What about the promised wage increase?

The government, led by Prime Minister Berisha, has promised that it is going to compensate for inflation and increase wages. The Minister of Labour, Social Affairs and Equal Opportunities prepared an April draft decision to increase wages by three percent. However, the draft was not approved by the Albanian government because of strong opposition by Minister of Finance, Ridvan Bode. Surprisingly, the Minister of Public Order supported Bode.
Bode declared that he opposed the rise of wages because the government needed more time to monitor the situation and measure inflation very carefully. Bode further said that the government was committed to increasing wages more than three percent in July. Bode estimated that the Albanian government was going to use Euro 8 million per month, or Euro 48 million for the rest of 2008.
However, the IMF has warned against any massive wage rise. Instead, the IMF advises the Albanian government to provide direct economic help only to those in the most need. Otherwise, they argued, a general wage raise is going to increase inflationary pressures on the demand side causing a wage-inflation spiral. The Governor of the Bank of Albania spoke of the same concern in a joint press conference with IMF representatives. For the moment, it is unclear what the Albanian government is going to decide.