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The political party VMRO-DPMNE will start its pre-election campaign after August 20 in Ohrid, party leader and Macedonian Prime Minister Ljubco Georgeivski said Sunday at a press conference, held after the VMRO-DPMNE annual assembly.

"We may say that the pre-election campaign has started for VMRO-DPMNE.
However, the formal part will start in the legal term. At today's assembly, the party delegates expressed their conviction that VMRO-DPMNE will win the elections and compose the new government, " Georgievski said.

Underlying that this assembly was the largest party meeting prior to the elections in September, Georgievski said it was focused on the party activities in the last two years, particularly in the sphere of security, reforms and interior political issues. The party's future was also discussed, he said.

Asked if VMRO-DPMNE coalition with SDSM was possible, Georgievski said that such coalition after the elections would be part of solutions to Macedonia's national interests.

"I do not believe that the Framework Agreement will put an end to the agony of Macedonia in regard to its security, borders, sovereignty and integrity. On the contrary, there are two facts - determination of Kosovo status in three years and the Kosovo Parliament resolution - which say that Macedonia is to face serious national and security challenges, no matter what will be the result of the forthcoming elections. These challenges are extremely difficult and something has to be done about them," Georgievski said.
The SDSM participation in the Government for national unity was inconsistent, but national interests called for reconsidering of a possibility for a new coalition.

"VMRO-DPMNE and SDSM will be the main players at the forthcoming elections. So, from the beginning we are predestined to cooperate. Establishing of the VMRO-DPMNE -SDSM coalition after the elections will be the best for Macedonia," Georgievski said.

Regarding to the VMRO-DMPNE's offer to SDSM for a coalition in the sixth election district, which includes the municipalities of Tetovo, Gostivar and Debar, Georgievski said it might be an unsuccessful test, but also a good start of a cooperation between the two parties.

Asked if there was some response by SDSM to this offer, Georgievski said, "SDSM is assessing the situation on daily basis, making no attempts to realize that Macedonia is facing a conflict situation that will bring troubles to the country for at least ten more years."

To a question what would happen with the VMRO-DPMNE-DPA cooperation if the coalition with SDSM succeeded, Georgiveski said, "It is clear that any governmental coalition of Macedonian parties must be joined by an Albanian party."

Referring to the future cooperation with DPA leader Arben Xhaferi, Georgievski said that Xhaferi and other Albanian politicians were prisoners of some higher political structures, which, unfortunately, aim at long-term destabilization of the region.

Georgievski said that a meeting with his Albanian counterpart Pandeli Majko on Saturday was focused only on infrastructure and economic projects, tackling no political issues.

It might be good to deal with the problems by joint projects, Georgievski said, adding that the relations between both governments were not satisfactory in the last two-three months.
Macedonian President Boris Trajkovski had a meeting Sunday in Ohrid with Albanian Prime Minister Pandeli Majko, focused on enhancing of the bilateral relations.

As the President's Cabinet reports, the officials expressed interest in more intensified economic cooperation, particularly in faster implementing of the Macedonian-Albanian Free Trade Agreement.

They expressed interest in construction of the Corridor 8, which will intensify the regional economic cooperation.

The officials also shared opinions on the situation in the region.
Last night, Majko had a meeting with Macedonian Prime Minister Ljubco Georgievski, focused on possibilities for more intensified economic cooperation, based on the Free Trade Agreement between two countries.

The officials agreed that large infrastructure projects and joint presentation before the international institutions for acquiring of financial assistance would contribute to faster developing of both countries, Georgiveski's Cabinet said in a press release.


Archbishop of Ohrid and Macedonia Stefan conducted Sunday a religious service in the first Macedonian Church "SS. Kiril & Metodij" in Dortmund, Germany.

"This is the first Macedonian Orthodox Church in Germany. We hope that this example will be followed by other Macedonian communities in Europe, creating a place where they and future generations will cherish their religious, educational, cultural and patriotic spirit," Stefan said.

Macedonian Ambassador to Germany Goran Rafajlovski, Consul in Bon Jasmin Kahil, chairman of the committee on relations with religious communities Gjorgi Naumov, and representatives of Macedonian communities and clubs in several European countries attended the ceremony.

