Albania faces long, hard road to EU membership

By bne IntelliNews July 16, 2014

Ben Aris in Tirana -


The Blloku (the Block) epitomizes everything good about Albania's break with its dictatorial past and the journey it has just begun towards full membership of the EU. But recent events there show how far it still has to go.

During the Marxist-Leninist dictatorship of Enver Hoxha the Blloku was literally walled off from the poorest people in Europe – a Forbidden City full of impossible-to-find goods and eateries for the elite. Today, it is full of regular people sipping rich Turkish coffee in the many cafes, drinking Turkish beer in bars, browsing in the western-branded shops and even eating at an outlet of "Albanian Fried Chicken" that looks suspiciously like its US namesake. In June, one street was even closed to traffic and filled with beer-covered tables for a small crowd to watch the World Cup on giant TV screens. Albania has come a long way since Hoxha was deposed in 1989.

But not far enough. On the morning of June 26 the tranquil atmosphere of the Blloku was rent by machine gun fire. A motorcycle carrying two men riddled Artan Santo, founder and CEO of Credins Bank, Albania's biggest private bank, with bullets in a professional mafia-style execution, before racing off and disappearing into the rundown city. The men had followed the banker from his home and the whole incident was caught on CCTV, but police were powerless and have failed to identify the culprits.

The shooting was a stark reminder of just how much work Albania has to do before it can join the EU – the process for which began when it was granted cherished "candidate status" at the end of June. High on the list of things to do for the government set by the EU is deal with corruption and organized crime, which are bad even by Emerging European standards.

Try, try, try, try again

Albania cleared the first hurdle on what will be a long road to EU membership on June 24 after the EU unexpectedly granted it "candidate status" on the country's fourth attempt. It was the small Balkan country's fourth attempt since 2009 to get on the ladder to join Europe's trade club; the last rejection was in December.

The decision was uncertain up until the last minute, but after the government agreed to settle a $100m dispute with Czech utility CEZ the day before and burnt fields full of marijuana around the lawless village of Lazarat a week earlier, the 28-nation bloc's foreign ministers gave Albania the thumbs-up at a meeting in Luxembourg.

EU Enlargement Commissioner Stefan Fule said on Twitter the decision represented an "acknowledgement of reform efforts" by Albania.

The push to join the EU has been led by the former artist and now prime minister, Edi Rama, who came to power in June 2013 and pledged to push for EU membership. After speaking by phone with Fule, Rama also took to Twitter to say he was "proud that we all together did it. Thanks and gratitude to all of you."

Albania is now the sixth accession candidate alongside Turkey, Montenegro, Serbia, Macedonia and Iceland. However, none will have any chance of joining the EU in the next five years; on July 15, new EU chief Jean-Claude Juncker said there would not be any new EU countries for the next five years.

Drugs and power

The depth of the corruption problem and the government's commitment to making a change came together in the remote village of Lazarat in Albania's southern mountains near the Greek border.

For years, the village has produced with impunity tonnes of marijuana for export to Western Europe. According to European Drug Enforcement Agency estimates, the illicit crop accounts for up to a third of Albania's GDP and the government has been unable (and unwilling) to do much about the problem.

But faced with the prospect of being rebuffed by the EU yet again, Rama grasped the nettle only days before the EU ministers were due to meet and make their decision on Albania's application. After a four-day gun battle with locals, police finally captured the town in what was more of a military operation than a drug bust – Lazarat's residents apparently returned fire with anti-tank missiles and heavy calibre machine guns – to burn the fields and destroy the stockpiles ready for shipment.

Rama also cleared away another hurdle by settling a long-running battle with CEZ. The Czech utility bought a 76% stake in Albania’s sole electricity distributor in 2009, partly on the strength of promises made by the World Bank that it would intervene if things turned sour. And they did. In 2012 the local subsidiary CEZ Shperndarje clashed with the country’s main state-owned electricity producer KESH over tariff hikes it imposed on customers. The dispute came to a head in 2013 when the regulator simply pulled ČEZ Shperndarje's distribution license, in effect nationalizing the company.

The Czech government was not happy and threatened to block Albania's EU bid, while starting international arbitration proceedings to get back its initial €102m investment, plus what it had invested in subsequent years.

Again, just in time before the meeting of EU ministers, the Albania government struck a deal with CEZ to repay its original investment in installments through to 2018, which agreed to stop the arbitration process in return. "According to the agreement CEZ, after fulfillment of conditions precedent, will get in annual installments €100m in total, ie. the amount similar to initial investment into purchase of Albanian distribution company," the group said in a press release posted on its website. "Conditions for ending of arbitrage are part of the agreement."

Gaining candidate status is only the very start of the process: the right to hand in an application with no guarantee that it will ever be granted membership. The next step is to start the tough negotiations needed to agree on exactly what else the country has to do to be eligible, the so-called chapters. PM Rama said the membership negotiations will be "more intensive, the road is more difficult and the challenge becomes bigger… We are convinced that we shall do it despite the conditionalities set on us because those we have set on ourselves are much tougher."

And Albania will also face some resistance from the expansion-weary EU members. The UK, Germany and France were reportedly reluctant to grant the small Balkan state candidate status. The British government has already vowed to veto Albania joining the EU unless strict limits are imposed on the free movement of workers, but by that time the UK may have already given up its own seat at the EU table.



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