IMF: Lower debt, future is unsafe

The recent report of the International Monetary Fund warns the Balkan countries that the economic crisis and the challenges for overcoming it are very big.

IMF says that all countries are endangered, even Albania that “successfully overcome the 2009 crisis through reforms”.

The Italian IMF experts that created the report for the crisis effects on Southeastern Europe, note that the six countries, Albania, Montenegro, Macedonia, Serbia, Croatia and Bosnia are feeling clearly feeling the negative effects of the world financial crisis.

“These countries are under pressure for financing the external debts, the internal debt and the government budgets”, the report underlined.

Albania

IMF experts did not forget to mention the public debt situation, which is approaching the 60% and is threatening the economy due to the cost for paying the obligations.

The concern of the highest monetary institution is related with the lack of the necessary measures for confronting the future, at least until 2013.

The point of contradiction between the government and the IMF, is the loan level, since the fund suggests lowering it at 50% of the GDP, while the Prime Minister declared that the government will not cross the 60% level, otherwise there would be consequences.

In fact, IMF admits that the measures would require a harsh fiscal discipline, such as the expense reduction and tax growth.

IMF has been saying for a long time now that it would be better for the country to increase taxes for businesses and a review of the social contribution measures.

The report says that very soon, Albania and Croatia will be able to follow the example of Serbia and Bosnia Herzegovina, by taking drastic measures for cutting expenses and increasing taxes.

As for the banking recommendations, the IMF says that there is needed a stronger supervision, while the business needs structural reforms for an improved environment.

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