded under the guidance of one of its key architects, Macedonia's President Boris Trajkovski. However, President Trajkovski died in an airplane crash in February 2004, precipitating a presidential election in Macedonia. The election passed off without instability.

223. The most complex and almost the final aspect of the Ohrid Agreement was the question of laws on decentralised government in Macedonia which had important implications for relations between Macedonians and ethnic Albanians. The legislation has three main aspects: territorial division, the funding of municipalities and the status of the capital Skopje. The laws would reduce the number of municipalities in Macedonia from 123 to 80, and by 2008 to 76. The new municipalities have responsibility for culture, primary and secondary education, health, urban planning and local policing. Nine are within Skopje, and the capital also has an overall council. The laws also provide for a second official language where ethnic Albanians (or another minority, such as Turks, Roma or Serbs) constitute more than 20% of the population; Albanian has become an official language in 25 of the 80 proposed municipalities. Finally, the laws introduced a new regime for fiscal decentralisation, by transferring 13 billion denar (210 million euro) to the local governments as well as permitting them to retain taxes raised locally. The municipalities are now able to raise short and long term loans from domestic or foreign banks under state supervision, and receive 1% of the VAT revenues.[290]

224. Opposition to the Ohrid Agreement provoked a successful campaign for a referendum on the decentralisation laws and a political crisis in mid 2004, although international interventions helped to avert the crisis. In particular, a commitment by the USA to accept Macedonia's constitutional name may have been instrumental in persuading Macedonians to boycott the referendum which took place in November 2004. Only 26% participated and so turnout did not reach the required 50%. At present, the implementation of the Agreement is on track, although the reforms of flags and symbols are as yet incomplete.

225. Dr Whyte told us before the failure of the referendum: "One lesson which comes out of this is that when you are writing peace agreements, look out for loopholes that can be exploited by other people, and that is what has happened in this case. It was not foreseen that a referendum could actually overrun minority guarantees that were inserted into the Ohrid peace agreements, but that is nevertheless what happened."[291] Commenting after the referendum had failed, the Minister took a more optimistic line. He told us: "We want to see full implementation of the Ohrid Framework Agreement. That referendum process, as we know, was designed to derail it, but is an example of how Ohrid has not fully embedded itself in the hearts and minds of all Macedonia's political class…[But] I am cautiously optimistic about Macedonia."[292]

226. We conclude that the international community must maintain its role in Macedonia, since its interventions to protect the Ohrid Framework Agreement have proved successful in ensuring stability. We recommend that the Government maintain its commitment to peace in Macedonia, continue to support the implementation of the remaining parts of the Ohrid Agreement, such as the flags and symbols issue, and contribute where it can to the final agreed delineation of the border between Macedonia and Kosovo. A lack of engagement by the international community could result in another crisis in Macedonia.

The name issue

227. The USA's decision to recognise Macedonia by its constitutional name, the Republic of Macedonia, probably played a significant role in persuading Macedonians not to vote in the referendum. However, Greece objects to the use of Macedonia and insists that international fora such as the UN, NATO and EU use the designation: 'the Former Yugoslav Republic of Macedonia (FYROM)'. The USA's decision follows a recognition of Macedonia's constitutional name by China and Russia, so that three of the five permanent members of the UN Security Council now accept the name. The United Kingdom and France are the exceptions. We heard in Skopje that the question of Macedonia's name was more than a theological debate in international relations, since it casts doubts on the state's legitimacy and security, given longstanding claims on Macedonian territory by its neighbours.

228. The Macedonian Embassy wrote: "The talks [about the name issue] between the representatives of the two governments are going on in New York under the auspices of the UN. Despite this issue, Macedonia and Greece have excellent bilateral relations particularly in the economic field. The position of the Government is using the constitutional name by all countries and international community, and the right of Greece to use a name which will be acceptable for both countries."[293] The Embassy also wrote that it appreciates the United Kingdom's use of Macedonia's constitutional name in bilateral dealings.

