What are the expectations of the country in conditions of economic crisis, how does the country finance the public debt, is there over-indebtedness and which are the most efficient ways to reform or control the public debt level, are only some of the issues covered within the conference „Free Market Road Show“ on topic “Consequences of high public debts of European countries – Consolidation of government budgets as priority” – being held in Skopje yesterday.
 
Within the series of conferences „Free Market Road Show“ being held in Skopje for the second time, university professors, business leaders, politicians, economists and journalists travel across many European cities, opening platforms for discussions on issues related to global economic developments with local partners and colleagues.
 
This year, the first part of the series of conferences, scheduled for May, ends in Skopje. Bratislava, Prague, Vienna, Budapest, Zagreb, Podgorica and Belgrade were previously visited, while Western European cities among which Berlin, London and Brussels are planned to be visited in September.
 
Vice Prime Minister and Minister of Finance, Zoran Stavreski explained the manner, by which Republic of Macedonia copes with the problems and the impact of the global crisis. He pointed out that the Government, to the end of protecting the economy, as of the start of the global economic crisis, implemented four anti-crisis packages, as well as two Supplementary Budgets for 2009 so as to achieve the projected budget deficit of 2.8% of GDP.
 
– Macedonia’s budget policy was set on a slightly higher budget deficit so as for it to be anty-ciclical and in order to mitigate the crisis impact. Macedonia, unlike other countries did that moderately, so the increased budget deficit did not cause excessive indebtedness and excessive public debt increase, Stavreski said.
 
He pointed out that Macedonia ended 2009 with a total public debt of 32% of GDP, including the debt of NBRM and the public enterprises, and if they are excluded, general government debt amounted to 24% of GDP. This, according to him, shows that Macedonia remained low indebted country, thus providing for easier coping with the need for medium and long –term financing and regular servicing of its liabilities.
 
– Macedonia belongs to the group of few countries, having no expressed need to adjust public finance from the point of view of budget deficit these days. We will try to keep the budget deficit at a level that would not cause significant increase of the debt in the coming years as well. This means that there will be deficit of 2.5% in 2010 and 2011, to drop to 2% of budget deficit, Stavreski said, pointing out that prudent limit for the country’s indebtedness is 40% of GDP.
 
He said that this would enable realization of several infrastructure and energy projects, being important for Macedonia, such as Corridors 8 and 10, as well as completion of the railway line construction.
 
– At the moment, global developments are quite worrying taking into consideration the events within the Eurozone, our main partner. If such trends continue, they will undoubtedly cause problems for Macedonian economy and public finance as regards the achievement of projections. If the situation in the Eurozone stabilizes, Macedonia will be able to realize its main economic parameters as regards public finance and budget deficit, as well as regarding the macroeconomic developments, Stavreski said.
 
Representative of the Macedonian Chambers of Commerce Lidija Nanus pointed out that low taxes in Macedonia do not perhaps provide sufficient funds for financing the existing costs.
 
– In conditions of reduced external demand, the country has to provide domestic incentives for the economy by financing infrastructure projects in the field of energy and the public sector, Nanus said, adding that Denar stability does not contribute to the economic growth.
 
She pointed out that the country timely returns the funds on the basis of VAT refund to the business sector.
 
Chairman of the Assembly of the Economic Chamber of Macedonia Antoni Peshev required from the country, in such times, to be partner to the business sector and intervene on the market, following the example of other countries, although, and according to him market freedom should be held sacred.
 
Minister Stavreski replied that it is not good for the country to interfere on the market and decide which companies will and will not survive.
 
– It is better for the government to stay in the background, so as to provide for businessmen to be key players. Once the government starts interfering with the business and deciding which sector will prosper and which one will fail, it will be very difficult to stop it afterwards Stavreski said.
 
„Free Market Road Show“, was launched in 2008, visiting five European cities – Vienna, Portoroz, Berlin, Prague and Brussels. Last year’s tour included eight cities, among which Skopje as well.
