EUROPEAN COMMISSION Brussels, 6.10.2020 SWD(2020) 351 final COMMISSION STAFF WORKING DOCUMENT North Macedonia 2020 Report Accompanying the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions 2020 Communication on EU Enlargement Policy {COM(2020) 660 final} - {SWD(2020) 350 final} - {SWD(2020) 352 final} - {SWD(2020) 353 final} - {SWD(2020) 354 final} - {SWD(2020) 355 final} - {SWD(2020) 356 final} EN EN Table of Contents 1. Introduction ................................................................................................................... 3 1.2. Context .......................................................................................................................... 3 1.2. Summary of the report .................................................................................................. 4 2. Fundamentals first: political criteria and rule of law chapters...................................... 7 2.1. Functioning of democratic institutions and Public Administration Reform ................. 7 2.1.1. Democracy .................................................................................................................... 7 2.1.2 Public administration reform ...................................................................................... 12 2.2 Rule of law and fundamental rights ............................................................................ 16 2.2.1 Chapter 23: Judiciary and fundamental rights ............................................................ 16 2.2.2 Chapter 24: Justice, freedom and security .................................................................. 35 3. Fundamentals first: economic development and competitiveness .............................. 47 3.1. The existence of a functioning market economy ........................................................ 47 3.2. The capacity to cope with competitive pressure and market forces within the Union54 4. Good neighbourly relations and regional cooperation ................................................ 57 5. Ability to assume the obligations of membership ...................................................... 59 5.1 Chapter 1: Free movement of goods ........................................................................... 59 5.2 Chapter 2: Freedom of movement for workers ........................................................... 61 5.3 Chapter 3: Right of establishment and freedom to provide services .......................... 61 5.4 Chapter 4: Free movement of capital .......................................................................... 62 5.5 Chapter 5: Public procurement ................................................................................... 63 5.6 Chapter 6: Company law ............................................................................................ 66 5.7 Chapter 7: Intellectual property law ........................................................................... 66 5.8 Chapter 8: Competition policy .................................................................................... 67 5.9 Chapter 9: Financial services ...................................................................................... 69 5.10 Chapter 10: Information society and media ................................................................ 70 5.11 Chapter 11: Agriculture and rural development ......................................................... 72 5.12 Chapter 12: Food safety, veterinary and phytosanitary policy ................................... 73 5.13 Chapter 13: Fisheries .................................................................................................. 75 5.14 Chapter 14: Transport policy ...................................................................................... 75 5.15 Chapter 15: Energy ..................................................................................................... 77 5.16 Chapter 16: Taxation .................................................................................................. 78 5.17 Chapter 17: Economic and monetary policy .............................................................. 79 1 5.18 Chapter 18: Statistics .................................................................................................. 80 5.19 Chapter 19: Social policy and employment ................................................................ 82 5.20 Chapter 20: Enterprise and industrial policy .............................................................. 84 5.21 Chapter 21: Trans-European networks ....................................................................... 86 5.22 Chapter 22: Regional policy and coordination of structural instruments ................... 87 5.25 Chapter 25: Science and research ............................................................................... 88 5.26 Chapter 26: Education and culture ............................................................................. 89 5.27 Chapter 27: Environment and climate change ............................................................ 92 5.28 Chapter 28: Consumer and health protection ............................................................. 94 5.29 Chapter 29: Customs union ........................................................................................ 95 5.31 Chapter 31: Foreign, security and defence policy ...................................................... 98 5.32 Chapter 32: Financial control ..................................................................................... 99 5.33 Chapter 33: Financial and budgetary provisions ...................................................... 101 Annex I – Relations between the EU and North Macedonia .................................................. 103 2 1. INTRODUCTION 1.2. Context The Stabilisation and Association Agreement (SAA) between the Republic of North Macedonia and the EU entered into force in April 2004. Since 2009, the Commission has continuously recommended to the Council to open accession negotiations with North Macedonia, a candidate country since 2005. In its June 2018 Conclusions, the Council acknowledged the progress achieved and set out the path towards opening accession negotiations in June 2019. In line with the Council Conclusions, the Commission started the preparatory work, including through the technical explanation of chapters of the EU acquis. In light of the progress achieved and the conditions set unanimously by the Council in June 2018 having been met, the Commission recommended to open accession negotiations in May 2019. In June 2019, the Council postponed its decision to no later than October 2019. The European Council decided in October 2019 to ‘revert to the issue of enlargement before the EU-Western Balkans summit in Zagreb in May 2020’. The Commission has continued to closely monitor developments in North Macedonia and reported in March 2020 that North Macedonia has increased its efforts and delivered further tangible and sustainable results in the key areas identified in the Council Conclusions of June 2018 such as the judiciary, fight against corruption and organised crime, intelligence services reform and public administration. In its update on North Macedonia published in March 2020, the Commission confirmed that the bases of the Commission’s 2019 recommendation to open accession negotiations with North Macedonia remain valid. On 26 March 2020, the European Council endorsed the Council’s decision to open accession negotiations with North Macedonia1. The authorities continued to demonstrate publicly their commitment to advance on their EU path. The COVID-19 pandemic is a global shock that has not spared the Western Balkans. The final extent of its footprint in terms of loss of human lives and damage to the economies is still difficult to assess, but early estimates foresee a drop of between 4 and 6% of Gross Domestic Product (GDP) in the region. Thousands of citizens are at risk of losing their jobs, and temporary government support measures (unemployment benefits, deferrals/waivers to tax and social security contributions, etc.) have an important fiscal impact. While the EU is itself heavily affected by the pandemic, it has spared no time and effort to provide essential and unparalleled support to the Western Balkans. This includes financial support of more than EUR 3.3 billion for countries in the region to address the immediate health crisis and resulting humanitarian needs, as well as longer term and structural impact on their societies and economies. Given the European perspective of the Western Balkans, the EU is also treating the region as privileged partners by associating them with the Union’s mechanisms and instruments. These include the Health Security Committee, Joint Procurement Agreements, Union Civil Protection Mechanism, Solidarity Fund, consular assistance in repatriation or exemption from temporary EU export restrictions of medical equipment. These and other measures have provided immediate relief and are a clear message of the EU’s political commitment towards the region. Due to the COVID-19 outbreak, the President of the Republic declared a state of emergency from March until June 2020. Restrictive measures were put in place to protect the citizens 1 https://www.consilium.europa.eu/media/43076/26-vc-euco-statement-en.pdf 3 and contain the pandemic (e.g. curfews, limitation of non-essential movement or gatherings, freezing of air traffic