Why the EU and North Macedonia should not rush reforms

This Clingendael Spectator series ‘Western Balkans In Focus’ gives an inside perspective into the wobbly path of the Western Balkans six (WB6; consisting of Albania, Bosnia & Herzegovina, Kosovo, North Macedonia, Montenegro and Serbia) in their ambition to join the European Union. In this third contribution, Misha Popovikj explains how the uncertainty of North Macedonia's EU accession affects the already fragile reform process.

In 2015, the European Commission (EC) for the first time spoke of state capture in North Macedonia, amidst widespread corruption and democratic governance backsliding.1  State capture entails a high level of corruption, based on systemic and continuous abuse of office in favour of private interests.2

Five years later, however, the EC noted progress in the judiciary and the fight against corruption, which are the main pillars in dismantling state capture.3 The country subsequently received permission from member states of the European Union (EU) in March 2020 to start accession negotiations with the EU.

The interventions of EU actors have had a limited and mixed impact on good governance reforms in North Macedonia

This relatively quick turnaround would have been impossible without the assistance of North Macedonia's international partners, mostly the United States (US) and the EU. Reforms of the past four years have especially taken place in the context of the country's efforts to start EU accession negotiations.

This is because the EC and some member states outline their expectations for short-term achievements in reforms as a prerequisite for starting negotiations. But has EU assistance and conditionality contributed to the sustainability of good governance reforms?

This paper argues that the interventions of EU actors (EU institutions and member states) have had a limited and mixed impact on good governance reforms in North Macedonia. It shows how ambitious goals and short deadlines for reforms, as set by the EC and the EU member states, can adversely impact the quality of reforms.

Moreover, this piece briefly discusses how EU conditionality and engagement contribute to the improvement of good governance and how an uncertain accession perspective limits this dynamic. Lastly, the article identifies several recommendations for the EU to improve its enlargement policies by drawing lessons from the experiences of the past years.

The reforms discussed in this paper focus on the rule of law. The prosecutors and judges' independence and impartiality is the foundation of the rule of law and a crucial precondition for good governance. It is essential for effective anti-corruption policies that infringements of the law are prosecuted, regardless of the social position of the perpetrator, be it a regular citizen or high ranking official.

Short history
Judicial reforms have closely followed North Macedonia's ambitions to join the EU. The first major overhauls happened in 2005 and 2006, on recommendation of the EU. These reforms included new standards for the appointment and dismissal of judges and the introduction of a Judicial Council as the highest authority.

However, despite the importance the EU attaches to judicial independence and despite numerous projects facilitating improvements in the judiciary, the EC noted continuous political interference in the judiciary since 2008. It reported attempts by high-ranking politicians to influence the appointment and dismissal of judges and prosecutors.4

The EU successfully facilitated the conflict resolution between the major political actors

In 2015, the social democrats, then in opposition, revealed a massive illegal wiretapping operation ran by the government of the Internal Macedonian Revolutionary Organization - Democratic Party for Macedonian National Unity (VMRO-DPMNE).5  The recorded conversations revealed large-scale corruption and confirmed the suspicion of undue influence of the incumbent political parties in the judiciary's appointment and dismissal.

Similar practices were found in other institutions such as agencies, inspectorates and (formally independent) regulatory bodies. This scandal aggravated the ongoing political crisis.

The EU successfully facilitated the conflict resolution between the major political actors. The most significant achievement of the process was establishing a special prosecutor, tasked to investigate crimes revealed in the wiretaps. This reaffirmed the EU's role as a provider of means to resolve conflicts and, at least declaratively, motivate political actors to commit to reforms.

Simultaneously, the EC sent an expert mission, led by former EU director of the Western Balkans Reinhardt Priebe, to assess the situation. His recommendations focused on the judiciary's lack of integrity, the patronage and clientelism in the administration, and the pressing need to reform the security sector.6  Priebe's expert mission provided the EU with a framework of reform objectives that would lead North Macedonia back toward the accession process.