229. We asked the Minister why the United Kingdom continued to bow to Greece's intransigence on the issue. He told us: "In…international fora Greece can say: 'The only terms under which we will accept the participation or presence of Macedonia is if it is under the title of FYROM'…There were discussions under…UN auspices between Athens [and] Skopje [in] New York on trying to find a way out of this problem, but there are profound passions in Greece and I would not underestimate them. I think it is too easy to sit here in London, click your fingers and say: 'This position should be accepted' or 'That position should be accepted'. As far as I am concerned, and certainly, when I write a letter, I talk about Macedonia or the Republic of Macedonia, but at international gatherings where the Greek government is represented, and was there before Macedonia arrived, Macedonia sits with its partners as FYROM."[294]

230. We conclude that the recognition of Macedonia's constitutional name by three of the five permanent members of the UN Security Council should encourage the United Kingdom to follow suit. We recommend that the United Kingdom work in unison with Germany, France and other EU partners to recognise Macedonia's constitutional name, and encourage the Greek Government by an act of statesmanship to do the same.


231. Macedonia is a member of NATO's Partnership for Peace (PfP), and is progressing towards full membership of NATO, in close co-ordination with Albanian and Croatia, as part of the 'Adriatic 3'. The Istanbul Communiqué issued after the June 2004 summit said:

We welcome the progress made by Albania, Croatia and the former Yugoslav Republic of Macedonia in implementing their Annual National Programs under the Membership Action Plan (MAP), and encourage them to continue pursuing the reforms necessary to progress towards NATO membership…NATO will continue to assess each country's candidacy individually, based on the progress made towards reform goals pursued through the Membership Action Plan, which will remain the vehicle to keep the readiness of each aspirant for membership under review.[295] 

232. The Embassy of Macedonia told us: "The Republic of Macedonia has clear and strong commitment to be a part of the North Atlantic Alliance and together with all member states of the Alliance to advance and guarantee its own stability. There is overall political and civic consensus in the country concerning this strategic goal…[In just two years] Macedonia has achieved what for many seemed impossible; from consumers of the Euro-Atlantic military security, Macedonia has begun to contribute to the advancement of the regional and global security. Today, the Republic of Macedonia is a part of the global anti-terrorist coalition. Macedonian soldiers, together with the coalition forces, take an active part in securing the peace in Iraq and Afghanistan."[296]

233. The United Kingdom delegation to NATO described defence reform activities in Macedonia: "NATO has played a key role in fostering security in Macedonia since the inter-ethnic conflict of 2001, and the subsequent deployment of NATO forces in Macedonia until the end of 2002…NATO continues actively to work for stability in Macedonia, including through a NATO Headquarters in Skopje. The functions of this headquarters include advising on defence reform aspects of the MAP, advice on border security reform, support to KFOR and co-ordination with the EU presence in the country. A British brigadier is the commander of NATO HQ Skopje and is double hatted as the NATO senior military representative to Macedonia."[297] The FCO said that Macedonia has made substantial progress on defence reform, but that full implementation of the Ohrid Framework Agreement was a concern.

234. We conclude that Macedonia's membership of NATO is desirable but that rigorous standards for entry must apply; Skopje must fulfil all the terms of the Ohrid Framework Agreement. We recommend that the Government provide technical support on defence reform to Macedonia alongside its NATO partners, with a particular focus on minority representation in Macedonia's military institutions.

EU accession

235. Macedonia also submitted an application for EU membership on 22 March 2004. The Council of Ministers asked the European Commission to prepare an opinion on the application. The Commission then sent a comprehensive questionnaire to Macedonia with more than 3000 questions on issues including the political system, economy, legislation, administration and social affairs.[298]

236. The Macedonian government wrote: "At the moment, Macedonia is preparing replies to an impressive number of questions on political, economic and technical issues, which will allow the Commission to formulate its opinion if the country is ready to undertake the rights and obligations of membership. In this regard, the support of the United Kingdom will be very important in the efficient implementation of the procedure and in the process of answering the Questionnaire, as well as in the entire process until the final integration in the EU. This support will have an immense significance especially during the British EU-Presidency…when the European Commission will be finalising the Opinion."[299]

237. The Minister outlined the United Kingdom's position on Macedonian entry to the EU. He told us: "The British Government is financially supporting the European Integration Office of the Macedonian Government…Obviously, Macedonia's very positive ambition to aim for the EU is something that Britain supports and welcomes…but of course, full compliance with the Copenhagen criteria is necessary for Macedonia as for any other country…We want to see more progress on the SAA…and in particular in opening up the economy, judicial reform, corruption and organised crime."[300] However, a number of questions remain unresolved and may slow Macedonia's path towards the EU. For instance, an unresolved border issue with Kosovo—although only a small sliver of disputed territory—could retard Macedonia's accession efforts.[301]

238. We conclude that the United Kingdom should support Macedonia's efforts to join the EU, provided the state complies with the necessary criteria. We recommend that the Government offer Macedonia technical support in areas as defined by 'market share' discussion at EU level.

