Name row: Greece, North Macedonia have work cut out for them

Athens, Greece – NATO and the European Union celebrated Greece’s ratification of the Prespes Agreement last week that recognises its northern neighbour as North Macedonia.

But the deal has yet to enter into force.

“It has been adopted but not implemented. It’s an interim period,” says Greek foreign ministry spokesman Alexandros Gennimatas. “As soon as we ratify the NATO Induction Protocol, we shall inform Skopje and they will reply saying ‘we are now called North Macedonia’.”

This is to happen over the next 10 days. Then North Macedonia‘s induction will have to be ratified by the parliaments of all 29 NATO members. “Last time this took a year,” says Gennimatas, referring to Montenegro‘s induction in 2017.

In the weeks following, Greece is also expected to notify the EU that it supports accession talks with North Macedonia. The two countries will upgrade their liaison offices to full embassies.

Within five years, North Macedonia is to rename all its public bodies, adjust its internal official documents, and replace all passports currently in circulation.

Identity and culture

It is not surprising, then, the prickliest issues emanating from the Prespes Agreement are also cultural.

Within six months, North Macedonia must convene a committee to review its monuments and public buildings and how they “refer in any way to ancient Hellenic history and civilisation” and take appropriate “corrective action”, according to the agreement.

This essentially means that the gigantic bronzes of Alexander and his parents, King Philip II and Olympias, must come down.

They were part of a $1bn public buildings programme undertaken by the previous nationalist government of North Macedonia, which Prime Minister Zoran Zaev has criticised.

A separate, Joint Inter-Disciplinary Committee of Experts on historic, archaeological and educational matters formed last year is currently revising North Macedonia’s school textbooks, maps and teaching guides to remove “irredentist /revisionist references” to ancient Macedonia or other Greek heritage.

In the process, it is redesigning the next North Macedonian generation’s identity. It is doubtful whether such a dramatic reorientation of national identity has ever been undertaken in modern times.

“The special point is that [the North Macedonian] national narrative is now being shaped in conversation with Greece,” says Ioannis Armakolas, professor of comparative politics at the University of Macedonia in Thessaloniki.

“I don’t know if Greeks understand how great this is. Imagine another neighbour coming along and deciding with us how we perceive our history and identity. Instead of seeing them competitively, we need to recognise that they, too, have taken a big step with this agreement and help them.”

Commercial issues

The Greek parliament on January 25 ratified the Prespes Agreement with 153 votes in the 300-seat chamber – a large majority by Greek political standards these days.

NATO Secretary-General Jens Stoltenberg called it “an important contribution to the stability and prosperity of the region”. European Council President Donald Tusk tweeted of prime ministers Alexis Tsipras and Zaev, “They had imagination, they took the risk, they were ready to sacrifice their own interests for the greater good. Zoran, Alexis – well done! Mission impossible accomplished.”

They had imagination, they took the risk, they were ready to sacrifice their own interests for the greater good. Zoran, Alexis – well done! Mission impossible accomplished. #PrespaAgreement@Zoran_Zaev @tsipras_eu

— Charles Michel (@eucopresident) January 25, 2019

The wording of the Prespes Agreement makes clear that Greece and North Macedonia are to become the best of friends. The two parties are to establish an action plan on a range of issues such as transport, civil protection, agriculture, energy, environment, infrastructure, investments and defence. And they are to establish a High Level Cooperation Council to oversee that plan.

Such ambitious goals look good on paper, but there are legal and practical issues to be resolved.

The two countries are to set up a joint committee this year to discuss trademarks and brand names containing the term Macedonia or Macedonian. The committee must conclude an agreement within three years.

Economic dynamics

“As it stands, this agreement doesn’t add value, it takes value away, because we’re sharing the brand name Macedonia,” says Vasilis Korkidis, head of the Piraeus Chamber of Commerce and a leading voice in Greek trade. “It will make little difference to European consumers to see an “N” in front of that word.”

Korkidis is concerned that only 24 Greek companies have trademarked products with the term Macedonia in the EU, and only two have trademarked their products internationally.

Economic dynamics suggest a quick resolution is in everyone’s interest. North Macedonia sends more than 80 percent of its exports to the EU and buys about 60 percent of its imports from the bloc. Its strongest trade relationship by far within the bloc is with Greece, which has been the biggest foreign investor in the country since the late 1990s.

Only during the depths of its financial crisis in 2013 was Greece overtaken by Austria, and in 2016 by Britain, which quadrupled investment in the fledgeling nation that year. Even so, Greece still sank more than $500m into North Macedonia in 2017, accounting for 10 percent of the foreign direct investment. It still provides North Macedonia’s main access to the sea through the port of Thessaloniki, and Greece can still veto North Macedonia’s EU entry – a weapon the conservative opposition warns it is willing to use.

Greece has another concern – its high taxes have inflated costs and lowered competitiveness, as it struggles to pay off almost $500bn of public debt. Its corporate tax stands at 29 percent, and minimum wage was just raised to $743.

In North Macedonia, the corporate tax is 10 percent and the average wage stands at $454. As a result, Greek companies are going bankrupt or moving abroad – many of them to neighbouring countries.

Grass is greener?

Korkidis estimates there are 400 Greek companies in Skopje representing investments worth over $1.7bn.

The chamber studied cross-border trade. “We found a trade deficit of 500mn euros ($574m) a year in fuel, farm produce, car mechanics, accounting services, gynaecologists, hairdressers, you name it,” says Korkidis.

Zaev sees it differently. “In the past 10 months, trade between our countries increased by 18.7 percent, mostly in Greece’s favour,” he recently told a Greek newspaper.

“These issues existed before the agreement, and the business world hadn’t done much about it,” says Armakolas. “Perhaps the agreement is an opportunity for businesses to brand themselves.”

He also doesn’t believe capital flight is affected by the agreement. “The fact that some businesses might think the grass is greener on the other side was never an argument against resolving the name issue. This is about what sort of business climate Greece offers. It is no different if businesses flee to Albania or Bulgaria.”

Political issues have got in the way of commerce before. Greece’s national carrier, Aegean Airlines, instituted an Athens-Skopje flight in 2003, only to abolish it four years later. “We were waiting for the two countries to resolve serious differences,” says the airline’s spokesperson Stavroula Saloutsi.

Last November, Aegean reinstated the flight “after Skopje renamed its international airport”, says Saloutsi. Greece had complained publicly when the airport was named Alexander the Great in December 2006. As a goodwill gesture to restart the dialogue with Greece last year, Zaev renamed it Skopje International Airport.

“It’s our impression that it is in Greece’s interest to have more connections with all countries, even those with which it has a problematic relationship, because improvement of the two countries’ economic relationship always helps,” said Aegean’s President Eftychios Vassilakis.