TIRANA, Dec. 5 – The Albanian government has finally officially reacted to a bill awaiting the final approval by the Italian Senate that puts at risk the booming call center industry in Albania by tightening rules for the transfer of services to non-EU countries such as Albania.
In a letter to the Italian government through its embassy in Tirana, Albania is lobbying the Italian Parliament to make some final changes to bill which it says punishes only Albania as a non-EU member country, urging Italian MPs and senators to consider Albania as a safe data protection and EU candidate country on the verge of opening accession talks with the EU.
The letter comes following a meeting Albania’s economy and social welfare ministers had with representatives of call center industry, one of the country’s rapidly growing industries in the past decade, currently employing about 25,000 young men and women, the overwhelming majority of whom working in Italian and Albanian-run companies offering customer services and marketing campaigns for Italy-based companies.
The rather late appeal by the Albanian government also comes at a time when the Italian Chamber of Deputies has already approved the bill and the Senate is scheduled to examine it within this month as part of the 2017 budget and fiscal package. The situation has further complicated after Italians did not back constitutional changes in a referendum held last Sunday, triggering the resignation of Prime Minister Matteo Renzi and a possible new political crisis in eurozone’s third largest economy, also with implications for Albania.
Italy, the host of some 500,000 Albanian migrants, is Albania’s main trading partner, one of the top investors and main sources of remittances.
In its letter to the Italian government, Albanian authorities say the bill targeting to promote youth employment in Italy, mostly affects Albania as a non-EU country but does not stop the transfer of call centers from Italy to other EU members with cheaper labor costs such as Romania, Croatia or Slovenia where Italian companies are already present and have a Plan B to move to in case the Italian Parliament okays the proposed changes.
“In fact, if the text approved by the Chamber of Deputies remains unchanged, the decree will only punish Albania, leading to a decline in investments by call center companies operating in Albania and having a considerably negative impact on the employment of Albanian youngsters. In the meantime, Italian call center operators, will not transfer back their activity to Italy, but will move (as they did in some previous cases) to EU countries where labor costs are lower, primarily Romania,” the Albanian government says.
Government authorities say Albania already offers guarantees about data protection and urges Italian MPs and senators to respect mutual cooperation deals by making necessary changes to the law so that EU candidate countries on the verge of launching accession talks such as Albania are equally treated as EU member countries in the new law.
“Companies operating in Albania are subsidiaries owned by Italian parent companies. It is exactly for this reason that Albania cannot be seen as the only beneficiary of this industry as the economic advantages have been mutual. The proposed legal changes also run counter to bilateral deals of good neighborhood and cooperation as well as deals on labor and investment and other development cooperation agreements,” reads the government letter.
“The legal changes come at a time when Albania has obtained the EU candidate country status and EU member countries, with the strong support of Italy and its Foreign Minister Paolo Gentiloni have expressed their readiness to launch accession negotiations with Albania in December,” it adds.
Regarding the data protection issue, the Albanian government says Italy’s Data Protection Authority has signed a cooperation protocol with Albania’s Commissioner for Data Protection under which “Italian citizens managed by call center operators in Albania are offered the same attention and security level they would have benefited in case of being managed by call centers operating in Italian territory.”
“Lastly, we would like to underline that Albania is a European country where Italian language and culture is far more widespread than in any other country and this because of the physical proximity and the friendly relations that have historically linked the two peoples,” concludes the letter.
The Italian legal changes have sparked rising concern among Italian and Albanian investors over the past couple of weeks.
Gentian Drenova, the head of the Call Center Association in Albania, says if approved, the law would have severe consequences for Albania, one of Europe’s poorest countries where youth unemployment rates are at about 30 percent.
“The law will block every new investment. In the meantime, it’s almost 6 months now that no Italian company has been coming to Albania because of fearing the law,” says Drenova.
Marin Gjonaj, an Albanian investor in one of the leading call center operators in Albania, says many companies financially affording to leave Albania are already thinking of moving to Romania.
“Italy will not benefit, the companies will not go back to Italy. Italian companies operating in Albania will move to Romania and Croatia. Many of us will move to Romania. Albanian companies who can afford it are already thinking of moving to Romania,” he says.
The changes which are pending the final okay by the Italian Senate have created panic among some call center owners who say 25,000 jobs in Albania are endangered as Italian MPs are about to tighten rules for the transfer of Italian call center companies to non-EU members and make it compulsory for them to tell which country they offering their services from.
Other investors say the panic is unjustified as the Italian legal changes only curb the expansion of the industry by tightening the transfer of call centers to non-EU countries, but pose no threat to current businesses operating in Albania.
Agron Shehaj, a successful Albanian investor in the call center business, says there is no room for immediate panic.
“The current form of the draft law and the way it is intended to be approved poses no threat to the closure of call centers in Albania. The panic that has spread is unjustified. The thing is there are some rules that prevent the displacement of jobs from Italy to Albania for those who intend to invest in Albania or those who are already in Albania but want to expand their businesses. This will simply curb it,” says Shehaj.
Shehaj who in 2008 founded IDS, the country’s biggest call center currently employing some 3,000 people, sold the business to a London-based company for €10 million in late 2014. He still serves as its administrator.
The legal changes were initiated by Italian trade unions worried over the massive transfer of Italian call center and their services to Albania, where cheap labour costs and good Italian language skills make it a much sought-after destination.
Italian legal changes envisage huge €150,000 fines for call centers whose operators don’t inform customers about the country they are calling from or when answering to customer enquiries, something which up to now was avoided.
The legal changes also make it more difficult for Italian companies to change their location or contract non-EU third parties who have to provide guarantees about data protection.
Data shows there were 847 call center companies operating in Albania at the end of 2015 employing about 25,000 people, compared to 414 in 2014 and only 75 in 2010 when Albania emerged as an attractive call center destination for the Italian market due to cheap labor costs and language skills by Albanian youth.
This service mainly engaged in marketing campaigns and customer service for big operators in Italy has seen a boom in the past five years mainly due to low operational costs and the fluent Italian that Albanian youngsters speak.
Operating costs are estimated three times lower compared to Italy where average wages for a call center job range from €900 to €1,000 compared to €280 to €350 in Albania.
