The biggest public finance reform over the past two decades, aimed to produce higher growth rates and better living standard, were in the focus of Wednesday’s meeting of Prime Minister Dimitar Kovachevski and Finance Minister Fatmir Besimi, informs MIA.

This includes the new Organic Budget Law, supported by all relevant international institutions but also political parties, and the amendments to the Law on Financing of Local Self-Government Units. The laws are drafted in line with the best global and European practices, bringing major reforms related to the planning and realization of the state and local budgets, setting up fiscal rules and a fiscal council, as well as fostering a high degree of accountability and transparency, the Government said in a press release.

Kovachevski and Besimi agreed that the system should be enhanced amid a time of big challenges, such as the current price and energy crisis, thus maintaining stability and achieving better economic results in the mid-term. The two laws completely change the public finance system.

The Organic Budget Law sets up a mid-term framework and clear goals for sustainable growth, as well as integrated system that will significantly improve the quality of planning and implementation of public revenues and expenditures. Debt and deficit thresholds are also set, along with a Fiscal Council that will independently monitor these processes.

Changes to the Law on Financing Local Self-Government Units are based on three pillars: improvement of the fiscal capacity of municipalities and increase of their revenues, higher fiscal discipline of municipalities, and increased transparency and accountability. The law ensures higher local revenues through a rise of the municipalities’ share in the tax pool but also strengthened responsibility and accountability in the funds’ spending, reads the press release.