National Security Council summoned over failure to arrest ‘Balkan Escobar’

National Security Council summoned over failure to arrest ‘Balkan Escobar’

TIRANA, Jan. 25 – Albanian President Bujar Nishani has summoned the National Security Council over the failure of authorities to arrest a man accused of being a notorious drug trafficker, who also served as a former local government official of

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Opposition slams PM’s healthcare performance

Opposition slams PM’s healthcare performance

TIRANA, Jan. 24 – Four years ago, the chairman of the Socialist Party Edi Rama, promised that he would make quality, free health care, a right to all citizens. However, most experts agree, in its first mandate the government has

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Public trust in government sinks to a record low

Public trust in government sinks to a record low

TIRANA, Jan. 25 – The level of trust in the Albanian government has plummeted, according to a latest survey. The trust barometer survey by IDRA shows a sharp drop in the levels of trust in the last two years. Trust

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Pre-electoral amnesty to pardon millions of euros in debts

Pre-electoral amnesty to pardon millions of euros in debts

TIRANA, Jan. 25 – A new pre-electoral amnesty the ruling Socialist Party is about to approve ahead of next June’s general elections will benefit both businesses and households who will have their pre-2011 taxes and penalties fully pardoned and get

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Relations with IMF back to advisory as 3-year binding deal ends

Relations with IMF back to advisory as 3-year binding deal ends

TIRANA, Jan. 24 – Albania has concluded a three-year deal with the International Monetary Fund supported by a Euro 331 million loan, reducing the Fund’s role on the country’s economic and fiscal policies back to an advisory role until the

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Oil, mineral exports expected to recover as commodity prices surge

Oil, mineral exports expected to recover as commodity prices surge

TIRANA, Jan. 26 – A surge in commodity prices is expected to have a positive impact on Albania’s poorly diversified exports for 2017 after an almost zero growth in 2016 and a 5 percent contraction in 2015. In its January

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World Bank unveils Albania’s quake, flood-risk regions

World Bank unveils Albania’s quake, flood-risk regions

TIRANA, Jan. 26 – Albania’s population and economy are exposed to both earthquakes and floods, with earthquakes posing the greater risk of a high impact, lower probability event, a World Bank report has warned. Taking into account a 2.9 million

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New local tax triggers hike in Tirana apartment prices

New local tax triggers hike in Tirana apartment prices

TIRANA, Jan. 26 – Apartment prices in Tirana are expected to undergo a hike ranging from Euro 50 to 120 this year due to higher taxes the municipality of Tirana has imposed on new constructions. The new prices reflect a

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Judges’ ‘El Classico’ tickets lead to graft probe

Judges’ ‘El Classico’ tickets lead to graft probe

TIRANA, Jan. 24 – The Serious Crimes Prosecutor’s Office is investigating three judges of the Durres Appeals Court over suspected passive corruption that saw the justice system officials get tickets and travel to watch one of the year’s most important

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Informality affects more than a third of workers in Albania, study finds

Informality affects more than a third of workers in Albania, study finds

TIRANA, Jan. 24 – High unemployment rates, especially among youngsters, is the key reason behind alarming levels of the shadow economy in Albania, Kosovo and Macedonia, a study by Tirana-based Institute for Democracy and Mediation has found. Whether it is

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                    [post_content] => TIRANA, Jan. 25 – Albanian President Bujar Nishani has summoned the National Security Council over the failure of authorities to arrest a man accused of being a notorious drug trafficker, who also served as a former local government official of Saranda, Klement Balili.

Albanian Serious Crimes Prosecution Office has launched criminal investigation against Balili based on an arrest warrant by Greek authorities in May 2016, in the aftermath of an anti-drugs operations conducted with the assistance of U.S. Drug Enforcement Agency.

President Nishani decided to summon the National Security Council after Speaker of Parliament Ilir Meta sent an official letter arguing the importance of the meeting “to address the lack of actions of all law enforcement institutions for Balili’s arrest.”

