TIRANA TIMES
As the Greek economy and state finances undergo an unprecedented crisis since the country joined the European Union, there are potentially serious implications for Albania, which has very strong human and economic ties to its southern neighbour.
Some immediate effects are already here as crippling strikes and unrest hit Greece. In the 48 hours before this paper went to press, one of the major border crossings was shut down by a strike of certain unions in Greece. As is often the case when Greek border police strike or are on holiday, long lines of waiting formed on the Albanian side, and hundreds had to divert their travel plans.
But these short-term affects are nothing in comparison to more gradual, but greater, negative changes that can come from the Greek crisis.
Top of mind is of course the huge number of Albanian immigrants in Greece. There are at least a half a million Albanians living in Greece, and as Greeks suffer, so will the Albanians that live there – perhaps even more so because they typically worked the jobs the Greeks themselves did not want. These jobs were often in construction and other manual labour, which were also the first ones to dry up in a bad economy. Albanian workers who might be lucky to have job must cover living costs, pay off debts to Greek banks, and if there is anything left, send remittances home to their families. Those without a job are even in worse shape economically. Often the solution is to simply return home to Albania.
And although there is no exact data at this point on the trend, anecdotally, Albanians are leaving Greece in droves.
Integrating this large number of former immigrants who return to Albania won’t be easy. Finding jobs for them might even be harder. One positive thing is that some are returning with some savings and new skills. If they put these to use in Albania to open a business and boost the economy here, it might be a boon for this country. But it is hard to understand at this point how successful they will be.
The unemployment due to the Greek crisis is also tied to the plummeting trend of remittances from Albanian immigrants to their families in Albania. Some decline is natural over time, but Bank of Albania numbers show larger percentages of decrease since the start of the global economic crisis. The Greek problems are likely to make things worse.
Beyond the human ties, there are also strong business ties that are likely to be affected. Greek companies have invested heavily in Albania, creating or purchasing Albanian subsidiaries. If the parent companies in Greece are in bad shape, their Albanian branches might face problems too. That has a ripple effect on employment and economic growth in Albania.
Perhaps the part that induces the most anxiety in both countries is the banking sector, which is so closely tied the massive lending that stands at the root of this crisis. Legally, deposits for a normal middle-class family would have are protected and insured in both countries by government entities, but that hasn’t stopped fears in Albania, where 35 percent of the banking sector is controlled by Greek banks. But Albania’s central bank has maintained that the connection is unfounded, as these are Albanian entities governed under Albanian rules, so their fate is not necessarily connected to parent banks in Greece. We live in a global world however, and if German and British banks are worried about the money they lend to Greece, it is natural there will be some anxiety in Albania too.
Beyond words or reassurance to the public through, the Albanian government and relevant institutions need to closely examine the implications of different scenarios that the Greek crisis will have on Albania’s economic and social life.
“Albanian think tanks and research institutes should also focus on this issue due to its wide-ranging implications for the country,” says Albert Rakipi, executive director at the Albanian Institute for International Studies.
Albania is far poorer than Greece, but in relative terms, until now it has weathered the global economic crisis better than expected. With Greece having huge issues to address, that might change.
The government keeps on referring to Albania as an example of economic growth, performing better than other countries. But you can’t escape a massive crisis like those going on next door with wishful thinking alone. It takes preparation.
Recent reports by international organizations and development banks have more or less arrived to the same conclusion — that the poorer neighbors of Greece in the Balkans will be exposed to the effect of the crisis there, with Albania perhaps being on top of that list due to the massive number of emigrants it has in Greece. If the crisis in Greece affects other euro zone members like Italy, the negative effects mentioned above could be multiplied. For Albania’s economy, this all means it might face a tough ride ahead.
