From Ohrid to Amsterdam and Helsinki flights will start in 2011

Flights from Ohrid St. Paul the Apostle Airport to Amsterdam and the Finnish capital Helsinki will commence in 2011. The Turkish based Corendon Airlines will operate scheduled charter flights from Ohrid to Amsterdam from May until the end of October. The airline will use one of its Boeing B737-800s on the route and will carry out 46 flights between the two cities. Corendon operated flights from Antalya to Skopje during the 2010 summer season.

In 2011, Macedonia will see its first direct flights to Finland, the head of Macedonia's Agency for Tourism Support and Promotion announced last week. While the airline that will operate the flights is yet to be named, they are scheduled to run from May until the end September. Both of the abovementioned services are expected to carry Dutch and Finnish tourists to the Macedonian resort town.

Both Skopje and Ohrid airports will end 2010 on a high. The Turkish operator TAV has taken control of both airports and construction on a new terminal in Skopje and the expansion of the existing terminal in Ohrid are underway. Furthermore, both airports have recorded a significant increase in passenger numbers. A month ago, the Skopje based Mat Airways began scheduled charter flights. The airline operates one weekly flight from Skopje to Berlin, Ancona, Verona and Copenhagen, two weekly flights to Rome and Dusseldorf and four weekly flights to Zurich. From Ohrid, the airline serves Zurich once per week.

News source: EX-YU Aviation link: article

CNBC: "Macedonia among ten hottest destinations for 2011"

FYRMacedonia is ranked among the ten hottest destinations to visit in 2011 according to U.S. Business Magazine, part of the CNBC network.

"Macedonia has long been an under-the-radar sort of tourist destination. Though the capital, Skopje, has a certain ramshackle Ottoman charm, its Lake Ohrid, on the border with Albania, which most visitors reserve the superlatives for. Think of Lake Como with hubble-bubble pipes and exquisite waterside Orthodox churches and you come close to the unique spirit of this geologically ancient body of water. Ohrid, the delightful main town, is developing a cool summer eating, drinking and partying scene. Now run by expanding Turkish operator TAV, both Skopje and Ohrid airports are due to be modernised in the near future", says the Business Magazine.

Other destinations recommended are Florianopolis (Brazil), Belgian city Antwerp, Colombia, Algeria, Syrian capital Damascus, Kalpitya Peninsula (Sri Lanka), Basilicata (Italy), Chicago and Taiwan.

News source: EMG.rs link: article

FYROM: Entrepreneurs of the year 2010 announced at ceremony

Macedonia's Association of Chambers of Commerce announced Monday the best entrepreneurs for 2010 in the categories of micro and small enterprises. In the category micro enterprises, entrepreneur of the year is Filip Arsov - owner of Synapse Digital Agency, while Ivica Lukanoski, who owns a private dental office, came second. In the category small enterprises, the top prize was awarded to Zoran Mirsinov, manager in Veles-based Mirana food enterprise, and Bojan Panovski - a manager in Forca sports center in Skopje - was second.

The selection was made out of 142 micro and small enterprises that have made growth in terms of personnel, revenues, profit and investments between 2007 and 2009. Minister of Economy Fatmir Besimi at Monday's awards ceremony said that micro, small and medium enterprises were an important sector in Macedonia's economy. "Figures from 2009 compared to 2008 show that small and medium enterprises are making headway, which is an encouragement for our economy. In the future, this sector will be of great importance for Macedonia's economy," Besimi said.

"Entrepreneur of the Year" manifestation is organised four years in a row by the Association of Chambers of Commerce, Center for Entrepreneurship and Executive Development - CEED Macedonia, Macedonian Development Foundation for Support of Entrepreneurship, Chambers of Commerce of Northeastern Macedonia with support provided by the Economy Ministry. Last year in Macedonia, 44,567 micro, 16,179 small and 516 medium enterprises were registered, according to data of the Central Register. 

News source: EMG.rs link: article

EBRD is considering providing co-financing for a new section of Corridor X from Smokvica to Demir Kapija

The EBRD is considering providing co-financing, together with the European Union’s Instrument for Pre-accession (‘IPA’) and the European Investment Bank (‘EIB’) for a new section of Corridor X from Smokvica to Demir Kapija which has a total length of 28 km. This forms part of the key section of this north-south link running from Austria, through South East Europe, to Greece. In addition, the project will also finance toll stations and the necessary electronic tolling facilities along Corridor X.