In 2017, the social democrats, led by Zoran Zaev, formed a new government. The new majority took on to implement Priebe’s recommendations. It worked towards resolving the decade-long name issue with Greece, hoping that this would lead to the long-expected and delayed start of negotiations.

One cannot simply abolish state capture
North Macedonia had to demonstrate to its EU partners that it can change, and it needed to act quickly. A decade of setbacks and backsliding meant many far-reaching reforms had to be implemented for the country to be considered as a viable candidate to start negotiations.

Notable improvements were needed in the security sector, as well as the reform of the public administration, the fight against corruption and – most prominently – the judiciary. How were reforms, spurred by the EU, implemented after 2017 and what mistakes have been made in that regard?

The first problem was that the reforms had to be implemented quickly. However, bad governance in the past had left institutions to operate under capacity to avoid the meaningful enforcement of rules. Therefore, a governmental shift did not automatically mean that bad regulation, weak human integrity and lack of capacity would disappear.

Members of the judiciary continued to demonstrate corrupt behaviour. For example, it took two years to find a way to replace two high-ranking judges and send them to trial for abuse of office.

New appointees in the Judicial Council were found to have links to the new incumbent political parties, meaning that political appointments continued to occur. Some of them worked closely with or had close personal relationships with high ranking politicians. Others were proposed and appointed by political parties in the parliament, inspite of their modest juridical experience.

A second problem with the EU-fostered reforms has been their lack of focus on implementation. The authorities adopted new strategies, enacted new laws and recently adopted new methodologies to evaluate judges and prosecutors' work. Both the EU’s and authorities of North Macedonia authorities expect that these strategies will help to improve the judiciary.

Both North Macedonia and the EC from the start missed out on the opportunity to set aside time for diagnosing in detail what has failed and led to state capture

However, there has not been much consideration whether these new developments are essential to dismantle corruption or improve the rule of law. Despite being adopted, new rules were in practice only partially implemented, in other words, institutionalised.7

This reflects past reforms under the auspices of the EU integration process. In 2005, EU-fostered reforms already focussed on the adoption of new rules organising the appointment and assessment in the judiciary. Little was improved, and by 2015, political parties successfully controlled the judiciary.

Third, both North Macedonia and the EC from the start missed out on the opportunity to set aside time for diagnosing in detail what has failed and led to state capture. Civil society demanded that institutions under high risks of corruption performed these diagnoses before doing anything else.8

The point was to identify weaknesses and confirm lines of responsibility. For sure, performing a diagnosis does not necessarily lead to the achievement of results, but it ensures reforms have a logical sequence and more ambitious long-term goals. Even after four years, corruption risk diagnostics is modest and is not guiding the reform solutions.

Lastly, these narrow timeframes meant the government had to resort to negotiations with the opposition, to enact legislation and policies before the annual General Affairs Councils of the EU.9  This sidelined a transparent deliberative process in the Parliament of North Macedonia.

Decisions about future reforms had to involve members of parliament (MPs) or other politicians under criminal investigation. Therefore, some MPs, or those influencing them, had substantial leverage on the reforms.

Where next?
Despite the four problems, the EU has given North Macedonia permission to start negotiations in March 2020. This was a political move by both the EC and member states, who wanted to support the reformist orientation of the government of North Macedonia, even if not all reforms had yet been successful.

The uncertainty of EU accession prospects, mostly because of the Greek veto between 2008 and 2018, certainly contributed to the old government's observed backsliding. The likelihood that North Macedonia will not start negotiations in 2021 because of the Bulgarian veto and the expected EU focus on the recovery from COVID-19 will again adversely affect good governance prospects and have a significant effect on the functioning of EU conditionality.

But even without strong leverage based on a clear accession perspective, the EU can contribute to sustainable reforms. It remains the largest foreign aid provider and has an opportunity to facilitate constructive processes of progress.

The EU would do well to structure its efforts around the idea of collective action as the driver of change

To do so, the EU would need to shift attention away from hollow and hastily adopted legal reforms that do not have a sustainable impact on North Macedonia's good governance and anti-corruption agenda.

