What if Euro really ends?

The former governor of Bank of Albania, Shkelqim Cani, says that this scenario would have multiple effects.

“Euro is related with the EU; EU is our vision and this would destroy our vision. Returning to national currencies would create a not so soft avalanche in the economies of the respective countries. There might be a crisis, with many of them in recession, if not all of them. As result, we will have 70% of the exports with these countries that would receive a strong hit. Another effect would be the financial panic in banks and politics”, Cani declared.

Besides the negative effects in remittances or foreign investments, a great concern is with what is going to happen in the currency market.

“The currency exchange rate is one of the macro indicators that hits or receives hits by all other indicators. The Albanian experience has shown that each time that there are exchange rate fluctuations, the prices always increase and they bring all effects in economy”, Cani declared.

The public finances would have different effects, with the government having a lighter debt burden but a heavier situation with the national reserves.

“Albania has its debts in Euro, and in the beginning there could be advantages, because we would need less money to buy the Euros that would pay dhe debt. Our reserves are 60% in EUR, and a weak Euro would weaken our currency reserves”, Cani added.

The former Governor says that Albania needs to prepare for a reserve plan, to forerun such a scenario.

“The work is preparing for this possible scenario, and Albania must also work. The currency exchange rate has a plan B, the currency reserve has a plan B. The Central Bank must think if the currency exchange reserve will stay at 60%, or if will turn it into Dollars or any another currency”, Cani declared.

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