Opposition’s and government’s supporters clashed in the front of the Parliament in a row over the 2013 budget. The opposition left-wing Social Democrats claimed that the budget will increase the country’s debt burden and accused the government of planning spending for grandiose monuments, expensive cars and furniture. Opposition MPs and journalists were removed from the Parliament before the budget was approved by the ruling coalition formed by the rightist Democratic Party of Macedonian National Unity and the Democratic Union for Integration, representing the Albanian minority. As a result, the opposition initiated a campaign of civil disobedience and protesters rallied in front of the rightist ruling party demanding the resignation of Prime Minister Nikola Gruevski and early elections. The next parliamentary elections are due in 2015.

Impact on country risk

FYR Macedonia’s political scene is frequently unstable and ethnically divided. In this context, the budget vote is used by the opposition to spark public protests but is unlikely to bring down the government. On the economic front, growth has slowed in 2012 to less than 1% compared to 2011 when it reached 3.2% as exports to the European Union – the country’s main trade partner - slowed. GDP growth is expected to reach around 2% this year.

Analyst: Pascaline della Faille, p.dellafaille@credendogroup.com