Debts that threaten economy

“The next years will have a very high cost, due to the collection of the debt interest and the principal that we should pay. This would cause the removal of many indispensable budget funds that would oblige the administration to make serious cuts even with the wages”, Malaj says.

Mr. Angjeli thinks that the Albanian economy has entered a dangerous phase, due to a vicious circle of debts that do not include only the government’s obligations.

“We have an economic debt that is not only connected with the unpaid loans but also with a mutual debt, especially in the construction industry that contains within itself 160 types of professions. This is shown by the existing market and the interruption of this chain would hit many cogs of the economy. Albania’s debt towards big companies and the debts of the companies among each other and the state are really dangerous, and the IMF warning comes at the right moment.”

The former head of Finances and Economy says that for overcoming this situation, the Albanian economy needs to reform. He adds that it is indispensable for Albania to determine the economic direction and the products it decides to produce; which productions would be competitive in the regional and European market.

The second way is that of reviewing the tax policies. Angjeli thinks that the flat tax has failed and Albania must return to the progressive tax. According to him, the big businesses that profit more must contribute more to the economy, while the flat tax creates a bigger burden on the common people and small businesses.

One day ago, the IMF listed Albania and Croatia as the only two developing countries that are deteriorating the public finances after the crisis.

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