European Commission recommends granting EU candidate country status to Albania.

By bne IntelliNews October 17, 2013

The European Commission has recommended granting EU candidate status to Albania on the understanding that the country continues to take action in the fight against organised crime and corruption, the EC said in its 2013 Progress Report on Albania.

In order to be able to move to the next stage and open accession negotiations, Albania needs to meet further key priorities, with particular focus on administration reform, the rule of law and fundamental rights. Constructive and sustainable political dialogue will remain essential for a successful reform process, the report read.

In the assessment of the political criteria, the Commission concluded that Albania has made further progress fulfilling the Copenhagen political criteria for membership of the EU, which in general require stability of institutions guaranteeing democracy, the rule of law, human rights and respect for and protection of minorities.

Despite the tense and polarised political climate ahead of the June general elections, the vote marked tangible progress with respect to previous practice, therefore meeting the key priority on the conduct of elections. The elections themselves were competitive and conducted in an orderly manner, according to the EC.

Government and opposition cooperated to adopt a number of important legal acts in Parliament including the Law on Civil Service, the amended Law on the High Court, and the rules of procedure of Parliament. Albania took initial steps towards improving the efficiency of investigations and prosecutions in the fight against organised crime and corruption.

As regards to the economic development, the EC underlined that consensus on the main fundamentals of a market-oriented economy has been maintained. Macroeconomic stability was broadly preserved, but vulnerabilities remain. In particular, the relatively high and increasing government debt and its short-term bias are a cause for concern, as they represent a source of macro-financial vulnerability, especially following the abolition of the statutory debt ceiling. The accumulation of public arrears reflects serious weaknesses in public finance management. Budgetary planning continues to be weak, reflecting optimistic revenue projections and leading to the need for rebalancing.

Macroeconomic stability continued to be enhanced by a sound monetary policy, which was successful in keeping inflation low and anchoring inflation expectations. The monetary policy easing was swiftly reflected in interbank rates, the primary market for government security and also in deposit rates. However, the pass-through to lending rates remains limited due to increased risk premia amid a growing share of non-performing loans.

There was a slight improvement in the labour market but the informal sector remains large and unemployment is persistently high, the report read.

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