“Central bank must continue to be an essential actor in the EU integration process of Albania”

During his speech at the closing event of the Twinning Project “Enhancing Bank of Albania’s alignment with EU Acquis”, the EU ambassador, Luigi Soreca said the pandemic represents an unprecedented challenge for Albania in terms of economic growth and financial stability. According to him, the substantial European support, in the form of (1) 26 Million Euro to help economic recovery, (2) 70 Million Euro to support social inclusion and (3)the adoption of an Economic and Investment Plan for the region, will help the country mitigate the negative impact of the crisis.

“The disbursement of 180 Million Euro of Macro-Financial Assistance approved with the EU will also alleviate external financing needs. This response package demonstrates the European Union’s solidarity and firm commitment to the region,” the ambassador said.

The Central Banks play a key role in overcoming the deep recession resulting from COVID. Central Banks are and remain central actors of any macro-economic policy, a point firmly highlighted during the financial crisis, more than 10 years ago.

“We welcome the temporary measures put in place by the Bank of Albania, and we congratulate Governor Sejko for his action,” the EU diplomat added.

According to him, those measures have helped to:

  • First, keep liquidity up and banks stable so far,
  • Second, enhanced its operational capacities to guarantee the sufficient cash supply to the economy and;
  • Third, facilitated electronic payments.

However, the full impact of the pandemic crisis is yet to be assessed.

The ambassador went on to say that it is reassuring that the Central Bank maintains a prudent and sustainable monetary policy and guarantees a close supervision of the banking system.

“The EU funded twinning project that we are closing today has been highly beneficial in supporting the Bank of Albania in this objective of further aligning with the acquis. I encourage the Bank of Albania to move ahead with the alignment with the EU Acquis on the Bank’s independence and accountability to Parliament, in line with last years’ recommendations of the European Commission,” Soreca added.

According to the ambassador, despite the difficult implementation of the project due to pandemic, there has been fruitful cooperation between the implementing partners and the Bank of Albania in strengthening

  • macroeconomic and financial stability,
  • bank supervision,
  • auditing and
  • payment systems.

The Bank of Albania is currently also benefiting from a 2 million Euro regional IPA project. Its aim is to strengthen central banks’ capacities in the Western Balkans with a view to the integration to the European System of Central Banks.

The twinning and the regional projects are substantially supporting the implementation of the policy recommendations under Chapter 17 (Economic and Monetary Policy) of the acquis and the joint Policy Guidance on monetary policy under the Economic Reform Programme exercise.

In conclusion, the ambassador said: “In view of the very good results achieved by this twinning, we are ready to consider using our technical and financial instruments to continue supporting the Bank of Albania – which must continue to be an essential actor in the EU integration process of Albania”. TemA

 

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