As this article has shown, the EU's focus so far has led to the adoption of rules instead of their implementation, failed to demand an encompassing diagnosis of good governance problems and provided corrupt parliamentarians with leverage to influence the reform processes.

Instead, the EU would do well to structure its efforts around the idea of collective action as the driver of change. In essence, this means creating an environment where citizens expect, demand and react if institutions do not abide by the rules. While the EU cannot engineer collective action externally, ramping up support to civil society and free media could facilitate such needed pressure.

Local civil society is already joining forces in other areas. For example, campaigns to improve sustainable exploitation of resources now combine a network of journalists, grassroots, watchdogs and think tanks. Their action combines a coordinated effort to change the expectations of citizens and put consistent pressure on decision-makers, while working with the government to improve good governance.

The EU can facilitate a similar effort to help journalists and civil society bring as many cases as possible to the prosecution and attain public attention. This could limit the opportunity of the judiciary to ignore cases.

The EU must work more intentionally with politicians delivering changes in practice and not on paper

The presence in the field is also an essential part of such engagement. This is where the EU and civil society actors have shown success. For instance, civil society significantly helped the development of a more independent anti-corruption commission.

Examples also include improvements in fiscal transparency and the open treasury ledger, which increased public spending information – something the previous government explicitly refused to do.10  The EU provided technical assistance in many areas as well, along with reforms in the public administration and parliament.

But one aspect here needs to be seriously taken into account. The EU must work more intentionally with politicians delivering changes in practice and not on paper. By working with officials appointed because of their loyalty to a political party, the EU reinforces their legitimacy and silently accepts this bad practice. And such a method is fundamental to persistent risks of future capture of institutions.11

Conclusion
The uncertainty of North Macedonia's accession process negatively affects the EU's leverage to assert its influence in improving governance. In turn, this affects the already fragile reform process.

Despite that scenario, the EU and North Macedonia should not rush reforms between meetings of the General Affairs Council. Instead, the EC could refocus its policies more explicitly on societal processes supporting collective action against corruption and improving the judiciary. If EU accession is an infeasible option in the upcoming period, such support can decrease potential backsliding and build sustainable changes.

On the institutional side, the EU should support a reform package in good governance founded on diagnostics and institutional and sectoral assessments. This will ensure that reforms have a logical sequence and continuous organisational rearrangements will not diminish the foreign aid investment in the public administration.

• 1European Commission, ‘Country Report: Former Yugoslav Republic of Macedonia’, 2015.
• 2For a longer discussion of state capture in Southeast Europe, please see: the Center for the Study of Democracy, ‘State Capture Assessment Diagnostics’, 2019.
• 3European Commission, ‘Key findings of the 2020 Report on North Macedonia’, 2020.
• 4For more information on the relationship between the EU integration process and judicial reform in North Macedonia, see: Denis Preshova, Ivan Damjanovski & Zoran Nechev, ‘The Effectiveness of the ‘European Model’ of Judicial Independence in the Western Balkans: Judicial Councils as a Solution or a New Cause of Concern for Judicial Reforms’, CLEER Paper Series, T.M.C. Asser Institute for International & European Law, 7 February 2018.
• 5Andrew Gardner, ‘Wire-tapping scandal hits Macedonia’, Politico, 2017.
• 6‘Recommendations of the Senior Experts' Group on systemic Rule of Law issues relating to the communications interception revealed in Spring 2015’
• 7Adam Fagan & Gjuzelov Borjan, ‘Backsliding, weak implementation, or failed institutionalization? Judicial Reform in North Macedonia and Serbia’, 2019.
• 8 ‘Chapter Anti-Corruption’, in: Blueprint for Urgent Democratic Reforms, 2016.
• 9Wouter Zweers & Ardita Abazi Imeri, ‘Avoiding another Déjà Vu for North Macedonia’, The Clingendael Institute, 2019.
• 10This was funded by the International Republican Institute.
• 11Solveig Richter & Wunsch Natasha, ‘Money, power, glory: the linkages between EU conditionality and state capture in the Western Balkans’, Journal of European Public Policy, vol.27, no. 1, 2019.