EU Growth Plan and North Macedonia, interview with Steffen Hudolin on reforms and financing: The funds are transferred after the reforms are implemented
750 milion euros from the EU’s Growth Plan for reforms are planned for North Macedonia. However, there was a lot of uncertainty in the public opinion about what and how these funds will be used. To clarify many of these dilemmas, Portalb.mk spoke with Steffen Hudolin, Head of Cooperation at the EU Delegation to North Macedonia. Hudolin explains the strategy behind the financial support, the critical role of reform agendas, and how the EU is ensuring that citizens begin to feel the benefits of integration well before formal membership. Among other things, he stated that the funds under the Growth Plan are transferred after the reforms are implemented, not before.
Interviewed by: Fisnik Xhelili
Portalb.mk: Two years ago, the European Commission launched the Growth Plan for the Western Balkans. Tell us more about it.
Steffen Hudolin: Indeed, in May 2023 the European Commission launched the Growth Plan for the Western Balkans as an initiative that will bring the WB countries closer to the European Union. Considering that the enlargement is a top priority for this European Commission, the Growth Plan was launched as an instrument that will help the transformation of the Western Balkans societies and create real benefits for the people, not only upon EU membership, but now.
I would like to highlight here that the Growth Plan is not a replacement for the EU membership. It is a signal of our commitment. We want the Western Balkans citizens to feel the benefits of EU integration today, not someday.
Talking about the process – in order for each country to benefit from the Growth Plan, they had to prepare a Reform Agenda which is a roadmap for transformation in line with the key reforms set in agreement with the European Commission.
North Macedonia was the first country to submit its Reform Agenda that was approved on 23 October 2024 with a decision of the European Commission, following a positive opinion of the Member States. Upon positive assessment, North Macedonia was also the first country to receive pre-financing.
Portalb.mk: What does pre-financing and financing mean in practice?
Steffen Hudolin: Pre-financing is the initial support that the European Commission provides for helping the reforms foreseen with the Reform Agenda. For North Macedonia
the pre-financing amounted to 52.5 mil EUR – roughly 7% of country’s total allocation which is 750 mil EUR.
The future payments are linked to appropriate allocation and can be absorbed upon full implementation of the steps foreseen by the Reform Agenda. In accordance with the planned financing schedule the money will be transferred to the Ministry of Finance.
Portalb.mk: How much money has North Macedonia received from the Growth Plan so far?
Steffen Hudolin: Thus far, North Macedonia has received the pre-financing of EUR 24.4 mil EUR that was transferred to the national Treasury (state budget) in March 2025. The remaining funds of 28.1 mil EUR will be channeled through the Western Balkans Investment Framework (WBIF) and will be used to support concrete infrastructure projects.
Portalb.mk: Could you explain in more details what do these funds mean in practice, what are they going to be used for: budget support, grants and loans?
Steffen Hudolin: The formula for allocation of the funds under the Growth Plan Facility is the same for all WB countries. The funds are being transferred both in the form of grants and loans, in accordance with the Decision of the European Commission.
Namely, 1/3 of the total funds are provided in the form of non-repayable grants and 2/3 are favorable loans. All these funds are allocated for support of the key reforms agreed with the European Commission, divided in five strategic policy areas: Governance, by focusing on public administration and public finance, business environment and private sector development, green and digital transitions, investment in human capital and strengthening of the rule of law and the fundamentals.
In addition to the reforms, which are going to be supported with loans through the national treasury, the rest of the funds, a combination of grants and loans, are going to be implemented through WBIF.
Portalb.mk: Could you give us concrete numbers on how much money will be used for each area?
Steffen Hudolin: If you look closely at the Reform Agenda Annexes you can see that there is a price tag for each reform under the five policy areas. The funds are programmed according to the complexity of each step. For example, let’s take the policy area of Governance where the list of reforms touch upon sub-area Public Finance Management (PFM) and sub-area Public Administration Reforms (PAR). Under PFM we have 13 reform steps in the amount of EUR 74.928 million and under PAR we have 8 reform steps in the amount of EUR 36.394 million. The Green Energy Transition sub-area is costed at EUR 145.575 million and the sub-area of Digital Transition is costed at EUR 50.309 million, Human Capital policy area is costed at EUR 83.491 million, Business Environment and Private Sector Development policy area at EUR 193.743 million and the reforms steps under the policy area Rule of law and Fundamentals are costed at EUR 148.786 million. The absorption of these funds depends on the relevant national institutions and their pace of implementing the reforms. It’s important to note that there is also a one-year grace period for implementing the steps, in case the initial plan is not met.
Portalb.mk: How is the money transferred, before or after the implementation of the reforms?
Steffen Hudolin: The funds under the Growth Plan are transferred after the reforms are implemented, not before. Every six months the countries can request payments based on the reforms steps they have completed. Then, the European Commission assesses whether all conditions have been met. After a positive assessment, the funds are being released.
Portalb.mk: How is the success of the reforms measured, especially in the chapter ‘fundamentals’?
Steffen Hudolin: We rely on clear indicators, qualitative and quantitative indicators that were agreed jointly, by the European Commission and the partner country. In addition, when doing the assessment, we always consult the sources of verification. It is essential for us to verify that these reforms really happen, and that they make a difference on the ground.
All comments and remarks regarding this and other Vistinomer articles, correction and clarification requests as well as suggestions for fact-checking politicians’ statements and political parties’ promises can be submitted by using this form