18.4.2007 by admin.

UN prosecutor blames Romanian officers for Kosovo protesters’ deaths

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18.4.2007 by admin.

Credit continues to grow in Albania

18/04/2007

For two years in a row, the number of loans has increased by over 50% in Albania, and the country is drawing increased attention from well-known European banks.

By Jonilda Koci for Southeast European Times in Tirana – 18/04/07

Central Bank Governor Ardian Fullani says he expects more foreign banks to invest in Albania. [Getty Images]

Credit growth in Albania continues to stay strong, increasing by 55% in 2006, according to the Bank of Albania. About 1.5 billion euros in loans last year supported the Albanian economy, especially small and medium enterprises.

“The banking system in Albania has been transformed into a promoter of the country’s economic sustainability, by extending funds to the economy,” said Central Bank Governor Ardian Fullani.

For the second consecutive year, Albania is experiencing a credit boom. In 2005, loans increased by 75% and credit amounted to 14.6% of GDP. However, the country is still below the regional standard — 25% of GDP.

Around 70% of the loans are distributed in foreign currency — euros and dollars — due to better interest rates. Nevertheless, the percentage of loans distributed in the national currency, the lek, is on the rise. Most loans are granted for business purposes — trade, construction and industry. Recently, however, banks have been competing fiercely for the remaining market.

Although the expansion of credit can spur economic growth, central bank officials worry about a corresponding increase in bad credit. To address this problem, the bank is opening a credit bureau, which will scan creditors’ data to avoid fraud and build loan histories for clients.

Well-known European banks have been taking an increased interest in Albania. One of the largest banks in Italy — San Paolo Imi — bought a majority stake in the American Bank of Albania last fall. Three years ago, Austria’s Raiffeisen Bank began operating in the country, via the privatisation of the state-owned Savings Bank of Albania. In all, 17 banks currently operate in Albania, most of them holding foreign capital.

“The entry into the market of distinguished European banks is an accomplishment of last year, which is expected to continue during the current year,” Fullani says. Indeed, France’s Societe Generale is now concluding its acquisition of a majority stake in Popular Bank — a young Albanian bank owned by a number of Albanian businessmen.

According to the Albanian business magazine Monitor, a number of prestigious German and Austrian banks are gearing up to enter the Albanian banking sector. Germany’s Deutsche Bank, Austria’s Erste Bank, the Austrian-Italian bank Unicredito, Greece’s Eurobank and Hungary’s OTP are among those that have expressed interest.

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18.4.2007 by CrniLabudovi.

OSCE denounces attack on Serbian journalist, local police probe continues

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18.4.2007 by CrniLabudovi.

Romanian political crisis runs a high economic risk

17/04/2007

The ongoing political instability in Romania is undermining the country’s appeal to investors, analysts say.

By Paul Ciocoiu for Southeast European Times in Bucharest—17/04/07

US Ambassador to Romania Nicholas Taubman (left) warns that recent political feuding in Bucharest may deter foreign investment. [Getty Images]

A recently released report from Ernst and Young suggests that many businesses are interested in Romania but worried about its stability. Continuing political quarrels are undermining the country’s potential as a magnet for investors, it warns.

Out of 200 managers surveyed, 58% said they were concerned about political instability, along with poor infrastructure, a lack of research centres and inadequate living standards.

“At a time of an intense political crisis, there is a negative effect investment decrease in certain areas, mainly in those which much depend on the state administration, infrastructure and utilities,” says Ovidiu Nicolaescu, president of the National Council of Small and Medium Enterprises. In comments quoted by Radio Romania, he said the unstable political environment could lead foreign companies to begin channeling investments to other countries in the area.

The economic repercussions could be serious, Nicolaescu warns.

Political turmoil is also one reason behind the international ratings company Coface’s decision not to boost its rating for Romania, which stands at A4.

“The risks for 2007 mainly originate in the political environment, as the dissensions within the governing coalition may lead to sudden elections and slowing reforms, despite EU monitoring,” the Wall Street Journal quoted managing director Cristian Ionescu as saying.

US Ambassador Nicholas Taubman is also concerned about the impact of political instability on foreign investments.

“We need to be realistic and recognise that the recent political turmoil in Bucharest has raised doubts beyond Romania’s borders as to whether this is the right place at the moment to pursue investment opportunities. People in private industry and in government are asking a lot of questions about Romania, trying to understand where the country is headed,” he said.

“What I know for certain is that it is very important for Romania to continue to make progress in key areas such as justice reform and fighting corruption. Losing traction on these reforms would not send the right signal to Romania’s partners,” Taubman said.

The political crisis is far from over. Prime Minister Calin Popescu Tariceanu’s Liberals have succeeded in ousting President Traian Basescu’s Democrats from the governing coalition. They have formed a new alliance with the Democratic Union of Hungarians in Romania.

However, the new government is a minority one. It depends on support from the opposition parties, particularly the Social Democrats. As a result, political analysts say, its prospects are shaky.

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