The investment is required to meet the growing traffic demand and to facilitate achievement of full motorway standard, thus, ultimately, facilitating regional integration and connectivity with the wider Europe.

Building on initiatives through previous Bank projects, the project will facilitate further reform in the roads sector through:

• The introduction of electronic tolling.
• The introduction of performance based maintenance contracts; and
• The definition of key milestones required for the concessioning out of road Corridor VIII to a private operator.

Agency for State Roads (‘ASR’), which is an independent state owned agency responsible for the operation and maintenance of the road network in the FYR Macedonia.

€107 million senior loan to the government of FYR Macedonia, represented by the Ministry of Finance (‘MOF’). The total project cost is €316.9 million, with EBRD providing loan funding of up to  €107 million.

Project screening and categorisation

The project is categorised “A” as it could result in potentially significant adverse environmental and/or social impacts which cannot readily be identified or assessed:

(a) Construction of Project will involve environmentally sensitive activities such as tunnelling in the Demir Kapija canyon
(b) The available EIA lists a number of sensitive issues (see below)

Main environmental and social issues

Sensitive habitats have been identified in the Macedonian Environmental Impact Assessment (EIA) and include mainly:

• The Demir Kapija canyon, with several species of raptors, vultures and bats listed as “vulnerable” or “endangered”
• The plane and willow gallery forests predominantly located along the right bank tributaries intersected by the trace, and the maquis and pseudo-maquis habitats on the plateaus.

Any surface deforested as a result of the project will be compensated by plantations of an equivalent surface in adjacent areas that have already been identified in detail.

The Project does not affect any residential structure.  It affects some agricultural and pasture land in the Vardar valley towards the villages of Miravci and Smokvica (mainly open field with some orchards and vineyards).

The proposed route is generally well away from settlements; however, noise protection will be needed locally, as well as re-establishment of local roads and agricultural tracks in the Vardar valley between Mitrevci and Smokvica.

As for any project of this nature, construction impacts will include noise, dust, vibration, severance of local traffic and waste / spoil management. The balance of material is positive due to some significant tunnelling and a disposal area has been identified and permitted for excess spoil. Obligations in respect of construction phase environmental management will be shared between the borrower and the contractor and an environmental monitoring plan and management system will need to be put in place.

News source: EBRD link: article

Bulgaria, Serbia snatch Macedonian winter tourists

Tourist officials complain of losing the battle over Christmas holidays, with more and more Macedonians shunning domestic resorts. Macedonian tourists are shunning holidays at home for the winter resorts of nearby Bulgaria and Serbia, the head of the Hospitality and Tourism Chamber, Snezana Jovanovska, told Balkan Insight. The tourist boss said the trend was even more pronounced this winter, now that Macedonians can visit EU countries without having to apply for visas.

"The resort of Bansko in Bulgaria is by far the most attractive winter destination this year," she noted. "People can find accommodation there for as little as 100 euros per week so they see no reason to stay in the country," Jovanovska added. Serbia’s Kopaonik mountain resort is also a hit among Macedonians, while those with more money are seeking arrangements in Austria and Italy, she continued.

“Macedonian ski resorts offer less and charge the same [as foreign resorts], so they are not very attractive for domestic and foreign tourists alike," she admitted. ”The better skiing facilities in neighbouring countries, the greater variety there and [lack of] entertainment [here], all deter tourists from our ski resorts," Jovanovska lamented. Officials from Mavrovo, one of Macedonia’s biggest ski resorts, said they hope lower prices will attract more tourists. Depending on the quality of accommodation, beds there cost 10 to 30 euro per night. Officials say they have halved the cost of ski passes to 160 euro for six days.

“Younger people who cannot afford to travel abroad come here but they only stay for the weekend in cheaper private accommodation, while the hotels stay empty,” one said. Local tourist officials say overall interest in winter holidays among Macedonians has declined by 50 per cent this year, compared to last year. Jovanovska blamed worsening poverty and the global economic downturn for this trend.

