Ever since Greece’s neighbour declared itself the ‘Republic of Macedonia’ in 1991, following Yugoslavia’s collapse, Greece has contended that Macedonia’s name choice and actions conveyed irredentism for, and cultural theft of, the Greek province of Macedonia.

Therefore, history was made when the Greek and Macedonian prime ministers met on July 17, 2018, to oversee the signing of the accord that changed Macedonia’s name to the ‘Republic of North Macedonia’. Macedonia’s prime minister, Alexis Tsipras, said: “We are here to heal the wounds of time...the poison of chauvinism and the divisions of nationalist hatred.”

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Emma Whiteacre, country analyst at political risk insurer Beazley, said that “the accord is important progress towards settling an issue that has been a key impediment to Macedonia’s deeper relationships with the EU and western institutions. Ultimately we do expect this to open up access to much greater levels of foreign investment and to support economic reforms, and this promise should help to mobilise public support, despite the current protests.”

However, there is a long way to go yet before the situation is finalised. The accord must still pass a referendum in Macedonia and ratification in the parliaments of both countries, which will not be smooth sailing since significant nationalist opposition exists in both Macedonia and Greece.

Indeed, police in Greece used tear gas to disperse protesters at the Greek-Macedonian border on Sunday, and Macedonia’s president, Gjorge Ivanov, refused to give his support for the deal.

“There is some concern that Russia might seek to support the nationalists’ cause and influence the referendum, to prevent Macedonia moving further into the western sphere of influence,” added Ms Whiteacre. “Such uncertainty will remain an obstacle to major investment decisions, and economic gains, until there is greater clarity.” 

A few weeks before the signing of the accord, Kreshnik Bekteshi, minister of economy for Macedonia, told fDi that: “We are on the European path. Investors will not have any problems because our legislation is mainly harmonised with EU. We have fulfilled all the obligations of Nato but we cannot become a member because Greece has put up a veto,” he said.

“We’ve worked very hard in the last few years to create a good business climate with a specialised young workforce. For example, we give investors a tax break for a period of 10 years, including corporate and personal income tax...Although the average net salary in Macedonia is €400, we are working to specialise our workforce and not just promote it as a [source of] low-cost labour... Besides manufacturing, we are also looking at IT because we have very experienced young people who are doing well in this sector,” added Mr Bekteshi.

Over the last 10 years, Macedonia has witnessed decent and steady inflows of greenfield foreign investment. However, 2017 was a disappointing year, with the lowest number of FDI projects since 2007, according to fDi Markets.