Trade and investments likely to diminish but Greek banks performing soundly, according to Bank of Albania, experts
TIRANA, Feb. 25 – As neighboring Greece continues to go through financial turmoil, economic experts in Albania say this country will definitely feel some negative effects from troubles south of the border, but there is no cause for major worry, especially when it comes to Greek-owned financial institutions operating in Albania.
The southern neighbor is the second most influential country in economic and trade terms for Albania, and the crisis in Greece will undoubtedly diminish Greek investments and export-import exchanges with Albania, according to economic analysts. Other effects could come from the fact that Greece is a huge foreign investor in Albania and more than 700,000 Albanian immigrants live and work there.
According to Bank of Albania Governor Adrian Fullani, Albanians need to be prepared to cope with the effects of the Greek crisis, which will be stronger in the economic areas where the Greek influence is strongest.
“The Albanian economy will see some effects in its foreign trade and, probably, in the [higher] cost of credit from Greek banks,” Mr. Fullani said.
He also told the media that people who are unfamiliar with the system should not worry about how safe it is to bank at Greek-owned institutions during the crisis. These banks are solid Albanian entities under BoA supervision, he said.
“Bank of Albania guarantees the Albanian public that Greek banks in Albania are Albanian entities, and as such, are supervised by the Bank of Albania,” Mr. Fullani said.
Albania’s former economy minister, Anastas Angjeli, agrees. If the global crisis began in the United States and England, where it involved the banking systems, the case of Greece is different, according to Mr. Angjeli.
“This is a public debt crisis. There are no toxic assets, and with a high index of profit in comparison with their European counterparts, Greek banks seeing high profits,” Mr. Angleli told DW.
In terms of investment, Greece is responsible for 27 percent of total foreign investments in Albania, totaling 800 million dollars. There are about 270 Greek businesses, some of which had to close during the crisis.
Investments taking a hit include manufacturers, food, retail and construction, where Greek investments make up 30 to 40 percent of the total.
“Foreign investors in Albania from Greece obviously will be affected by their situation in Greece, and will have a more limited opportunity to invest in Albania,” Mr. Angjeli told the German public broadcaster. “On the other hand, there is a Greek government program to support Balkan countries, where Albania participates for infrastructure funding, and a financially weak Greece will definitely affect the program.”
The consequences will hit Albanian families directly too, as Albanian immigrants in Greece will have less money to send home. BoA reports that remittances from Greece, as from other countries, went down considerably last year.