News source: Balkan Insight link: article

Industrial producer price indices on the domestic market, November 2010

According to the State Statistical Office data, the Industrial producer prices on the domestic market in November 2010, in comparison with November 2009, increased by 7.1%. This increase, first of all, is a result of the increased prices in Energy by 11.4%, Intermediate goods industries, except energy by

5.8%, Capital goods industries by 3.1%, Durable consumer goods industries by 7.7% and Non-durable consumer goods industries by 3.7%.

The Industrial producer price index on the domestic market in November 2010, in comparison with November 2009, in the section Mining and quarrying increased by 3.0%, in the section Manufacturing industry the price index increased by 7.3%, and in the section Electricity, gas and water supply it increased by 6.6%. In November 2010, in comparison with November 2009, the index of the prices in the group Builders' carpentry and joinery increased by 5.8%.

News source: State Statistical Office link: publication

 

Minister Besimi presented to the European Diplomatic Corps the results of the presidency of the Republic of Macedonia with the European Community

Today in the Secretariat of the Energy Community in Vienna, the Minister of Economy Fatmir Besimi participated on the 2-nd Briefing of the European Diplomatic Corps in the Energy Community that during the afternoon continued with marking the “Macedonian Energy Day” in the honor of the presidency of the Republic of Macedonia with EC.

In his welcome address in front of diplomats from 50 countries, including those of the European Commission, Minister Besimi presented the results of the presidency of the Republic of Macedonia with EC: “This year beside the enlargement of EC with Moldova and Ukraine and the status of Armenia as country-observer, the countries confirmed the aspirations for Euro-integrations with intensive and hard work into direction of harmonization of the national legislation with the European. The countries dedicated special attention to the modernization of the existing energy infrastructure and the preparation activities for establishment of new ones”.

Minister Besimi, pursuant the determined priorities on the last meeting of the Ministerial Council in Skopje, emphasized that the focus of the attention during the next period will be directed towards development of the energy market, energy efficiency and renewable sources of energy, as well as, strengthened activities into context of the oil dimension. Therefore, pursuant Besimi, it is necessary deepening of the cooperation of the countries from the region, creation of joint energy market that will strengthen the security of the energy supply and which will contribute for the economic development of the region and the raising of the living standards of the population.

The “Macedonian Energy Day” within the frames of the EC Secretariat was motive for discussion about the priorities, policies, measures and undertaken reforms by the Republic of Macedonia in the energy sector as well as, the challenges for the period to come. Beside the review of the results of the Energy Community during 2010 and the planned activities during the next 2011, on this meeting were reviewed also the energy policy and the investment development of the Republic of Macedonia with special accent on the investment activities and projects that are into phase of realization.

News source: Ministry of economy link: article

 

EBRD is considering to provide co-financing of a new 28 km section of Corridor X from Smokvica to Demir Kapija

The EBRD is considering to provide co-financing, together with the European Union’s Instrument for Pre-accession (‘IPA’) and the European Investment Bank (‘EIB’) of a new 28 km section of Corridor X from Smokvica to Demir Kapija with a total length of 28 km.  This forms a key section of this north-west link which links Austria to Greece.

The investment is required to meet the growing traffic demand and to facilitate full motorway standard thus, ultimately facilitating regional integration and connectivity with the wider Europe.  

Main environmental and social issues described in the ESIA documentation include:

• Biodiversity: sensitive habitats have been identified and include mainly the Demir Kapija canyon, the plane and willow gallery forests and the maquis and pseudo-maquis habitats on the plateaus.
• Social and Land Acquisition: while the Project does not affect any residential structure, it does impact some agricultural and pasture land in the Vardar valley towards the villages of Miravci and Smokvica. The proposed route is generally well away from settlements; however, noise protection will be needed locally, as well as re-establishment of local roads and agricultural tracks in the Vardar valley between Miravci and Smokvica.
• Construction impacts: they will include noise, dust, vibration, severance of local traffic and waste / spoil management.
  The ESIA and ESAP

The Macedonian Government had since 2007 developed an Environmental Impact Assessment (EIA) in compliance with the local legislation, which is modelled on the EU EIA Directive. It was updated twice in March 2008 and July 2009. Two successive rounds of public consultation took place in the Project area in 2009 and 2010. Following this process the Project was duly permitted by the local Competent Authority.

