Scary debt increase

Experts have unanimously said that the first step is that of paying the obligations to the private business, which would help the economy, but they are divided on what way should be followed for putting the public finances under control.

“This tax system does not support the financial stability of the country”, argued the former Minister of Finances, Arben Malaj.

“This structure does not guarantee the log-term stability and it needs to be reviewed. The situation warned by the International Monetary Fund should not create panic, but it should increase the responsibility same as it does in other countries when they see that the economy is going bad”.

But Sybi hida, a right centered Parliament Member, thinks that the increased debt would have negative effects on the economy and the public finances.

“I think that it is not reasonable now to intervene with high taxes for the business, which could damage their balance”, Hida declared.

Sulo Hader, dean at the economic faculty, supported a combinated package that puts spending under control and reviews taxes, but underlines that these should be followed by another necessary element, that of the reforms that will improve the business climate.

“Structural reforms and easier business cost, such as those that are related with the power supply, or even the reduced property costs, should be implemented to encourage growth”, Haderi declared.

“Removing barriers in economy, facilitating the situation for the business, removing the additional taxes for corruption and bad administration, schemes for small and middle businesses are very necessary for supporting an economic growth and having stability in our country”, Malaj declared.

The public finances started giving the first signs of deterioration in 2008, when the Democratic Party government started increasing spending that is financed with increased debt.

Combined with the economic growth slowdown, the high deficit policies have increased the public debt from 53.7% in 2007 to 70% this year, according to the International Monetary Fund, a level considered as dangerous for the Albanian economy.

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