Economy experts say increased financing from the banking system, where Greek banks hold a considerable share, would further stimulate Albania’s growth which has stuck to around 2 percent in the past couple of years
TIRANA, Nov. 13 – Greek companies have reconfirmed their interest to continue their activity in Albania and further expand their operations despite the six-year recession in the neghbouring country expected to come to an end only in 2014. In a joint business forum focused on the role of banks, Greek investors pledged new investments in Albania but requested stable fiscal policies.
Economy experts say increased financing from the banking system, where Greek banks hold a considerable share, would further stimulate Albania’s growth which has stuck to around 2 percent in the past couple of years.
The seventh Hellenic-Albanian business forum held this week in Tirana is a well-established annual event significantly contributing to the strengthening cooperation networks among participants. Additionally, this year’s forum was of particular importance as it provided a useful platform of communication and interaction between the Greek and Albanian business communities, as well as with the new government of Albania, organizers said. This year’s forum aimed at analyzing the banking sector’s potential to support the Greek-Albanian business activities and the development of the economy in general, as well as the opportunities for business cooperation in this particular economic environment.
The event highlighted the Greek presence in the banking sector, and more generally in the Albanian economy to promote the opportunities for doing business and realizing the potential for economic and business cooperation between the business communities of both countries.
All banks of Greek interests (Alpha Bank, NBG Bank and Tirana Bank) operating in Albania, in 2012 held 18 percent of the value of total assets of the Albanian banking market (1.57 million euros of the total of 8.71 million euros) and 16.9 percent of the total value of the deposits, while 22.5 percent of bank branches operating in the country belong to banks of Greek interests, says Greek Reporter portal referring to the Albanian Association of Banks.
Crisis-hit Greece, the second most important trade partner and top foreign investor until 2010, dropped to the second most important FDI partner with Euro 525 million in 2011, down from Euro 620 million in 2010, and Euro 521 million in 2007 just before it plunged into its worst ever recession, according to Bank of Albania data. Greek businesses are present in almost every sector of the Albanian economy, including strategic ones such as telecommunications, the banking system, energy, industry, construction, trade and tourism, significantly contributing to the country’s economic growth.
The crisis in the past five years has also considerably hit trade exchanges between the two countries. The share of exports to Greece has almost halved dropping to 4.4 percent in 2012, down from 8.8 percent in 2008 while the share of imports from neighbouring Greece dropped to 9.5 percent in 2012 down from 14.6 percent in 2012, according to INSTAT data.
In its 2012-2014 economic and fiscal programme, the Finance Ministry says sovereign debt crisis in Greece has shown little impact on the Albanian economy due to the limited role Greece plays in exports and imports and due to the recent flexibility shown by exporting firms to diversify geographically.
Greece holds major share of capital in banking system
The Albanian banking system is characterized by a relatively large number of private banks, sixteen of them, overwhelmingly foreign-owned, financed primarily through deposits, and focused on the lending activity, mainly for businesses. The entire banking system is now privatized, and the largest share of the capital is owned by foreign entities. The country which held the largest part of the capital in 2012 is Greece (18.75 percent), followed by Italy (12.5 percent), France (11.7 percent) and local capital (10.66 percent), according to a study by Open Data research centre referring to central bank data.
Compared to 2010, there is a reduction of the amount of capital held by Greece (from 25 percent to 18.75 percent), and an increase of capital held from France (from 4.69 percent to 11.72 percent). This is the result of the acquisition of Emporiki Bank from France-based Credit Agricole. Other countries with an important weight are Austria, Switzerland, Germany, Kuwait and Turkey. The Albanian banking system does not present a noticeable concentration of capital in a particular country, and this can be considered a positive element due to the diversification effect, experts say.
ACIT: Greek crisis, a ‘Social Bomb’ for Albania
A huge wave of migrants returning home, lower trade exchanges, investments and remittances are some of the most obvious impacts the economic crisis in neighbouring Greece, the top investor and second most important trade partner, has had in Albania in the past five years, according to a study conducted by the Albanian Centre for Competitiveness and International Trade (ACIT). The study published in late 2012 found that around 180,000 Albanian migrants, or 18 to 22 percent of the total Albanian migrants in Greece, have returned home during the past five years, and there are few advisory and information services for investment and job opportunities.