Some limited gaps in the existing documentation have been identified against the EBRD 2008 Environmental and Social Policy.

News source: EBRD link: article

IMF Managing Director Dominique Strauss-Kahn Welcomes Former Yugoslav Republic of Macedonia’s Interest in Precautionary Credit Line Arrangement

Mr. Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), made the following statement today:

“I welcome the decision by the Former Yugoslav Republic of Macedonia to request a Precautionary Credit Line (PCL) arrangement. Macedonia would be the first IMF member to take advantage of this new arrangement. I am very pleased by this positive response from Macedonia to the invitation I extended to economies with sound economic fundamentals and policies to use this new instrument to bolster international confidence.

“Macedonia has a sustained track record of sound economic policies. Its economic fundamentals and policy framework are strong, and the Macedonian authorities have demonstrated a commitment to maintaining this solid record. I therefore intend to move ahead rapidly in seeking approval by the Fund's Executive Board of Macedonia's request for a PCL arrangement.” The Former Yugoslav Republic of Macedonia requested a two-year arrangement under the IMF’s Precautionary Credit Line (PCL) in the amount equivalent to SDR 344.5 million (approximately €400 million, 500 percent of quota) in the first year, rising to SDR 413.4 million (approximately €480 million, 600 percent of quota) in the second year.

The PCL is an instrument established earlier this year that is available to Fund members with sound economic fundamentals and policies that do not have actual financing needs but face risks that could give rise to such needs. Thus, countries with PCL arrangements would be expected not to draw upon the available funds unless there is a deterioration in external conditions. The PCL arrangement provides countries with confidence that in the event of adverse developments they have a deep reservoir to draw upon to preserve stability. Moreover, having a PCL arrangement in place should help to strengthen confidence and facilitate better access to private capital markets.

News source: IMF link: article

Consumer Price Index Macedonia, by COICOP classification, November 2010

According to the State Statistical Office data, the Consumer Price Index, measured by prices of goods and services for personal consumption, in November 2010, in comparison with October 2010, was 100.4, while in comparison with November 2009 it was 102.9.

Analyzed by main groups of intended use, in November 2010, compared with October 2010, an increase has been registered in the groups: Miscellaneous goods and services by 0.8%, Furnishings, household equipment and routine maintenance of the house and Recreation and culture by 0.7%, Food and non-alcoholic beverages by 0.5%, Transport by 0.4%, Housing, water, electricity, gas and other fuels by 0.3%, Clothing and footwear and Restaurants and hotels by 0.2%.

A decrease of the Consumer Price Index was registered in the group Communication by 0.1%. The indices of the groups: Alcoholic beverages, tobacco, Health and Education remained at the same level as in the previous month.

News links:  State Statistical Office link: publication

Macedonia Pushes Forward With IMF Loan Plan

Macedonia is likely to finalize talks this week on a €400 million loan from the International Monetary Fund aimed at filling the country’s budget gap. Macedonian Finance Minister Zoran Stavreski confirmed on Monday that the country and the IMF are getting closer to a deal, explaining that he will hold a round of meetings with IMF representatives who are in the country in the coming days. The two-year loan with an annual interest rate of 1.3 per cent “will be at least €400 million”, the minister told reporters. While it is almost certain that Macedonia will take the loan, the Finance Ministry plans to keep its options open.

“We might not start spending the money right away,” Stavreski explained. “If the conditions on the global market are favourable, Macedonia could issue Eurobonds” to fill the budget gap and ”if not, we can start using the IMF loan”. Minister Stavreski also noted that some of the IMF money might be used for capital investments. Over the past two years several local economic experts have advised that the government strike a deal with the IMF because of the lower interest rates.

However, the government has insisted on issuing state bonds that, while more expensive to pay back, give the state an open hand in its spending policy. The local economy has been hit hard by the global financial crisis, and the state has struggled to collect planned revenue which has created problems for the budget. The country's flagship metal industry and all other export oriented industries have suffered in particular. The government plans to keep the budget deficit at some €180 million in 2011, or 2.5 percent of the GDP.