Defence Minister Nikolai Svinarov: People Won't Be Put at Risk by Missile Destruction.
Sofia, June 16 (BTA) - The population will not be put at risk by the destruction of the SS-23, Scud-B, Frog-7 and Scud-A missiles, Defence Minister Nikolai Svinarov told journalists on Sunday.
Each type of component of the missile systems will be subject to trial incineration and destruction, followed by an environmental impact report. Only then will the phased destruction of all missiles start. If the environmental impact report identifies threats, the decision will be rethought, Svinarov said.
The deadline for phasing out and destruction of the four missile systems is October 30.
The chosen method of phased incineration of the missiles does not have any environmental or seismological consequences for the population, the defence minister said. The area where the missiles will be destroyed will be strictly cordoned off and people will not be put at any environmental risk.
Svinarov, Environment Minister Dolores Arsenova and experts will explain in detail the measures that will be taken at a special news conference. Meetings with the public, not only in the Stara Zagora region, have also been scheduled.
The municipal councillors of Stara Zagora urged Svinarov and Arsenova this week to provide information on the environmental and other potential risks to the population. Failing that, they will head citizens' protests employing all lawful means. The municipal council will hold an extraordinary meeting on Monday devoted to missile destruction.
Svinarov said experts would explain in detail to the Stara Zagora councillors why the population would not be at risk.
The National Assembly ratified this week a Bulgarian-US Memorandum of Understanding on support for the destruction and demilitarization of missile systems and the equipment, material and components thereof, as well as the secret annexes to it.

INTERVIEW Vest - MIA: Nikola Gruevski

I believe that that the big preelection public expenditures will not cause financial instability in Macedonia after the elections, Macedonian Finance Minister Nikola Gruevski said in his interview for "Vest" daily. We analyzed these issues thoroughly and the analyses showed that there would be no disturbances. New money would not be issued, so there would be no new money into circulation. You know that in the first quartile we had surplus of 1,2 billion denars, what is obvious that the things are not so bad. It is not ideal, it can always be better, but for now it is better than we planned.

However the opposition warns about the risk of devaluation after the elections. Your position is that there would be no increase of the inflation rate. Can you support your position with economic arguments?

The economic arguments are the following ones: the inflation emerges when the money funds exceed the goods, and when there is higher money inflow in comparison with the produced goods, that means unreal money, which did not originate from the economy. That is not our case, as we have not withdrawn means from deposits or any means that were not realized. The Budget means are real, and realized in the course of this year. Second, we do not spend anything what is outside of the budget. All ministries spend the realized money within the planned budget and the rebalance.

Whether between the economic and the political logic you chose the second option, when you decided to enter the preelection campaign with larger amount of money that would be allocated to the public administration, the retired persons?

I think that any Minister of Finances will make the biggest mistake if one chooses the political option, as there is nothing worst than promising something and then failing to fulfill the promises.

However, the economic experts in Macedonia always predict black future. When VAT was introduced they said that there would be a catastrophe, with high inflation rate, devaluation and you saw that VAT was good move and the companies are satisfied with the introduction of this tax. When we transformed the Public Operation Systems Bureau the same people announced another catastrophe. It seems they always do. It is similar to those people that predict earthquakes and sometimes, although very rarely their guess will come true.

The Government, despite its publicly announced desire to conclude an arrangement with IMF, did not succeed to sign one. What is your comment?

This Government signed an arrangement with IMF, PRGF-EFF in November 2000, which was cancelled during the war. Later, they only had an observational program. The next opportunity was in May 2002 when we decided to finalize the negotiations after the elections. By the way we had several arrangements with the World Bank. We had an exceptional cooperation with IMF. It is usual to hold negotiations between IMF and the Government, but sometimes they work and sometimes they are postponed. They used to criticize me that I just follow the rules of IMF and now when we postponed the arrangement on contrary I hear the gossips that I am not on the same frequency with IMF.

But you have postponed it in a very sensitive period, prior to the elections. What is the real reason behind this? Why the arrangement was not concluded?

Several days after we have started the negotiations we knew that the arrangement would not be concluded. They insisted on canceling the Law on compensation of the clients of the bankrupted savings banks and we had different projections for the next year's deficit. They were not against increasing the salaries, but I felt that they would be much happier if we did not do that. The entire team of the Finance Ministry including the professors Petkovski, Atanasovski and Slavevski, Zoran Stavrevski and Sam Waknin assessed that this increase would not cause destabilization.

Sam Waknin remains your friend and you still use his expert services. How come there is not a single Israeli investment in Macedonia?

