Mrs. Romana VLAHUTIN – European Union Ambassador to Albania

Mrs. Romana VLAHUTIN – European Union Ambassador to Albania

July 23, 2016
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“Justice Reform will contribute to creating a more predictable and transparent business environment in Albania”

Romana Vlahutin, Ambassador of European Union in Albania, panelist 2 Session 1FIAA: What is your impression on the current business operating environment in Albania?

Mrs. Vlahutin: Despite its dominant role in the economy, business is held back by significant shortcomings in the regulatory environment and the rule of law. To Business Operating in Albania, the challenges remain mainly related to judicial system, property rights enforcement, contract enforcement, fight against corruption and informality.

Whereas, Albania has great potential to develop in terms of its geographical position, natural resources, and relatively cheap labor force, it still has to improve labor skills, to improve trade logistics, reduce the regulatory burden to businesses and ensure law enforcement in order to increase its competitiveness and attract foreign investors. 

What are the Efforts the EU Delegation is currently making to improve the operating environment in Albania?

Economic governance is one of the three ‘fundamentals first’ pillars of the EU enlargement strategy, mirroring developments within the EU to strengthen economic policy. A new approach has been developed to help the enlargement partners to strengthen macroeconomic stability, boost growth and meet the economic criteria for accession.

The EU has been supporting Albania in moving forward with very important reforms such as justice reform, public administration reform, public finance management, actions towards fighting corruption etc.

It has also been supporting the EU acquis-related issues, in particular administrative capacity, adoption and enforcement of legislation and related investments in the transport, water agriculture and social development sectors, as well as in environment, cultural heritage and support to small business through a joint program with the EBRD.

In its 2014-2020 IPA programming the EU is going to provide more than € 640 million support to Albania in strengthening the democracy and governance; rule of law and fundamental rights, competitiveness and innovation, agriculture and rural development, as well as education, employment and social policies.

What expectations the EU has for the current government, in terms of reforms and improvements?

Albania together with the other Western Balkan countries that are aspiring for EU Integration, are actively participating in the so-called EU supported Berlin-Process. The WB countries are committed to work together and move forward the regional connectivity agendas, and increase competitiveness of the region.

We expect Albania to stay committed to the reforms that would move the country forward towards EU Integration and in particular the Justice Reform. This is what the citizens want to see and to believe in. This is what businesses expect in Albania, functional and trustworthy institutions.

Albania like the other WB countries has adopted and presented to the European Commission the Economic Reform Program 2016-2018, which lists a set of economic reforms that aim to boost competitiveness and growth. While there are positive signs about a recent pick up of growth in the region and a positive rebalancing of growth towards more investments and exports, there are still many obstacles to economic development in these economies.

Positive steps have been taken in reforming pensions, energy sector, education system, labor market, territorial administration and public finance management, but further actions are needed to fully implement the ongoing reforms and to undertake new ones that would tackle the obstacles mentioned above.

While businesses challenges are spoken out by several business associations and representatives of both domestic and foreign investors, we would expect the Albanian authorities to continue the reforms that would further easy the doing business and raise the investors trust and interest to come and stay in Albania.

What contribution the justice reform can make for Albania’s economic standing?

The EU attaches a crucial importance to the justice reform for which Albania has been working hard for almost two years. We have repeatedly said that a deep, comprehensive and uncompromising reform of the judicial system is the key to all other reforms and to Albania’s progress in its EU integration path.

The reform should play a crucial role in consolidating the rule of law in Albania, addressing other key priorities, especially fight against corruption and organized crime. There is a clear link between the reform and Albania’s economic standing as the reform will also contribute to creating a more predictable and transparent environment for business and investors, thus fostering the economic relations between the EU and Albania, which, despite positive steps, are still far from their full potential.