In his letter, Meta explains that Balili has not been arrested and delivered to justice regardless of the “procedural acts and charges filed at Albania’s and international respective bodies.”

According to Meta, Albania’s US and other international partners have expressed their concerns over Albania’s incapability to arrest Balili.

“Summoning the National Security Council on this matter will be a testimony of the seriousness of Albanian institutions to address concrete responsibilities and their commitment in dealing with issues that have an impact in the country’s national security,” Meta said.

Last year, U.S. Ambassador Donald Lu criticized Albania’s lack of will to arrest Klement Balili, also dubbed as the “Escobar of Balkans.” According to Lu, Balili could not have escaped justice without the support of elements from the state and the political class.

U.S. Ambassador warned if Albania can not arrest Balili, than the country is not serious about the fight against drug trafficking.

“If Albania cannot catch Klement Balili, how will it go after other big fish. Who will want to work with Albania? Who will believe this is a serious country in the fight against drug trafficking?” – Lu said at a conference last December.

Balili’s involvement in drug trafficking came under spotlight in 2016, when Greek police in cooperation with the U.S. Drug Enforcement Agency arrested dozens of members of a large criminal organization led by the Albanian local government official and launched an arrest warrant against him.

Greece sent the arrest warrant to Albania on two occasions along with thousands of documents as evidence for Balili’s involvement in the drug business, but local authorities officially said that the process was delayed by the translation of the materials.

Independent experts and the opposition parties have warned that Balili escaped arrest as a result of his political ties, and have called for the resignation of Minister of Interior Affairs Saimir Tahiri.

 
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                    [post_content] => [caption id="attachment_130891" align="alignright" width="300"]Opposition Democratic Party MP Albana Vokshi  Opposition Democratic Party MP Albana Vokshi[/caption]

TIRANA, Jan. 24 – Four years ago, the chairman of the Socialist Party Edi Rama, promised that he would make quality, free health care, a right to all citizens. 

However, most experts agree, in its first mandate the government has failed short to deliver on one of the key pillars of the Socialists' much-touted Renaissance program.

During a meeting in Durres, Prime Minister Rama promised that about 600,000 uninsured people will benefit the right of free health care services, and that “starting from February, all doctors prescriptions will be issued electronically.” 

“The application of e-prescription will avoid corruption in medicament reimbursements,” Rama said, adding, “We can proudly say that health expenses have been reduced significantly.” 

According to Rama, the healthcare sector is “falling prey to unfair prejudice,” while the government is reforming the system and fighting corruption and bribery.

While state authorities insist that the universal medical care program is a success story, the country’s main opposition party, the Democratic Party, claims that the government is lying and turning the health sector into a money-making business for its clientele.

“Rama’s reforms were accompanied by corrupt deals in the Obligatory Insurance Fund and paved the way to bad medicines entering the country,” Albania Vokshi, Democratic Party MP, said Tuesday.

According to the opposition, the Socialist-led government removed the obligation of EU certification for all medicines, making Albania a haven for government clientele that sell sub-par medications, according the an opposition statement. 

The government claims that it has lowered medicament prices by 30 percent, but according to DP “patients in Albania are facing a severe shortage in medications.” 

Last year, 2016, marked the entering to force of the bill “On obligatory health insurance in the Republic of Albania,” which aims to provide free health checkups at the family GP for people who do not have health insurance.

The bill also offers people who are uninsured the possibility to get check up services at a specialist for a fee of 100 lek, based on a recommendation of the family doctor.

Health care authorities have also been under scrutiny over a medical checkup program that operates with public funding issued to a private company for a period of 10 years.

The private-public partnership program aimed offer medical checkups to residents 40 to 65 years old but authorities expanded the availability of free medical checkups to legal residents aged 35 to 70 years old.

