Thewesternbalkans
North Macedonia’s Prime Minister Hristijan Mickoski announced on July 11 that he had reached agreement with his Hungarian counterpart Viktor Orbán for a EUR 500 million loan to Skopje.
The loan is part of a deal on “special economic cooperation” between the two countries, agreed during a meeting in Washington where the two prime ministers attended a NATO summit. The loan will have an interest rate of 3.25% and a 15-year term, including a 3-year grace period, Mickoski said.
Half of the funding will be used as direct support for the local companies under the same terms, while the remainder will be used to finance capital projects in municipalities, the Skopje government said.
According to the deal on special economic cooperation North Macedonia can, if needed, seek additional financial help from Hungary in the future.
On July 12, the opposition SDSM condemned the decision of Prime Minister Mickoski to form a “strategic economic partnership” with Hungary. According to the new SDSM’s chairman Venko Filipče, the loan has nothing to do with special economic cooperation and it is crystal clear that there are political interests hiding behind this deal.
Comment: Just after his right-wing VMRO-DPMNE party’s election victory in May, Mickoski announced that the government plans to borrow EUR 1 billion from an undisclosed member country of the EU to finance capital projects. Speculation that this country was Hungary started right away.
Although, according to Mickoski, it was not possible for the North Macedonia to negotiate with another country or financial institution more favorable terms for credit, it should be noted that the country is already using a credit line from the European Bank for Reconstruction and Development, worth EUR 150 million, that has a 1.6 % interest rate, a two-year grace period and a 12-year repayment period.
VMRO-DPMNE has a history of close ties with Orbán and his Fidesz party. The strong relations between the two ruling parties were built during the ten-year tenure in office of North Macedonia’s former premier and previous VMRO-DPMNE leader, Nikola Gruevski, from 2006 to 2016.
Gruevski, convicted for corruption at home, has resided in Hungary since late 2018, when he fled to Budapest to seek political asylum.
