Eurobond issue officially abandoned for 2010

TIRANA, July 12 – Albania has scrapped plans to issue a Eurobond in 2010, and will also not turn to the IMF at present even though it seeks more euro investment, Prime Minister Berisha told Reuters last weekend.
“In this such terrible situation as it is, we withdrew from the eurobonds,” said Berisha. “All countries which were (seeking) eurobonds withdrew because Fitch or Standard & Poor’s put Greece debt into junk status.”
The Balkan country had hoped to issue a 300-400 million euro debut eurobond by the end of May, but along with other regional countries saw market fears over the situation in Greece and elsewhere derail their plans.
Tirana wanted to use the eurobond to pay off an expensive 192.6 million euro commercial loan. Berisha added the eurobond was off for this year and maybe into the future as well.
Montenegro and Macedonia have also delayed plans for new eurobond issues.
The Albanian Prime Minister added that he did not favour turning to the International Monetary Fund for a loan because he differed in his economic approach, which sees investment in items such as infrastructure as key to economic growth.
“They care only for macroeconomic stability. It will be difficult for them to help,” Berisha said. “Fundamental is to try to revive and keep growth.”
“What was the bubble? The bubble was growth based on the consumption. Growth must be based on the investment.”
Berisha made the remarks after telling a conference of regional leaders and officials at the Adriatic resort of Dubrovnik that his economy was heavily dependent on the euro even though the lek is the national currency.
“More injection of euros will be vital in order to help us prevent a difficult and serious situation in the future,” he told the conference which included the French, Polish, Bulgarian, Croatian and Slovenian prime ministers. “The euro has become a Damocles sword for our euro-ised economy.”
In the interview, Berisha said he was referring to the need for more European Investment Bank and European Bank for Reconstruction and Development investment in infrastructure projects in the former Stalinist country
“If investment stops, growth falls because of that,” he told Reuters. “The best way to invest in growth is through infrastructure.”
At the end of June, Berisha said his government would cut spending by 25 percent in a effort to halve the budget deficit in line with advice from the IMF.
The IMF in March said Albania should halve the deficit from 7 percent to 3 percent of GDP and cut the public debt from 59.5 percent of GDP. It sees GDP growing 2 to 2.5 percent this year, the same rate it also calculated for 2009.