The company failed to meet the target of offering free medical care as not enough people showed up to do the health screenings at the laboratories established by the private company.

Instead of revoking the contract and admitting failure, the government decided to extend the pool of beneficiaries sparking anger among opposition and independent experts who accused the government of yet another corrupt affair in the health sector.

 
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                    [post_content] => TIRANA, Jan. 25 – The level of trust in the Albanian government has plummeted, according to a latest survey. 

The trust barometer survey by IDRA shows a sharp drop in the levels of trust in the last two years. Trust in the Albanian government fell to 35 points by the start of 2017 down from 100 points in 2014, the survey showed.

Trust in the parliament has dropped to 27 points whereas trust in the General Prosecutor’s Office has gone down to 34 points.

The High State Audit, the state comptroller, was given a trust rating of 31 points, whereas the judicial system remains the least trusted institution in the country with a trust score of 24 points.

State Police has fared well in the study as 2/3rd of respondents have a positive assessment of this institution.

The study titled “Impunity - Public perception on the role of institutions” was done during the time-frame October 2016-January 2017 and was technically and financially supported by the Open Society Foundation in Albania. The study polled 1,200 respondents over 16 years old. 200 of respondents were 16-24 years old.

The study noted an increase in the public interest on key political, social and economic issues.

In a press release following the publication of the survey, IDRA noted that “economy, corruption and bad governance are three of the most reoccurring dimensions in Albania.

According to the survey, 82% of respondents are mostly concerned about economy and 80% of them are often concerned about corruption and bad governance. Impunity, health sector, education and environment are other key problems identified by the survey participants.

According to respondents, impunity in Albania is closely tied to the non-implementation of the law, a non-functional justice system and corruption.

As a result, public expectation for the implementation of the justice reform is cut short. Only 42% of respondents are optimistic about the implementation of this key reform which aims to uproot corruption from the justice system.

 
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                    [post_content] => TIRANA, Jan. 25 - A new pre-electoral amnesty the ruling Socialist Party is about to approve ahead of next June’s general elections will benefit both businesses and households who will have their pre-2011 taxes and penalties fully pardoned and get stripped of their fines and late payment penalties until 2014 provided they pay the full obligation owed.

The initiative, an apparent move to gain an electoral advantage, comes as the incumbent government seeking a second consecutive term eased some doing business procedures for 2017 but left unchanged the key taxes, one of the key concerns for business representatives.

The draft law, which has not been made official yet, pardons all debts until December 2011, except for the payment of social security and health insurance contributions. The bill envisages a pardon of fines and penalties from 2011 to 2014 on condition businesses pay the initial obligation, but no amnesty for the 2015-2016 obligations except for penalties mistakenly imposed by the tax administration’s IT system.

Heavy fines imposed under a law turned down by the country’s constitutional court for violating the principle of proportionality following the launch of a nationwide campaign against informality in late 2015 will also be pardoned.

Only businesses sentenced under a final court decision will not benefit from the partial amnesty expected to be approved in the next few weeks.

The bill also benefits both businesses and households who will also have their car taxes pardoned until 2011 in a bid to automatically deregister some 140,000 cars who have paid no taxes during the past five years. A majority of these cars are believed to have been sold for spare parts and scrap.

The move comes as another amnesty offering households and businesses to reassess their property at modest tax rates of 2 to 3 percent, compared to a mandatory 15 percent, is set to expire in late February after remaining effective for six months.

The Albanian government says it plans to spend about $100 million on wage and pension increases for 2017, when police forces will benefit a 17 percent hike starting next January and the public administration is expected to get a 10 percent increase in monthly wages starting March 2017, only three months ahead of the upcoming general elections expected in June 2017.

The amnesty also comes at a time when the government has just concluded its binding three-year deal with the International Monetary Fund supported by a €331 million loan. The IMF and several business representatives have been skeptical of the amnesties, especially during pre-election periods because of creating a culture of impunity among businesses that avoid paying taxes and damaging fair businesses.