News source: BalkanInsight link: article

FYROM: Inflation rises by 2.9 pct y/y in November

The State Statistics Office said on Wednesday that FYR Macedonia's November consumer price index (CPI) rose by 2.9% year-on-year after an annual increase of 2.7% in October, according to SeeNews.

On a monthly basis, CPI rose by 0.4% in November, after increasing 0.3% a month earlier, the statistics office said in a statement.In November 2009, Macedonia's CPI fell by 2.3% year-on-year and added 0.3% on the month. 

News source: Balkans.com link: article

Skopje Urban Transport Project - project implementation support

The City of Skopje is the capital city of Macedonia with a population of 700,000 people. Being the leading economic centre of the Country, the City's main investment priority is to improve its transport infrastructure. The City has requested the EBRD to finance: the introduction of an automated traffic management system being planned by the City; and the reconstruction of Privomalska Street, a critical urban corridor that connects downtown with the southeast part of the City. The investment project's objectives are to enhance the mobility of Skopje's residents and to ease congestion. The first component is focused on the implementation of the planned traffic management system designed under the EU-funded Renaissance Programme. Several items will be introduced to achieve significant improvement of traffic flow throughout downtown Skopje, including a fully equipped traffic control centre, dynamically controlled traffic light controllers, a CCTV network, road side units to measure traffic flow, electronic variable message signs, all hardware and software, and a fibre-optic network to connect all the subsystems to the traffic control centre.

The second component of the project is the rehabilitation of a critical 2.5 km segment of Privomalska Street, an important corridor leading out of the City centre to the southeast. The procurement for the above components will be made through open tendering procedures in accordance with EBRD Procurement Policies and Rules. The selected consultant will assist the City with the prequalification and finalisation of tender documents. The draft tender documentation prepared by the City will be made available to the Consultant in English and Macedonian for review and update, as necessary. The City also requires assistance with the evaluation of the tenders and the preparation of the evaluation report in order to ensure that these are executed in line with the EBRD Rules and Guidelines. The Consultant must work closely with the City's Traffic Department and Urban Department, as well as the City’s Project Implementation Unit, to ensure that these services are effective and the final product is of high quality.

The objectives of the assignment are to provide support to the City in the procurement and supervision of all project contracts, as these relate to: (a) Prepare a set of technical specifications for the traffic management system and road rehabilitation based on the existing design, suitable for international tendering; (b) Develop a procurement strategy to design, supply and installation of the system and its short-term and long-term maintenance; (c) Assist with project implementation, including procedural and reporting requirements to the EBRD, procurement and contract management and engineering supervision as Engineer or Project Manager under the applicable terms of contract. This support should help ensure a timely implementation of the investment project.

News source: EBRD link: article

New project for Prishtina-Skopje highway completed

The French "EGIS BCEOM International" has submitted the detailed project for the Prishtina-Skopje highway to the Kosovar Ministry of Transportation. The construction of the 55-kilometers highway is planned to be done through public-private partnership. "We are among the best infrastructure companies in the world and have planned and constructed a large part of the highways in France”, said the representative of EGIC BCEOM.

The highway will be constructed in a completely new track, while maintaining existing road.
Raiffeisen Kosovo cuts interest rates for 2% The Austrian owned Bank Raiffeisen Kosovo has cut interest rates 2 percent for mortgage loans and renovation.

According to chief executive Robert Wright, the reduction of these loans from 11 to 9% is a good opportunity for customers to invest in buying and renovating their houses or apartments. He expects this to positively influence the mortgage market in Kosovo. Wright has also introduced the "financial mosaic”, which includes four financial products such as personal loans, over draft, credit card and loan repayment insurance. Raiffeisen Kosovo is one of the two largest banks in Kosovo. 

News source: EMG.rs link: article

European Parliament discusses Macedonian media freedom

This week's meeting of deputies from the European Parliament and their Macedonian counterparts was dominated by the state of freedom of expression in Macedonia. The sensitive discussions follow the European Commission's strong criticism of media freedom in the country in its latest progress report published in November. The meetings of the joint parliamentary committee, which reviews Macedonia's progress towards EU accession twice a year, are meant to improve co-operation between the two sides. The country has been a candidate since 2005 but has still not started accession talks due to an ongoing name dispute with Greece.

