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Economic Policies of FYROM Towards the EU—Are They Efficient?

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Economic Crisis in Europe and the Balkans

Part of the book series: Contributions to Economics ((CE))

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Abstract

This paper makes the claim that, instead of economic policymaking based on economic cycles, the current and previous Governments of the Former Yugoslav Republic of Macedonia (FYROM) have made policymaking based on political cycles to suit the needs of individual elites while not focusing on the priority of eventual EU integration, leading to a decade long failure of creating priorities for eventual EU accession. The correlation of economic policy based on political consequences is presently threatening FYROM’s attempt to create institutional reforms needed to transform its economy into an efficient market economy. This “populistic” approach of the national political elites gives Brussels additional reasons to offer FYROM the cold shoulder, since national EU harmonization in economic issues have been frozen. Through a comparative and benchmark analysis, the paper will examine the present economic situation in FYROM and what is needed to intensify the process of economic policy harmonization to EU standards. It finds that the lack of sufficient economic policy outcomes from Skopje may lead the EU to regard this as a retreat from its obligations. The current economic national strategy of reforms by moving one step forward and two steps back will leave FYROM out of the EU enlargement agenda.

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Notes

  1. 1.

    In his book, “Europe: The Shattering of Illusions,” Klaus asserts that Governments need to examine the costs of convergence.

  2. 2.

    For more, see Soros (2002).

  3. 3.

    Hugh and Kochan (2008).

  4. 4.

    Alan J. Auerbach and William G. Gale, The Economic Crisis and Fiscal Crisis: 2009 and Beyond, February 2009.

  5. 5.

    See more: Aurebach and Gale (1999, 2001), Auerbach et al. (2003), Auerbach, Furman and Gale (2007, 2008).

  6. 6.

    Farrokh Langdana, has also analyzed the twin deficits phenomena G − T = (I − S) − (I − Ex) and he notes: budget deficits are G − T > 0. Here, T is tax revenues, given by T = tY, where “t” is the tax rate, and Y is national income. If national income (Y) falls here and in Europe as the mature economies sink into a slowdown or another recession, the tax revenues (T) will fall fast, and as unemployment benefits (G) increase, the deficits will shoot up rapidly. See more: Manuscripta No. 69, January 2010-BERG series.

  7. 7.

    See more: Alesina A., and R. Perotti (1995a), Fiscal Expansions and Adjustments in OECD Countries, Economic Policy, n.21, 207–247.

  8. 8.

    See: Memorandum of Budget and Economical Fiscal Policy for 2009 with Projections for 2010, 2011.

  9. 9.

    Data for Regional Economies, including FYROM taken from: Economic Commission – Economic Projections, November 2008, Brussels.

  10. 10.

    NBRM (2009).

  11. 11.

    Ministry of Finance (2009).

  12. 12.

    Bexheti (2008).

  13. 13.

    Foundation – Memorial Center Nikola Kljusev (2009) pp. 38–42.

  14. 14.

    Country Report Macedonia, Economic Intelligence Unit (2008) p. 7.

  15. 15.

    IMF Country Report No. 09/XX, Former Yugoslav Republic of Macedonia: Selected Issues, p. 11 February 2009.

  16. 16.

    See: Shukarov (2009).

  17. 17.

    NBRM Database sources (www.nbrm.mk.com—FDI and External Sector).

  18. 18.

    Australian Macedonian Weekly: www.australianmacedonianweekly.com/edition (April 2012).

  19. 19.

    Rexhepi (2012) p. 133.

  20. 20.

    Bogov (2012).

  21. 21.

    Bexheti (2008).

  22. 22.

    SIS State Statistical Office DZS National Account GDP-Publication Number 3.1.9.05.18 Sept 2009, Skopje, FYROM.

  23. 23.

    Bexheti (2010).

  24. 24.

    See: IMF (2009b).

  25. 25.

    Soros (2002) pp 68.

  26. 26.

    Commission of the European Communities, “The Former Yugoslav Republic of Macedonia 2009 Progress Report,” {Comm 2009 553}, Brussels, 2009.

  27. 27.

    For more detail see also Bexheti (2010) and NBRM (2008).

  28. 28.

    FYROM Ministry of Agriculture, Forestry, and Water Works (2009).

  29. 29.

    Halili (2011) pp 84–85.

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Authors and Affiliations

  1. South East European University, Illidenska bb, Tetovo, FYROM

    Abdylmenaf Bexheti & Luan Eshtrefi

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  1. Abdylmenaf Bexheti
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  2. Luan Eshtrefi
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Correspondence to Abdylmenaf Bexheti .

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Editors and Affiliations

  1. School of Business and Economy, Accountancy Department, Kavala Institute of Technology, Agios Loukas, Kavala, 65404, Greece

    Anastasios Karasavvoglou

  2. School of Business and Economy, Accountancy Department, Kavala Institute of Technology, Agios Loukas, Kavala, 65404, Greece

    Persefoni Polychronidou

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Bexheti, A., Eshtrefi, L. (2014). Economic Policies of FYROM Towards the EU—Are They Efficient?. In: Karasavvoglou, A., Polychronidou, P. (eds) Economic Crisis in Europe and the Balkans. Contributions to Economics. Springer, Heidelberg. https://doi.org/10.1007/978-3-319-00494-5_8

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