 
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                    [post_date] => 2017-01-27 10:29:19
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                    [post_content] => TIRANA, Jan. 24 – Albania has concluded a three-year deal with the International Monetary Fund supported by a Euro 331 million loan, reducing the Fund’s role on the country’s economic and fiscal policies back to an advisory role until the upcoming June 18 general elections when the current Socialist Party government says it will renegotiate a new deal if it wins a second consecutive mandate.

Speaking at a press conference with Albania’s finance minister and central bank governor, IMF mission chief to Albania Anita Tuladhar praised the program’s progress in consolidating public finances and economic recovery, and said the Fund was willing to renegotiate a new deal after the upcoming June general elections.

“The program has put the economy on its way to sound public finances, financial stability and economic recovery. With the program coming to an end, it will be essential that Albania commits to maintaining its momentum of economic reforms,” she told reporters.

The IMF mission chief identified strengthening public finances, reducing public debt and non-performing loans and improving the business climate as the key priorities Albania should focus on.

“Going forward, the main priorities should be: to continue expanding revenue to strengthen public finances and to ensure debt sustainability; reduce NPLs to strengthen financial stability and support credit recovery; and advance structural reforms to improve the business climate," the IMF official said.

Albania’s public finances continue to struggle even after nationwide campaigns to collect hundreds of millions of euros in accumulated unpaid electricity bills and tackle high informality rates during the past couple of years. Public debt at about 71 percent of the GDP and non-performing loans at 20 percent are also considered key threats to economic growth which in the past eight years has ranged between 1 to 3 percent compared to a pre-crisis decade of 6 percent annually.

In addition, the IMF official called for broadening the taxpayer base, introducing a value-based property tax and keeping in check new government arrears to businesses.

Finance Minister Arben Ahmetaj who had earlier warned there would be no immediate renewal of a binding agreement with the IMF, said a new deal will be made only by what he called “the Prime Minister Rama II government” after the upcoming general elections.

“We will not let the IMF leave Albania. The new IMF deal will be made by the Rama II government,” Ahmetaj said, praising progress made in the past three years.

Addressing the IMF farewell conference, central bank governor Gent Sejko stressed the need to further improving the business climate so that the country attracts more foreign direct investment.

“The business climate should further improve. The Bank of Albania estimates that attracting foreign investment, but also supporting and stimulating domestic investment should be the focus of the decision-makers’ work. Structural reforms should accelerate and the country’s competitive advantages further strengthen,” said Sejko.

“The current combination of economic policies based on a stimulating monetary policy, and a fiscal policy oriented toward debt reduction, should be preserved. The monetary policy will continue to remain stimulating in the mid-term, while the intensity of the monetary stimulus will adjust to the country’s development needs,” he added.

Albania’s central bank has kept its key rate at a historic low of 1.25 percent during the past 10 months, but its easier monetary policy has failed to boost current sluggish lending and consumption, mainly due to a high level of non-performing loans and hesitation by households and businesses to invest.

After keeping its tax policy unchanged for the 2017 electoral year, the Albanian government has announced plans to revise the current property tax by the end of 2017 based on IMF recommendations.

The reform is expected to shift property tax calculation from its current rate depending on the size and location of the property to a formula based on current market value by end-2017, in considerably higher rates.

While the Fund has had a decision-making role on the government’s fiscal policies in the past three years, conditioning its financial support at only 3 percent of the country’s GDP with a tougher discipline on public finances, experts and business representatives have often criticized its continuous tax hike policy as not helping improve the business climate in crisis times.

Since 2014, the corporate income tax and the withholding tax on dividends, rents and capital gains have increased by 5 percent to 15 percent, making the tax burden in Albania one of the region’s highest and a key concern for foreign and local investors.
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                    [post_content] => TIRANA, Jan. 26 - A surge in commodity prices is expected to have a positive impact on Albania's poorly diversified exports for 2017 after an almost zero growth in 2016 and a 5 percent contraction in 2015.

