Administration to increase foreign debt

TIRANA, Sept. 18- The need to finance public investments of considerable sums have prompted the government to ask for more foreign debt, using commercial interest rates rather than soft terms. The option, through which this will be performed, is by issuing Eurobonds. Albania is unique in the region because the largest part of its debt is domestic debt, with some 67 percent of its debt being financed through Treasury bills. Only 23 percent has been taken from the international market, mainly through soft loans granted by institutions such as the World Bank, or the EBRD. Finance Minister Bode explained that the aim is to reverse this relationship. Following the debt assessment completed by the well-known company “Moody’s”, the government has a green light to ask the international markets for financing, though at higher commercial interest rates. Offers of 300 million euro have started with the Deutche Bank. Raising more foreign debt would upset the ration of debt towards GDP, something which the administration has still to persuade the IMF, which has asked for just the opposite. Foreign debt contributes to the economy; countries like Croatia have record setting foreign debt reaching 85 percent of GDP. The level of foreign debt in Albania currently is calculated as only 10 percent of the GDP.