Macedonia needs new government of national unity

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Johannes Hahn [European Commission]

This week European Neighbourhood Policy and Enlargement Negotiations Commissioner Johannes Hahn has a vital chance to define the democratic standards for candidates for EU membership, and show the lines that they cannot cross, write Heather Grabbe and Goran Buldioski.

Heather Grabbe is director of the Open Society European Policy Institute in Brussels. She was senior advisor to the European Commissioner for Enlargement between 2004 and 2009. Goran Buldioski is the director of the Open Society Initiative for Europe and worked for Council of Europe between 2000 and 2005. He is originally from Macedonia.

Today (10 June) Commissioner Hahn will host crisis talks between Nikola Gruevski, Prime Minister of Macedonia, and Zoran Zaev, leader of the main opposition party. The mediation aims to break the political stalemate in Macedonia following weeks of public protests. The public has been scandalised by revelations that the government wire-tapped more than 20,000 citizens, and the exposure of electoral and judicial fraud, systemic corruption and the abuse of state institutions.

This is a decisive moment for the Macedonian state – but also for democracy in the whole of the Western Balkans. The EU set political criteria for would-be members 22 years ago: the stability of institutions guaranteeing democracy, rule of law, respect for human rights and the rights of minorities. Macedonia gained candidate status in 2005 after the Commission assessed that it had met these conditions. But in recent years the Commission has signaled in its annual reports that PM Gruevski’s government was close to losing it.

Now the publication of more than 30 recordings has revealed state capture — systemic corruption and subversion of public institutions and resources for private interests— on a large scale following the loss of democratic checks and balances after the ruling party VMRO-DPMNE took over state institutions. Since 5 May, the country has seen massive civil-society led protests, counter-protests sponsored by the government, and a violent incident that left 18 dead in Kumanovo, a multi-ethnic town near Macedonia’s borders with Serbia and Kosovo. Hahn’s mediation follows a series of efforts over the last month aimed at an agreement between the two parties for a joint caretaker government and a road-map to legitimate elections in 2016.

Democracy is fragile across the region. While the EU has historically tolerated many imperfections, the Macedonian recordings revealed in meticulous detail a system so dysfunctional that it questions the legitimacy of the government across the board.

Political spillover from Macedonia’s crisis is likely. Revelations this week of illegal wire-tapping by the Serbian intelligence services suggests another surveillance scandal in the largest country in the region. A clear and resolute response from the Commission about wire-tapping for political advantage is vital to uphold standards of governance across the region.

Other leaders in the region will be watching closely to see whether the Commission will be lenient. At the end of August, the five Balkan prime ministers will meet German Chancellor Angela Merkel and EU High Representative Federica Mogherini in Vienna. They care only about how to secure European investments for the region’s infrastructure. If the EU allows them to brush off questions about the state of governance and democracy in their countries, they will treat EU funds as no different from Chinese and Russian investments.

A firm stance by the EU is also vital to reduce reliance on overly powerful security structures as guarantors of the region’s stability. The controversial Kumanovo incident and the subsequent resignation of the chief of the Macedonian Intelligence Agency revealed that these agencies are unaccountable and unpredictable. Far from maintaining stability, they are quashing legitimate dissent and stoking inter-ethnic tensions. These agencies need to be brought under proper democratic control across the region, and Macedonia is the test case for EU action.

The EU and international financial institutions need to probe more deeply into Macedonia’s dysfunctional economy. At €4,000 per capita (or €9,900 at purchasing power standard in 2014), it is still a very poor country with a 28% unemployment rate (the second highest in Europe). Between 2008 and 2014, Macedonia’s public debt quadrupled, rising from 23% of GDP in 2008 to around 46% in 2014. The state budget increased by a third over the same period but foreign direct investment is at a trickle. Without heavy government borrowing, this fragile economy could not sustain the 300,000 pensioners or bloated state administration.

No other government in the Balkans has used debt financing for such grandiose and delusional building projects as Skopje has, but they all have inflated numbers of state employees and pensioners – an effective way to ensure faithful voters on election day. A tougher line on the financial sustainability of this clientelistic style of doing politics would send warnings to Podgorica, Tirana and Belgrade.

The way ahead is becoming clearer. The first step is for the Commission to facilitate the creation of a new government of national unity in Macedonia, with fresh faces in a transitional team that includes all ethnic groups and parties. This government should prepare for free and fair elections in 2016, with a liberated media and tamed security services. Pluralism needs to be restored in political institutions to rebuild checks and balances. That would send a strong signal to the region’s citizens that the EU still cares about stability in the Balkans and the democratic principles it has long promoted there.