In its January 2017 Commodity Markets Outlook, the World Bank forecasts strong gains for industrial commodities such as energy and metals due to tightening supply and strengthening demand.

Crude oil prices are forecast to pick up to $55 a barrel for 2017, a 29 percent jump from 2016 while metal prices are expected to register an 11 percent increase, says the World Bank.

The surge in prices is expected to benefit both Albania's oil and mining industries which have been struggling in the past couple of years, cutting production following the mid-2014 slump in commodity prices with a negative impact on employment and government revenue.

“Prices for most commodities appear to have bottomed out last year and are on track to climb in 2017. However, changes in policies could alter this path,” said John Baffes, a senior World Bank economist.

World Bank experts warn emerging commodity exporting countries such as Albania need to employ measures to enhance the business environment, promote economic diversification and improve governance to better growth prospects over the longer term.

“Investment weakness – both public and private – hinders a range of activity in commodity-exporting emerging market and developing economies,” says World Bank’s Ayhan Kose.

Albania’s exports rose by a mere 0.12 percent to 243.5 billion lek (€1.75 billion) in 2016 covering only 42 percent of the country’s total imports which rose by 6.3 percent, further widening Albania’s trade gap.

Meanwhile, “minerals, fuel and electricity” contracted for a third year in a row following the mid-2014 slump in commodity prices severely affecting Albania’s poorly diversified exports considerably relying on oil and minerals.

Albania’s exports heavily rely on garment and footwear manufacturing as well as oil and base metals whose share in the country’s exports is estimated at two-thirds, making them vulnerable to international headwinds.
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                    [post_content] => TIRANA, Jan. 26 - Albania’s population and economy are exposed to both earthquakes and floods, with earthquakes posing the greater risk of a high impact, lower probability event, a World Bank report has warned.

Taking into account a 2.9 million resident population and a GDP of $11.6 billion, the study unveils that the northern region of Shkoder, where the country's biggest hydropower plants are situated, is at greatest risk of floods as has happened during the past 25 years of Albania's transition also due to massive illegal construction and no appropriate drainage infrastructure.

Meanwhile, the southwestern region of Fier and Tirana are rated at high risk of being affected by earthquakes, although the country has experienced no disastrous quake for the past four decades.

Floods have been the most imminent threat to Albania's economy in the past two and a half decades, also claiming dozens of lives, and have become an almost annual phenomenon in the past five years, also affecting central Albanian areas.

"The annual average population affected by flooding in Albania is about 50,000 and the annual average affected GDP about $200 million," says the report.

Albania's most deadly flood during the past 120 years occurred in 1992 when it claimed 11 lives and caused close to $12 million in damage. The country also experienced flooding in 2010 and 2012, 2015 and 2016 and most recently last November when three people died and dozens of businesses situated in the industrial area just outside the capital city along the Tirana-Durres highway claimed to have incurred losses of €10 mln.

Agriculture is one of the most climate-sensitive of all economic sectors, and without a clear plan for aligning agricultural policies with climate change, the livelihoods of rural populations are at risk, the World Bank has earlier warned in a publication over reducing the vulnerability of Albania’s agricultural systems to climate change.

The agriculture sector currently employs about half of the country's population but provides only 20 percent of the GDP due to being underfinanced and suffering massive fragmentation of agricultural land varying 0.1-0.15 ha.

When it comes to earthquakes, the damage can be substantially more devastating, both in terms of human lives and material damage.

Taking into account a 100-year period, the World Bank estimates the annual average population affected by earthquakes in Albania is about 200,000 and the annual average affected GDP about $700 million.

The annual averages of fatalities and capital losses caused by earthquakes are about 50 and about $100 million, respectively.

