AmCham Macedonia 1/2019 - Page 9

currently most actions in the legislation pipeline are aimed to complete the creation of the European Digital Single Market. How Ready Are We to Become Part of the Single Market? mechanisms to the competitive pressures of the Single market. The alignment with the EU acquis, or the set of EU regulations, directives, and other implementing acts which need to be transposed or implemented before the accession, implies profound legal and structural changes which will certainly have an impact for the business community and the entire society. They will probably also bring additional costs and may have redistributive effects. In order to mitigate possible negative influences and contribute to as smooth adjustments as possible, all the reforms need to be conducted in a transparent and inclusive manner, with the business community, social partners and civil society at the decision-making table. Where is the Place of the Business Community in the EU Accession Process? One of the basic EU accession criteria, defined in Copenhagen in 1993, is the existence of a “functioning market economy and the capacity to cope with competition and market forces in the EU”. According to the country report published by the Commission in April 2018, Macedonia is at a good level of preparation on its way to becoming a functioning market economy, but only moderately prepared to cope with competitive pressures and market forces within the EU. This in particular refers to the size of the companies and the size of distribution, as well as the market structure (the monopolistic position, as well as the openness of the economy in terms of the freedom of access by foreign firms to sell their products domestically). After the accession, national borders will no longer serve as effective barriers that safeguard and the market pressure will no longer be created by domestic companies only, but by international as well. The varying degrees of competitive pressure in the product and factor markets are expected to affect firm performance. How Macedonian firms will respond to changing competitive pressure will largely depend on the incentives and governance structure. Considering that most of the companies are small and micro family businesses, the efforts in the period of accession should be put on building their governance structure and response The business community and their representative organizations are important stakeholders during the accession process – both as an interested party that needs to be well informed and kept abreast of all the new developments and as a source of information regarding the current readiness of the domestic economy to join the EU. However, the government has not yet established a structure for EU negotiations that includes the business sector. In addition, efforts need to be put to strengthen companies’ and business associations’ capacities to be effectively included in the negotiations, i.e. to analyze the possible impact of the Single Market in order to design alternative scenarios and prepare. Hence, they need to be able to engage in various EU initiatives and programs, as to make use of the exchange, know-how transfer and absorb available funding. According to European Commission statistics, only 4 Macedonian entities – all of them organizations and none of them a company – have benefited from COSME (EU’s program for Competitiveness of Small and Medium Enterprises). Given that over 99 % of all companies in the country are SMEs, this fact is one indicator of the low level or awareness and readiness of Macedonian companies to make use of the potential gains that the EU puts at their disposal. EMERGING MACEDONIA 9