TIRANA, April 18 – The European Commission says Albania continues to remain moderately prepared in developing a functioning market economy and coping with competitive pressure and market forces within the EU.
In its latest country report published this week, the Commission recommends opening accession talks with Albania, an EU candidate since mid-2014, but the final say is expected next June by the EU’s heads of government.
The report notes that while the Albanian economy growth has been progressing and public debt and non-performing levels have been reduced, improving the business climate and strengthening rule of law remain key to prepare the country for EU accession.
“Reforms crucial to improving the business environment progressed but require further efforts, including reduction of the informal economy. The comprehensive judicial reform advanced but needs to be fully implemented. The new bankruptcy law entered into force and should strengthen the insolvency regime. However, business-relevant regulations remained cumbersome and shortcomings in the rule of law continued to hamper businesses and deter investments,” says the report.
The European Commission says progress has been made on energy and transport infrastructure and digitalisation, although shortcomings related to unfavorable business climate and poor diversification of the country’s exports hinder Albania’s competitiveness and trade.
“The quality of education needs to be raised at all levels, not least to better equip people with skills that the labour market needs. Foreign trade remains below potential and sectorally concentrated. Albania’s capacity for research, development and innovation remains low,” says the report.
Albanian producers have earlier complained that the EU-backed Regional Economic Area initiative that the six Western Balkan leaders agreed to in mid-2017 at the Trieste Summit will put ‘Made in Albania’ products at a disadvantage unless the Albanian government provides tax and subsidy incentives to make them more competitive regionally.
Back in July 2017, Western Balkan leaders agreed to develop an EU-backed regional economic area where goods, services, investments and skilled workers can move without obstacles as the EU has hinted regional countries could join by 2025.
The July 12 Trieste Summit was the fourth annual summit of Western Balkan leaders held as part of the Berlin Process initiative on Western Balkans EU integration initiated in 2014 with the Conference of Western Balkan States.
Only Serbia and Montenegro have currently launched accession talks. Enlargement prospects remain pessimistic in the short and medium-run considering internal developments in the bloc with the Brexit, the migrant and financial crises as well as rising populism high on the agenda.
Catching up with the average EU income could take Albania and other EU aspirant Western Balkan economies about six decades unless current sluggish GDP growth doubles to 5 or 6 percent, the World Bank has warned in a recent report.