"The fatalities and capital losses caused by more intense, less frequent events can be substantially larger than the annual averages. For example, an earthquake with a 0.4 percent annual probability of occurrence, a 250-year return period event, could cause nearly 3,000 fatalities and $2 billion in capital loss, about 20 percent of GDP," notes the report.

Albania's most deadly earthquake in the past 120 years took place in 1920 in Tepelene, southern Albania, where a magnitude 6 quake caused about 600 fatalities.

Since then, Albania has experienced many earthquakes of varying severity. The latest deadly quaky that hit Albania was in 1967 when it caused 18 fatalities and $140 million in damage.

The potential for greatest capital loss occurs in Tirane, which is not surprising, given the economic importance of the province.

Due to climate change risks, population growth, urbanization and the increase in exposed assets both floods and earthquakes are expected to cause much more damage in their 100-year return periods, World Bank experts warn.
                    [post_title] => World Bank unveils Albania’s quake, flood-risk regions 
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                    [post_date] => 2017-01-27 10:11:05
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                    [post_content] => TIRANA, Jan. 26 - Apartment prices in Tirana are expected to undergo a hike ranging from Euro 50 to 120 this year due to higher taxes the municipality of Tirana has imposed on new constructions.

The new prices reflect a 2016 review of the tax on the impact on infrastructure for new constructions in Tirana, increasing from 4 percent of the construction costs to 8 percent of the sale price, which developers described as four-fold hike.

Apartments prices in Tirana vary from 700 to 2,500 euros/m2 in downtown Tirana compared to 400-650 euros/m2 in uptown areas of new ring road and Fresku.

Thousands of apartments also remain unsold, especially in the cities of Durres and Vlora which have seen a boom in construction, says the Developers Association.

The low number of construction permits issued by local government units is another reason for the crisis in the long-ailing construction sector which has been in crisis since the onset of the global crisis in 2008.

Developers expect the 2017 electoral year to have a positive impact due to the expected surge in public investment and a slight recovery in demand for new apartments as banks have eased standards on home loans.

As elsewhere in the region, construction has been the most affected sector in Albania’s economy during the past six crisis years, losing its position as one of the key drivers in the pre-crisis years and cutting thousands of jobs.

Construction sector saw its share of gross value added by main sectors drop to 11 percent at the end of 2015 compared to 14.9 percent in 2010 and a record high of 18 percent just before the onset of the global financial crisis in 2008. Its contribution to employment has also been reduced to only 6.9 percent, compared to 8.2 percent in 2011 and 9.9 percent in 2009 when Albania was one of the few countries to register positive growth rates, data shows.

With the remittances-fueled construction boom almost over, more and more Albanian enterprises are turning to agriculture as a growth opportunity, engaging mostly in egg, fruit and vegetable production, a considerable part of which are destined for exports. A considerably number of the start-ups are subsidiaries of long-ailing construction companies which are turning to agriculture to diversify their investments.
                    [post_title] => New local tax triggers hike in Tirana apartment prices
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                    [post_date] => 2017-01-26 19:16:09
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                    [post_content] => TIRANA, Jan. 24 - The Serious Crimes Prosecutor’s Office is investigating three judges of the Durres Appeals Court over suspected passive corruption that saw the justice system officials get tickets and travel to watch one of the year's most important football matches. 

An investigation carried out by Voice of America and the Balkan Investigative Network noted that judges Kliton Spahiu, Petraq Dhimitri dhe Petrit Çeno were given a trip to Spain in 2014 to watch the Real Madrid-Barcelona 'El Classico' match, in exchange of a ruling in favor of a businessman.

According to the report, their trip was sponsored by a businessman in Durres, identified as Namik Sadiku, whose lawsuit was being examined by the three judges.

Voice of America reports that in 2012 Sadiku was sued by his former business partner Oliver Ushina over plans for the construction of a 10 story beach hotel at the Shkembi i Kavajes Beach area.

