Politics keeping economy strong

TIRANA, Dec. 20 – For sure Albania is feeling the negative effects and impact of the global and European financial crisis. But still it is staying strong and that may give good credits to the government.
But is its policy a sustainable one that will secure a continuous stable situation in the near future?
The situation beyond that does not speak so favorably.
The government says that it will continue to raise salaries and pensions, and continue investment in big infrastructure projects like the Tirana-Elbasan highway, despite continuous calls from the international community (the IMF and the World Bank).
The prices are reaching high levels making the life of Albanians poorer. The government is trying to impose itself on the businesses not to make the usual price hikes for the Christmas and New Year festivities.
The opposition cried loud Tuesday when the parliamentary commission on economy did not approve their offer of reducing the value-added tax for the most used or basic food items and also the energy.
The governing Democratic Party lawmakers said that would disrupt the whole tax system which they boast of and would bring the whole economy to its knees.
Weather has not been on the government’s side either.
Due to the lack of continuous rain the local production of electricity has been low and KESH has had to import power.
Only recently the government approved a loan of $50 million for KESH to continue to buy electricity. The opposition says that this will continue to increase the budget deficit, which remains on the brink of the risk level of 60 percent of the GDP.
Meanwhile Bank of Albania Governor Ardian Fullani confirmed Monday that the Albanian banking system was sound, fully liquid and not exposed to the crisis in the region. He added that fiscal policies have stimulated the economic activity in the country during 2011, while inflation was kept within the Bank′s 2-3% target rate.
Finance Minister Ridvan Bode noted that Albania successfully withstood the first shock wave of the crisis in the region thanks to a stable economic system and effective policies pursued by the Central Bank
Those are all good words to hear from the top persons in charge of the country’s money and economy. But is Albania capable of coping with such a crisis that has swept and covered the whole European area?
Hardly so. Albania has most of its trade exchange with the EU member countries, and its closest neighbors, Italy and Greece, both the main the weak points in Europe.
And Albanian immigrants, most of them in Greece and Italy too, have significantly reduced the remittances sent to their families, now trying to make ends meet for themselves.
It is good news that the ruling Democratic Party and the Socialist Party-led opposition appear to be working to reach a consensus to defuse the existing political crises which has stalled Albania’s EU integration.
The two sides have agreed at the parliamentary integration committee to start working on a New Action Plan draft to fulfill the twelve EC recommendations.
So, let’s hope that the European crisis will be kept under control by Europe and Albania in its sidelines will be able to survive in the existing terms.