Chapter 8 Competition policy of the EU acquis is of essential importance for the functioning of a free market economy, where free competition and state aid control stimulate economic performance and offer to consumers a broader choice of better-quality products and services at more competitive prices. In 2010, North Macedonia enacted a Law on State Aid Control followed by a Regulation on the conditions and procedure for granting aid of minor importance (de minimis) – referring to small amounts of state aid to undertakings that do not have to be notified. However, due to recent legal developments in the EU context, the enacted law needs to be amended.

UNOPS has supported North Macedonia to achieve further alignment with the EU latest acquis in the area of state aid control – particularly as regards the conditions and procedure for granting aid of minor importance (de minimis).

The UNOPS advisor conducted desk research to analyze the current state in the area of state aid control and to prepare the methodology for drafting the by-law. This encompassed review of the Law on State Aid Control currently in force, as well as the existing by-laws adopted on the basis of the Law. Compliance check was conducted on alignment with the EU acquis on de minimis state aid, and recommendations were made to improve alignment.

On that basis, the UNOPS expert has supported the development of a draft By-law (Regulation) on aid of minor importance (de minimis) that would be further aligned with the EU acquis. The by-law on de minimis aid regulates small amounts of state aid which are exempted from state aid control since they are deemed to have no impact on competition and trade in the market. The maximum amount is EUR 200 000 for each undertaking over a 3-year period.

As a result, the Regulation on aid of minor importance has been drafted, accompanied by a Table of Concordance and a Justification for adoption of the Regulation demonstrating the level of (full) alignment with the EU acquis.

The work of the K4R programme supports alignment with the EU latest acquis on the state aid control, advancing negotiations for Chapter 8 Competition policy, while focusing on implementation of the national legislation and creating a credible enforcement record for Chapter 8. The enforcement of competition policy including state aid control is of utmost importance for the functioning of the free market, with broad impact on businesses and the well-being of the population – particularly in reducing poverty and exclusion. It advances free and accessible markets and makes markets work for people.

Finally, alignment in this regard means increased transparency of state aid granted by the government, and it supports reduced inequalities and increased prosperity, while also promoting environmental and social priorities. The work promotes sustainable development as it ensures that public funding will be channeled to businesses that are sustainable and willing to invest and to be monitored as sustainable investments – bearing in mind environmental and social priorities.

EU state aid policy alignment for North Macedonia has a significant contribution towards the achievement of multiple SDGs – SDG 1: No Poverty, 2: Zero Hunger, 3: Good Health and Well-Being, and partially SDG 8: Economic Growth, 9: Innovation, 10: Reduced Inequalities and 17: Partnership for the Goals – with core impact on reducing poverty/hunger and inequality/exclusion.

The assignment also indirectly contributes toward SDGs related to environmental protection as state aid is directed toward environmental and social priorities and sustainable investments.