Government, eager for cash

In the last auction, the interests of treasury bills with a maturity of 1 year reached 7.56%, the highest level since last November.

Government bond interests have been showing increasing tendencies for some months, same as during 2009, when the difficult situation of the Treasury of State increased their value to a record breaking 10%.

Compared to last December, the interests of one year maturity bonds increased with 0.5 percentage points. The only cause of this increase seems to be the government’s high demand for loans, dictated by a weak performance of the tax system and also by the high electoral expenses. This years’ budget has authorized the government to take 28.2 billion ALL in loans from the inner market, for the entire year.

According to the Ministry of Finance, the government has taken 21.7 billion ALL in loans until now, or 77% of the total amount allowed for the entire year. The government alone has taken more loans than all businesses and individuals put together, although the weight of the state in the economy is twice lighter than that of the private businesses.

The government is making another review to the annual budget, in order to reduce the expenses and to stop the debt increase. Sources say that IMF experts have arrived in Tirana.

Nothing has been decided up to now, and no one knows if the government will follow the plan against the deficit, or if it will ask the Parliament to pass another budget increase.

Despite the political decision for the management of Albania’s finances, the numbers are showing once again that the battle with the debt has returned in our government, same as during the last electoral year of 2009.

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