The committee meetings are usually dedicated to discussions about Macedonia's reform efforts. This time, however, European deputies were more interested in an incident that had taken place in Macedonia the week before. MEPs asked for an explanation of the police raid of A1 TV station in the country's capital Skopje. The broadcaster is known to be critical of the government. There were reports that the freedom of movement of journalists working at the station was restricted and that violence was used. Greek deputy Anni Podimata held that the right to criticise the government was legitimate and had to be respected. She recalled that Macedonian prime minister Nikola Gruevski had qualified A1 and other media as "megaphones of the opposition" in October. She also said a TV presenter in Kanal 5 TV had publicly called for the physical elimination of people he considered "traitors" to the nation. Ms Podimata said the event was condemned by the International Federation of Journalists and wanted to know what the government was doing to address the problem.Vasko Naumovski, vice-president of the Macedonian government, was present at the session and gave his version of events. He said nobody was controlling A1 and that the targets of the raid conducted were companies with addresses in the same building. The companies were suspected of tax evasion and money laundering, he explained.

"The assistance of the police was given in response to a request by the financial police," said Mr Naumovski, adding that the police would have acted in the same way if the BBC or CNN had been in the same building. Representatives of the Macedonian opposition who were present at the commmittee did not agree with this explanation, contending that the broadcaster was also a target.Macedonian deputy Vlatko Gjorcev, a member of the governing conservative VMRO-DPMNE, tried to divert the focus of the discussion. He repeated insults to the EU ambassador to Macedonia, Erwan Fouere. In an opinion piece that had appeared in a Macedonian newspaper a few weeks earlier, Mr Gjorcev had attacked Mr Fouere. "Unfortunately, Fouere is not a promoter of European values but an ordinary ideological party megaphone ... He is not a totem nor protected deity but an ordinary bureaucrat. Our people are already fed up with him," Mr Gjorcev had written. During the committee session, Mr Gjorcev accused Mr Fouere of not being diplomatic and said that he was too involved in political life, sided with the opposition and was too present in the media. The co-president of the committee, German liberal MEP Jorgo Chatzimarkakis, closed the session saying he felt it his duty to defend the ambassador who speaks on behalf of the EU. Mr Chatzimarkakis strongly condemned Mr Gjorcev's words.

"This behaviour is contrary to the Vienna Convention for diplomats," said Mr Chatzimarkakis. "The country needs to protect the dignity and personality of diplomats. There's a big difference between attacking diplomats, especially diplomats who are trying to put your country on the path of integration. Instead of thanking them you attack them. I want to strongly condemn this behaviour."

Mr Chatzimarkakis added that the Macedonian prime minister had defended his party member Mr Gjorcev when he was confronted about the derogatory remarks about Mr Fouere. Aleksandar Spasenovski, Macedonian co-president of the committee, tried to defend his colleague on behalf of his party VMRO-DPMNE, saying that Mr Fouere had a positive role in Macedonia. Yesterday evening, however, the president of the Macedonian Parliament Trajko Veljanovski said he was convinced Mr Gjorcev acted to protect the interests of the Republic of Macedonia.

News source: waz.euobserver.com link: article

Germany assists FYR Macedonia hydropower and wind farms development with 60 million EUR loan

Germany has peldged to help the FYR Macedonia energy market through loans signed this week amounting to 60 million which will be placed though KfW bank. The loans will be used to fund rehabilitation of hydropower plants in Globocica, Tikves Vrutok, Raven, and Vrben Shpilje and the rest to build windmills in Bogdanci.

This a step ahead for the Government towards achieving the set targets for increased use of renewable energy sources, improve energy efficiency and reducing dependence on imported electricity energy said FYR Macedonia's Deputy Prime Minister and Finance Minister Zoran Stavreski after signing the agreements. The project for wind envisions a fleet of wind plants which will reach an annual production of 100 gigawatt hours.Bilateral cooperation between Germany and FYR Macedonia aims to improve economic and social development of FYR Macedonia. Today's event is one step in our joint efforts to improve the lives of citizens in FYR Macedonia, said German Ambassador Knotz. 