The economy and rule of law

239. The FCO said in its submission that "the principal challenge in Macedonia is the economy. Inflation, government expenditure and external debt are increasingly under control, helped by an IMF programme, but official unemployment stands at 35%. Although this is mitigated by the large grey economy, urgent action is required to create jobs."[302]

240. Industrial decline and the long-standing dominance of Macedonians in public jobs were at the heart of the political crisis in Macedonia last summer. The Ohrid Agreement mandates the increase in numbers of Albanians in public jobs, at the same time as pressure from the International Financial Institutions (IFIs) and long term industrial decline is reducing funding. Consequently, the reforms have led to intense resentment between the ethnic groups. The impact of job cuts has fallen disproportionately on Macedonians; they hold the bulk of public sector jobs, are mainly urban and traditionally had privileged access to secondary and tertiary education. Albanians, who strongly resent their lack of access to education, fill a predominantly entrepreneurial private sector and rural role; they also rely heavily on remittances from their large expatriate community, funds which are not available to the Macedonian population and often make them wealthier than their Slavic neighbours. Privatisations in Macedonia have contributed to the problem, since many sell-offs were insider deals to local workers and managers because the low quality of industrial plant did not attract foreign investors. The owners now are unable to carry out the cut-backs or invest the capital necessary to curtail industrial decline and modernise the plant, or have already shut down loss making businesses. Unemployment lingers between 30-40% in many parts of Macedonia.[303]

241. Key to effective development is the rule of law. We heard in Skopje that reform of Macedonia's judiciary was crucial to a successful bid for EU entry; corruption was a serious problem and the Macedonian government was changing the system of selection of judges. The FCO wrote in its submission: "A properly functioning judicial system is necessary to stimulate the economy, especially for FDI. It should also help to confront organised crime, which, as elsewhere in the region, is a major problem in Macedonia. But further high-level political commitment is required to make progress. This applies equally to tackling the commonplace allegations of corruption. To this end, the UK funds a small project enabling a team of 5 experts to monitor the judicial process in corruption related cases in order to develop recommendations for legal and institutional reforms."[304]

242. We conclude that support for economic development in Macedonia, particularly in the area of legal reform, is essential for its long term stability. We recommend that the United Kingdom support Macedonia in the technical areas necessary to bring foreign direct investment into the state, for instance by funding advice from experts in investment law.


243. We conclude that while Macedonia's stability is not yet fully guaranteed, the continued willingness of its people to avert conflict is commendable. We also conclude that continued engagement is essential to maintain stability and that offering greater access to pre-accession funds might ease Macedonia's movement towards the EU; economic development would lessen the likelihood of future conflict and contribute to regional stability.

289   International Crisis Group, Macedonia: War on hold, 15 August 2001, Back

290   International Crisis Group, Macedonia: Make or Break, 3 August 2004, Back

291   Ev 46 Back

292   Ev 88 Back

293   Ev 130 Back

294   Ev 88 Back

295   North Atlantic Treaty Organisation, Istanbul Summit Communiqué, 29 June 2004 Back

296   Ev 129 Back

297   Ev 130 Back

298   International Crisis Group, Macedonia: Make or Break, 3 August 2004, Back

299   Ev 129 Back

300   Ev 88 Back

301   Ev 102 Back

302   Ev 67 Back

303   European Stability Initiative, Ahmeti's Village: The Political Economy of Interethnic Relations in Macedonia, 1 October 2002,and International Crisis Group, Macedonia: Make or Break, 3 August 2004 Back

304   Ev 68 Back

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Prepared 23 February 2005