Waknin activities are not focused on investments. He is not any longer a permanent advisor of the Government, but we engage him from time to time. I think that we made the right move for engaging him in IMF negotiations as he has 20-year long experience with IMF and was an advisor to several governments in the past.

If there are sufficient funds in the Budget, why didn't you cancel the military tax, as some think that it is a burden to our economy?

The military tax will be cancelled by the end of the year, as we use this tax to cover the expenses of police and army reservists. Both the ministry and IMF agreed that this should be a short-term tax, or otherwise would harm the economy.

You said that the tax revenues exceeded the plans, but can you tell us the revenues about all taxes individually after the first five months?

The revenues of the VAT, the tax on financial transaction, excise and on duties are higher than the planned. The tax on personal income is as much as we have planned. The Budget's deficit is planed to be 2,7 percent and it would remain or would be a little bit lower. We had a debate with IMF whether to reduce the deficit and not to increase the salaries or the other way round. IMF is always committed to reduce the deficit, but we have offered other arguments. We faced the military conflict last year and we had six percent of deficit. And according to the analyses it is not good when there are great changes, especially as we used to have a surplus in 2000. IMF did not want to discuss these arguments and usually changed the subject, although we used the information provided on their web site about the situation in Bosnia, Croatia, Yugoslavia and other countries. We realized that in all countries affected by war, the deficit has been reduced gradually.

Republic of Macedonia has full record of the foreign and domestic indebtedness, regardless whether it is short-term, medium-term or long-term. Usually the medium and long-term indebtedness are most exploited. The National Bank of Republic of Macedonia has a record of the short-term credits and this institution is responsible for publishing those data.

On 31 December 2000 the medium and long-term indebtedness of Republic of Macedonia was $ 1,436 million and the short-term credits amounted to $ 52 million. By the end of 2001 medium and long-term indebtedness was $ 1,378 million, while the short-term credits amounted to $ 63 million. It is clear that the short-term credits are four percent of the medium and long-term indebtedness. In 2001 the short-term credit was increased for just $ 11 million and that is not irresponsible or something to be worried about.

In 2001 Macedonia has reimbursed $ 40,1 million of its liabilities and it is planed to reimburse other $ 41,6 million in 2002.

It is a fact that some international institutions mention Macedonia in their reports as a channel for cigarette trafficking. What is your comment?

Well, there were some discussions about this but not lately, and there were no direct accusations, firm evidence or anything similar. I usually tell them to talk to the Head of Customs Administration, because he is responsible of that sector.

You are still on the idea to engage independent consultant house for resolving the situation in the customs sector?

I think that this a good idea, but maybe I am wrong. The Bulgarians are already working on that issue and I am waiting to see the results and whether they would benefit from that project. I am interested whether this project would increase the customs revenues and reduce the trafficking. If the results are good, we will discuss that idea again.

Around 16,5 million denars would be given to the Agency for Development and Investments (ADI), but it seems that this Agency has not done anything in the past 2 years since VMRO-DPMNE has taken over the agency.

Some public institutions do not inform the public about their activities and I think that this is not good, so as a minister I urge them to work more transparently. Sometimes they blame me for spending money on publishing the announcements in the media, but according to the survey more than 70 percent of the population said that these public announcements were good and that we should continue that practice. I think that the other institutions should follow this example.

How much is the real tax burden of the companies?

The tax burden is measured when the total incomes of the state are related to the gross-domestic product. In Macedonia it was 34,3 percent in comparison to 1995 when it was 35,7 percent. In most European countries it is above 40 percent. The accusations that the budget was lower in the past do not mean that the tax burden has been increased, but that the gray economy has been lowered. I would just remind that we reduced the personal tax on income and we lowered the duties of over 4,000 products and some products have lower VAT rate of just five percent.

Are the taxes collected from the entire territory? What about western Macedonia and the crisis regions?

The gray economy has always been higher in those areas, but we try to establish control and to make the people pay. A team of inspectors from Skopje was in Gostivar to weeks ago and now we sent teams to Tetovo as well.

Will you lead the election list in one unit in Skopje?

VMRO-DPMNE did not discuss this issue yet, and I really do not know who would lead the list. Everything published in the media was just pure speculation.

What are your final plans prior to the elections?

The Finance Ministry is always active, regardless of the elections. So we will keep on working.

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