Andrew MacDowall in Tirana -

As campaigning kicked off for Albania's June elections, Prime Minister Sali Berisha is keen to build and capitalise on a new wave of optimism since the country formally submitted its application to join the EU on April 28. That occasion marked "the return of my nation to the family of European nations," a beaming Prime Minister Sali Berisha has said, suggesting a mission accomplished. In reality, however, the event is merely the symbolic beginning in the latest stage of Albania's long and tortuous path to the EU, and full acceptance as a stable and economically developed liberal democracy.

The timing of the application was ostensibly chosen to sustain the momentum provided by Albania's entry into Nato on April 1. This occasion was marked with orchestrated celebrations somewhat reminiscent of the communist days - though, unlike in more sceptical countries to the east, Nato membership is vastly popular in Albania, with 90%-plus public support. Some observers commented that the EU bid (and the rallies) might actually have more to do with the elections on June 28, but there is no doubting the symbolic importance of joining Nato to a country that was hermetically sealed from the outside world for much of the post-war era, as alliances with the Yugoslavs, then the Soviets, then China, collapsed in acrimony.

EU membership is a whole new challenge, with even greater benefits than Nato - and commensurately more hurdles. The international community is taking the rather sanguine line of "a lot done, a lot still to do." Certainly, Albania has come a long way since 1997, when the country collapsed into anarchy after the failure of pyramid investment schemes, with the opposition seizing control of key towns and bandits filling a power vacuum in remote areas. Up to 3,000 people are thought to have died.

The country has clocked up GDP growth of more than 5% each year between 2004 and 2008, and the International Monetary Fund (IMF) expects that it will be the only economy to grow in Southeast Europe this year. Meanwhile, inflation has generally been restrained (other than a spike in mid-2008 largely caused by external factors) and the national debt has been paid down and remains at a manageable level. Political stability has also been achieved, and external relations are characterised by the strong support of the US, which views Albania as a key ally in a troublesome and strategically important region - hence almost unquestioning support for Kosovo's independence from the Clinton and Bush administrations.

10-year wait

While the EU has stated that Albania's accession could come as early as 2015, one international insider told bne that this is excessively optimistic, forecasting a 10-year wait at best.

Economic growth has come from a terribly low base - this is still the second poorest country in Europe (after Moldova). Per-capita income was $3,500 in 2008, according to the Bank of Albania, around a quarter of the EU average - and even this may be an overstatement. Were it not for its substantial metal deposits, most notably chrome, the country would be an economic basket case. The oil industry is handicapped by aged technology, while previously fertile fields that could boost exports lie untended due to migration to the cities and abroad, with complex land ownership issues holding back agricultural investment.

Albania has a trade deficit exceeding 25% and a current account deficit of 9.8% (according to a 2008 forecast by the IMF), and the latter will be more difficult to finance in this year's slowdown. While the shortfalls are not in themselves a hindrance to EU membership - the UK has a yawning current account gap - they are indicative of relatively low productivity and competitiveness.

Furthermore, the international observer drew attention to low administrative capacity. Brussels, burned by its experience of fund wastage in Bulgaria, will be loath to admit Albania until the country meets exacting standards of efficient public spending, as well as adequate judicial oversight. As in Bulgaria, corruption and organised crime remain serious problems, which some believe will take a generation to eliminate. Albania is one of Europe's major human trafficking hubs, and evidence of substantial progress in tackling this blight will have to be produced before Albanians are issued with EU passports, a main campaign promise of PM Berisha. Steady economic progress is one thing, overhauling the country's administrative infrastructure quite another.

These concrete challenges are matched by political issues complicating Albania's route to the EU. While accession is not as controversial as Turkey's, as the country moves closer to the EU, electorates in existing member states are likely to become more wary of admitting a relatively poor, Muslim (though avowedly secular) country. It is perhaps only because Albania is so far from joining the EU that its membership has yet to become a sensitive issue.

For all the fanfare, Albania's leaders are generally aware of the challenges ahead. The populace, however, may be less so, which may mean a rude awakening as some of the tougher requirements imposed by Brussels start to have an impact on citizens' lives and jobs.

The most immediate litmus test of progress is June's election. Such is the broad policy consensus among the political class (liberalisation, harmonisation with EU standards, pro-Western foreign policy) the outcome of the poll may actually be less important than its conduct, according to Albert Rakipi, executive director of the Albanian Institute for International Studies (AIIS). The EU has clearly stated the need for a free and fair election and, should the result demand it, a clean transfer of power. Fortunately, the possibility of a return to violence looks extremely remote. Nonetheless, the authorities cannot afford to rest on their laurels, and irregularities will sound an alarm across the EU.

And after the election, the hard work of reform must recommence.

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