News source: Balkans.com link: article

Illyrian Airways to launch flights

A new Priština and Skopje based airline, Illyrian Airways, will commence scheduled flights from December 18 to several Italian cities. The airline recently received a Boeing B737-300 and an Embraer E145 jet, with which it will operate its initial route network. The airline also plans to introduce a Boeing B737-500 and another E145 at a later stage.

Illyrian Airways will inaugurate services with flights from Priština to Brescia and Treviso in Italy and from Skopje to Treviso on December 18. On December 24, the airline will commence flights from its two bases to Rome. On December 24, Illyrian Airways anticipates to launch 1 weekly flight to Antalya. Most other flights will operate twice per week.

Yesterday, Illyrian Airways arranged a promotional flight between Priština and the Albanian capital Tirana. Whether Illyrian Airways will be successful or not remains to be seen. Several previous airlines based in Priština, such as Kosova Airlines and Air Prishtina, suspended services over the past few years.

News source: EX-YU Aviation link: article

Macedonia's high property prices refuse to come down

The global financial crisis and the country’s political stalemate have not reversed the steady climb in real estate prices. A square metre in a flat in the Macedonian capital, Skopje, still sells for between 1,000 and 1,500 euro, statistics show, making purchase of a home for people on average salaries of about 330 euro a month almost impossible. Real estate agencies say prices of flats are staying high in Macedonia, despite the sluggish demand. "We're having hard time selling flats and houses because only those who have to buy are actually deciding to buy," Marija Todorova, from the Avenija real estate agency, told Balkan Insight. "The rest are waiting for prices to drop."

The agency said that only small flats of below 50 square metres sold relatively well, because many people cannot afford anything bigger. Real estate prices jumped two years ago on the eve of the 2008 NATO summit in Bucharest, Romania. In expectation of joining the Alliance at the summit, confidence grew in the country and real estate prices soared accordingly. However, prices failed to come back down after Macedonia left the NATO summit empty-handed because of its unresolved dispute with neighbouring Greece over its name, which Athens objects to.

Even the global financial crisis has not dampened prices. Data from Macedonia’s Chamber of Commerce show they have continued to grow, albeit slowly. The Ministry of Transport, in charge of financing social housing, hopes to reduce real estate prices by offering more state-built apartments. This month, authorities began construction of a new complex of social housing in the capital, comprising 14 new buildings. At the groundbreaking ceremony, Minister Mile Janakieski expressed hopes that the increased availability of social housing “will dampen average prices and so eventually make housing available to the broader population".

Some construction companies say they have to keep prices of private homes high because building materials are more expensive than they were. "The price of iron, concrete, plaster and other materials is relatively high on world markets, which has increased our construction costs and dictates the [high] prices," Naum Sotirov, a construction engineer for one local construction company, told Balkan Insight. The daily "Utrinski Vesnik" has calculated that it would take 155 average salaries, or 13 years' worth of salaries, for a worker on average pay to amass the 52,000 euro needed to buy an apartment of 60 square metres.

News source: BalkanInsight link: article

FYROM: Credit growth rate is expected to accelerate to 9.4% in 2010

Credit growth in Macedonia is expected to spike in 2010 and 2011 as local lenders step up their product launches. The country's credit growth rate is expected to accelerate to 9.4% in 2010 as the banks' loan portfolio has already risen by an annual 7.7% to 188.6bn denars ($4.1bn/3.1bn euro) at the end of the third quarter, the Macedonian National Bank, NBRM, said earlier this month.

The loan portfolio of domestic banks grew by only 3.5% in 2009 to 178.2bn denars after a torrid 34.4% growth in 2008. The acceleration of the pace of lending after last year's slowdown is spurred by expectations for higher deposit levels and increased demand for loans, NBRM said in its 2011 macroeconomic forecast.

The central bank has forecast a credit growth of 12.1% for 2011, based on an outlook for improved macroeconomic conditions, higher consumption and lower lending risk.

New loans will be financed mainly by the increase in deposit volumes whereas the rise in private sector deposits is fuelled by the pick-up in economic activity, the central bank said.

Deposits with Macedonian banks rose by 14.4% on the year to 203.6bn denars at the end of September.

At the same time, NBRM expects the country's economy to grow by 2.0%-3.0% in 2011 after it projected a growth of 0.6% for this year. A total of eighteen banks operate in Macedonia, a country of 2m people.

