The COVID-19 pandemic has caused dramatic loss of human life and major damage to the European economy, but thanks to an exceptionally strong policy response, potentially devastating outcomes have been avoided.
Mr. Bernardin Akitoby, Mr. Larry Q Cui, Silvia Domit, Jingzhou Meng, Mr. Slavi T Slavov, Mrs. Nujin Suphaphiphat, and Hanqi Zhang
This departmental paper investigates how countries in Central, Eastern, and Southeastern Europe (CESEE) can improve fiscal transparency, thereby raising government efficiency and reducing corruption vulnerabilities.
This paper highlights the Republic of North Macedonia’s Request for Purchase Under the Rapid Financing Instrument (RFI). North Macedonia’s economic outlook has deteriorated substantially due to the coronavirus disease 2019 (COVID-19) pandemic. Real GDP is expected to decline by 4 percent in 2020 due to a fall in both domestic and external demand. This, together with negative shocks to confidence and spill-overs from global financial channels, has created an urgent balance of payments need. The authorities quickly responded with targeted and temporary fiscal policy support to limit the social and economic impact of the health emergency by protecting the liquidity of companies, preserving jobs and providing social care for the jobless and vulnerable households. The authorities have also expressed their strong commitment, once the COVID-19 crisis is over, to rebuilding fiscal buffers and implementing the structural reform agenda to help preserve debt sustainability and speed up income convergence to European Union countries.
This Selected Issues paper on the Republic of North Macedonia focuses on income convergence and integration of North Macedonia with the European Union (EU). Based on the experience of other countries, joining the EU, which North Macedonia is aspiring to, has the potential to strengthen growth prospects. The macroeconomic indicators appear aligned with other countries at the time they started EU accession negotiations. The EU accession process constitutes a fundamental anchor for institutional reform momentum. Significant efforts to improve institutional quality in new member states took place in the years prior to EU accession to comply with Copenhagen criteria on stability of institutions, guaranteeing democracy and the rule of law, the existence of a functioning market economy, and the capacity to cope with competitive pressure and market forces within the EU. The analysis presented in this paper shows further evidence of how opening of EU accession negotiations and of better quality of institutions, rule of law, and control of corruption can improve growth prospects.
This Technical Assistance report focuses on Ukraine’s distributed profit tax, voluntary disclosure of assets, and Base Erosion and Profit Shifting Work Program implementation. The recommendations largely favor simplifying rules, improving the definition of basic concepts, eliminating potential loopholes, and adhering more closely to international standards in some cases. Thus, for the sake of simplification, the report recommends that Controlled Foreign Corporation rules should apply to the ‘first onshore’ person rather than having to trace them back to the ultimate beneficial owner in Ukraine. Also, it recommends that the proposed interest deduction limitation should eliminate the carry-forward currently permitted, limit deductions to net interest expense and exempt the financial sector from this limitation. Some key definitions can be improved too. The report suggests that if there is an urgent need to promote private investments, the accelerated depreciation tool should be applied for plant and machinery and structures housing them for say another five years.