As 2022 approaches, North Macedonia finds itself in a little bit of a political commotion, however, there are signs that the country might see light at the end of the tunnel with energy investments coming in, according to Debarliev, Dameski & Kelesoska Partner Emilija Kelesoska Sholjakovska.
“With the end of the year coming up soon, thinking back, I think that the past three months were among the most turbulent political periods for our country,” Kelesoska Sholjakovska begins. “We had local elections in October, which resulted in a significant change in the political structure of the ruling party and the opposition in terms of their municipalities seats.”
Kelesoska Sholjakovska says that the most challenging element was the Prime Minister’s resignation announcement and the “elections for the new president of the ruling party. The new president – the election for whom stands to end by January 2022 – will also be the new mandator for the new government.” She reports that the new government will have to deal with a lot. “There’s the ongoing pandemic, an energy crisis, and political turmoil in bilateral relations with Bulgaria that are precluding the start of EU accession negotiations – so there’s a lot to deal with.”
On the other hand, with the political environment being so tumultuous, there were little to no legislative updates to report on, bar two laws that are in the second phase of being passed. “The first one,” Kelesoska Sholjakovska says “is the Law on Register Book Identification, with the implementation of the EU Regulation on Electronic Identification and Trust Services for Electronic Transactions in the Internal Market, and the second one has to do with the proposed changes to VAT.”
In terms of the business climate, Kelesoska Sholjakovska reports that the pandemic impact is still high in terms of the overall economy of North Macedonia. “Industries and companies are slowly recovering, but are also struggling to maintain their production capacities, levels of business activities, productivity, competitiveness, and perception by foreign markets and investors,” she says. “However, the National Bank is assuring everybody that the Macedonian Denar is stable and that there are no significant changes to its exchange rates, which is a good signal for the forthcoming period.”
Finally, Kelesoska Sholjakovska turns to major transactions of late. “The M&A market was active recently, with a few big transactions, which is a positive sign that business is moving ahead, slowly,” she says. “The government announced two major projects in the energy sector, which are designated with the status of a ‘strategic investment project.'” The first one is a German company investing in a wind park and the second one is a French investment in the construction of a solar park. “Both investments amount to approximately EUR 1 billion and, given the current energy crisis worldwide, they are certainly coming in at the right time,” Kelesoska Sholjakovska concludes.