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27th May 2022, Skopje – This is a crisis of major proportions. The Government undertook timely and targeted measures as initial response, aimed at protecting the economy and the living standard of the citizens. If it was not for these measures, the damaging effect would have been greater, Minister of Finance, Fatmir Besimi, said in his guest appearance on Telma TV show “Win Win”.

“The external shock is large. Hence, no matter the multitude of measures we undertake, we can only absorb the shock and adjust in the medium term to sustain the growth, as well as adjust the economy to suffer less damages. We do not say we have resolved all problems with the measures we have undertaken and the ones we plan to undertake. What the citizens should know, and that is the truth, is that the energy will need to be saved, because the current prices are not sustainable in relation to the prices on the global stock markets”, the Minister underlined.

He went on by adding that the Supplementary Budget is a response to the crisis, which is to be financed through a combination of instruments in order to optimize the cost amid high interest rates which amount to 6.5% on the international financial markets at the moment.

“The goal is to optimize the instruments and to reduce the financing costs. Therefore, alternatives have been sought, such as requesting funds from the International Monetary Fund, funds for projects from IFIs, as well as borrowing on the domestic market, rather than financing the entire amount by issuing a Eurobond. Securing the financing for our economy is not debatable, but what is important is to do the financing at the most appropriate moment with the lowest costs possible”, Minister Besimi said.

The Minister pointed out that measures are also envisaged in the Supplementary Budget aimed at increasing the domestic production of food, considering the great uncertainty arising from the war in Ukraine and the possibility for food insecurity.

“Draft 2022 Supplementary Budget envisages additional EUR 52 million for agricultural subsidies, with funds also made available to the agricultural sector through the Emergency Fund. It is planned for the farmers to receive the funds in the initial stage of the production, in addition to the envisaged subsidies they receive after delivering the harvest”, Minister of Finance said.

As regards the demands for wage increase in the public sector, the Minister underlined that such increase should follow on increased productivity.

With respect to the Unions’ demands, the Minister said that the whole situation is to be reasonably viewed in the context of the crisis and there should be an economic logic behind the wage increase.

“Basic economic logic, higher wages demand higher productivity in the economy. Business sector is where economic activity is generated, therefore, the economy has to grow to produce more revenues”, Besimi said.

He also said that this is an open issue in the economic and social dialogue, with the role of the Ministry of Finance being to say whether the policies agreed in the course of the dialogue could be incorporated in a sustainable budget. The Minister pointed out that, so far, the Government has shown responsiveness in the economic and social dialogue as regards many issues that were part of the negotiations.

Also available in: Macedonian Albanian

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