The claimant won the lawsuit when the case was examined by the First Instance Court, but the Court of Appeal overturned the decision, favoring Sadiku’s claim.

On Feb. 18, 2015, Ushina filed criminal charges at the Durres Prosecution Office against the three judges claiming that they had been awarded two trips abroad in exchange of a favorable ruling.

According to Ushina, his former business partner had also traveled to Italy to accompany the three judges.

Businessman Sadiku denied allegations that he sponsored the trips and told BIRN that the time of travel in both cases “was merely a coincidence.” He claimed that his travel agenda was business oriented.

Preliminary records obtained by BIRN show that the three judges traveled to Spain on Oct. 24 2014 with Alitalia and came back to Tirana on Oct. 26, 2014. The same records reveal that Sadiku traveled to Spain on Oct. 23, 2014 and returned on Oct. 26, 2014.

Prosecutors confirmed that the suspects traveled to Spain to watch the Real Madrid-Barcelona match held on Oct. 25, 2014.

According to investigations, Judges Spahiu and Dhimitri also traveled to Italy on Oct. 2, 2014 in the same plane and time with businessman Sadiku.

The case has been under investigation for over 18 months, however, three prosecutors have been taken off the case without reaching a final conclusion on the case.

The three judges under investigation have a long career on the bench. Petrit Çeno has chaired the Durres Appeal Court since 2010 while three years later a presidential decree appointed him to the Supreme Court. The decree was nonetheless overturned in parliament.

Judge Kliton Spahiu was appointed in the Durres Appeal Court following his tenure in Kurbin Court whereas Petraq Dhimitri was nominated in court since 2010.

The three suspects have denied allegations of receiving such bribes from the businessman and claimed that they had paid their own travel expenses. Judge Spahiu also claims to have won the funds in sports betting and covered the expenses.

Spahiu’s wealth statements deposited at the High Inspectorate of Declaration and Audit of Assets and Conflict of Interests reveal that he won 2,791,676 Lek and $4,246 in betting activities during 2012-2014.

 
                    [post_title] => Judges' ‘El Classico’ tickets lead to graft probe 
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                    [post_date] => 2017-01-24 11:45:29
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                    [post_content] => TIRANA, Jan. 24 – High unemployment rates, especially among youngsters, is the key reason behind alarming levels of the shadow economy in Albania, Kosovo and Macedonia, a study by Tirana-based Institute for Democracy and Mediation has found.

Whether it is a factory worker who also works as an unlicensed plumber, an electrician being paid in cash, an IT professional receiving an envelope wage, hidden salaries are the most acute concern in the three Western Balkan countries aspiring to join the EU, affecting about half of workers.

The study shows undeclared work is one of the main manifestations of the hidden economy affecting people within a variety of socio-economic environments which at the same time is characterized with possible negative outcomes ranging from social tensions, rising inequalities and income gaps, to corruption and criminal activities.

“Hidden salaries remain the most acute concern with the employment income being partially or completely undeclared for 36 percent of workers in Albania, 37 percent in Kosovo and 40 percent in Macedonia,” the study has unveiled.

The three neighbouring countries have a total resident population of about 7 million, with ethnic Albanians in Kosovo accounting for 92 percent of its 1.9 million population and a quarter of Macedonia’s 2.1 million residents.

The conclusions come from a survey conducted in May-June 2016 with 1,100 respondents in each of the three neighbouring countries.

While Albania’s labour informality rates are slightly lower at 36 percent, the figures are still alarming considering that they come out only 10 months after a rather aggressive nationwide campaign to tackle widespread informality. The campaign launched in Sept. 2015, although formalizing thousands of businesses previously operating informally and lifting thousands of workers out of informality, has failed to produce the expected hike in government revenue also because of an earlier campaign to collect hundreds of millions of euros in accumulated unpaid electricity bills significantly affecting consumption levels among poor households.