Some of the mid-sized players are raising the ante in the competition with their brawnier rivals by launching new loan products while others have cut interest rates and raised deposit rates in a bid to attract clients and improve their market position.

Earlier this month, Izvozna i Kreditna Banka (IK Banka) signed a 5m euro loan agreement with the Green for Growth Fund Southeast Europe for energy efficiency projects. It makes IK Banka the first bank in Macedonia to sign a loan with GGF and the first to offer household loans for such projects.

These types of loans were previously not available or were accessible only for large companies, IK Banka's chief executive director Yucel Inan said at the signing ceremony. We have increased our lending activity in 2010 and we will continue to provide new and sophisticated offers to our clients in all segments," Inan said.

IK Banka is majority-owned by Netherlands-based Demir-Halk Bank. Sparkasse Banka Makedonija, part of Austria's Steiermarkische Bank und Sparkassen, recently launched a new loan product aimed at the farming sector.

The size of the loans ranges between 100,000 and 700,000 euro. The interest rate for loans with a foreign currency clause varies between 4.0%-5.0% while for loans denominated in euro and denars the rates are set at 8.45% and 13%, respectively. The repayment period is up to seven years with a three-year grace period.

Going forward, loan conditions will be eased while lending support for the economy will strengthen, Sparkasse Banka managing board president Srgjan Krstic told Skopje-based daily Utrinski Vesnik in a recent interview.

This is noticeable in the increased supply and demand for loans, lower risk in the real economy and stronger competition among banks attempting to raise their market share, he told Utrinski Vesnik.Skopje-based ProCredit Bank recently cut the interest rates of loans for micro businesses by 1.0%-5.0% and extended the repayment period to 60 months in a bid to support their growth, the bank's general director Jovanka Joleska Popovska said in a statement sent to SeeNews. In an attempt to boost its deposit base, one of the country's smaller lenders, Univerzalna Investiciona Banka, is offering an interest rate of 8.88% for one-year time deposits, much higher than its bigger rivals. At the same time, the three biggest banks in Macedonia, Komercijalna Banka, Stopanska Banka and NLB Tutunska Banka, offer one-year time deposits in the local currency at rates of 7.3%, 7.2% and 7.2%, respectively.One-year time deposits in euro at Komercijalna, Stopanska and NLB are offered at rates of 4.0%,4.85% and 4.0%, respectively.

News source: Balkans.com link: article

Macedonia mulls amnesty for cash sent abroad

Authorities consider turning a blind eye to untaxed cash in order to ensure the return home of some of the money that has left the country over the past two decades. Macedonia's finance ministry says it will consult experts over whether money that ended up in foreign bank accounts during the the 1990s and afterwards can be lured home to speed up economic development.

'The idea a so-called ‘tax amnesty’ has positive and negatives sides to it," the office of the Deputy Finance Minister, Nedim Ramizi, told Balkan Insight. "We plan to consult experts before reaching any decision on this concept and its possible effects." The head of Macedonia’s Public Revenue Office, Goran Trajkovski, proposed the idea of a "tax amnesty" last week. Trajkovski estimated that between 6 and 15 billion euro had left the country as a result of the privatization of former state-owned firms. Many who profited from these sales sent their money abroad, fearing criminal charges or tax bills.

Trajkovski argued that the economy could profit significantly if only a portion of this money that "is now helping some foreign economy and not ours" was tempted home. Before the centre-right VMRO DPMNE-led government took office, the now opposition Social Democrats mulled similar steps before the 2006 general elections. However, after the party lost the elections the idea was dropped. The Finance Ministry said it would look at the examples of other countries that have proclaimed similar amnesties, such as Italy or Belgium, to see how much money they managed to bring home.

Macedonia’s annual budget in the past few years has averaged about 2.2 billion euros. Amid the global economic downturn, the country has struggled to collect enough revenue to fill a yawning current account gap. The level of Foreign Direct Investment has fallen sharply recently. The vale of FDI in 2009 was only half the value of the figure in 2008, when FDI totalled 500 million euro. Official figures for this year show no significant improvement on 2009.

News source: BalkanInsight link: article