Macedonia Urges Power Companies to Write Off Debts

Macedonia’s Finance Ministry has urged utility companies to hurry up and apply to join a government-backed scheme to write of the debts of the poorest customers.
In return for canceling the debts, the government is offering the companies annual tax breaks.

Prime Minister Nikola Gruevski added to the call to companies to take part in the scheme at the weekend.

“We expect all of them to take part. I appeal to the EVN [the electricity grid operator], to Toplifikacija [a heating company], to the banks and to many other subjects that are part of this story,” Gruevski said.

Several utility companies and some of country's largest banks have immediatley responded to the government's call by saying they are willing to participate. Among them are Komercijalna Banka and Tutunska Banka.

The Economy Ministry previously said said it believed up to 100,000 of the poorest customers stood to benefit from the one-off measure.

Writing off overdue debt was one of the election pledges of Gruevski’s VMRO DPMNE party during the April general election.

It was advertised as a social measure aimed at helping people overcome the effects of the global economic crisis.

But some economic experts say the plan defies the logic of the market economy.
Moreover, one former finance minister, Dzevdet Hajredini, has accused the Prime Minister of putting pressure on companies to comply, at a time when the government is not capable of fulfilling its side of the bargain itself through the state budget.

“This destroys the principles of market economy and the legal system. There are other ways to apply social policies. This is lying to the people for propaganda purposes,” he told Radio Free Europe.

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