Working with no employment contracts is a common phenomenon in the three neighhbouring countries, preventing workers from access to social security and health services.

Discretion in the application of rules and related corruption have a more important effect on the informal economy in Albania where the shadow economy is estimated between 30 to 45 percent of the country’s Euro 11 billion GDP, the study says.

High youth unemployment rates ranging from 30 percent in Albania to 50 percent in Kosovo and Macedonia as well as long-term unemployment also fuel informality in the three Western Balkans countries affecting legitimate businesses through unfair competition, and informal workers through lack of access to basic services and credit.

The study cites Albanian economists Fatmir Mema and Zef Preçi in concluding that even though there is a tendency to label undeclared workers and their economic activities as a “bad” phenomenon, one has to be aware that also “…in reality it is a natural and unprovoked reaction of the incapability of the formal economy to satisfy the needs of a part of its society members.”

A World Bank study has earlier found Albania’s informality rate in non-agricultural sectors is estimated at 48 percent, ranging from 35 percent in industry to 46 percent in services and 70 percent in the construction sector.

The informality level in agriculture, a key sector which employs about half of the country’s population but provides only 20 percent of the GDP, is estimated at a record high of 70 percent, making it the most informal sector in the economy.

The International Labour Organization estimates complex legal and administrative regulations, high overall taxes and social security contributions, a lack of trust in the institutions and administrative procedures, lack of access to formal property, a long-term decline in the tax-paying ethic, and a broad acceptance by the wider public of illicit work are estimated as factors which all contribute to high informality rates in Albania.
                    [post_title] => Informality affects more than a third of workers in Albania, study finds
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            [post_date] => 2017-01-27 11:22:42
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            [post_content] => TIRANA, Jan. 25 – Albanian President Bujar Nishani has summoned the National Security Council over the failure of authorities to arrest a man accused of being a notorious drug trafficker, who also served as a former local government official of Saranda, Klement Balili.

Albanian Serious Crimes Prosecution Office has launched criminal investigation against Balili based on an arrest warrant by Greek authorities in May 2016, in the aftermath of an anti-drugs operations conducted with the assistance of U.S. Drug Enforcement Agency.

President Nishani decided to summon the National Security Council after Speaker of Parliament Ilir Meta sent an official letter arguing the importance of the meeting “to address the lack of actions of all law enforcement institutions for Balili’s arrest.”

In his letter, Meta explains that Balili has not been arrested and delivered to justice regardless of the “procedural acts and charges filed at Albania’s and international respective bodies.”

According to Meta, Albania’s US and other international partners have expressed their concerns over Albania’s incapability to arrest Balili.

“Summoning the National Security Council on this matter will be a testimony of the seriousness of Albanian institutions to address concrete responsibilities and their commitment in dealing with issues that have an impact in the country’s national security,” Meta said.

Last year, U.S. Ambassador Donald Lu criticized Albania’s lack of will to arrest Klement Balili, also dubbed as the “Escobar of Balkans.” According to Lu, Balili could not have escaped justice without the support of elements from the state and the political class.

U.S. Ambassador warned if Albania can not arrest Balili, than the country is not serious about the fight against drug trafficking.

“If Albania cannot catch Klement Balili, how will it go after other big fish. Who will want to work with Albania? Who will believe this is a serious country in the fight against drug trafficking?” – Lu said at a conference last December.

Balili’s involvement in drug trafficking came under spotlight in 2016, when Greek police in cooperation with the U.S. Drug Enforcement Agency arrested dozens of members of a large criminal organization led by the Albanian local government official and launched an arrest warrant against him.

Greece sent the arrest warrant to Albania on two occasions along with thousands of documents as evidence for Balili’s involvement in the drug business, but local authorities officially said that the process was delayed by the translation of the materials.

Independent experts and the opposition parties have warned that Balili escaped arrest as a result of his political ties, and have called for the resignation of Minister of Interior Affairs Saimir Tahiri.

 
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