PRESS CONFERENCE
Questions and Answers at the Press Conference of the Governor of the Bank of Albania on 29 May 2013

Question - Mr. Governor, can you please provide us with more elaborate information on your suggestion for a new fiscal rule? You have been mentioning it several times, today as well. Besides the chosen path, does the Bank of Albania have a more concrete platform about the level and time required to achieve fiscal consolidation?

Second, has the central bank made any analyses of the election campaign effects on Albania's economic activity, mainly in terms of the financial market volumes? At today's Supervisory Council meeting, you discussed an analysis of financial system expectations for the remainder of the year. Does it make an assessment of the impact of election situation and overall elections on Albania's economic activity?

Answer - Concerning the first question, we have broadly addressed this issue in the last two-three years. I believe that the recent months' meetings between the World Bank, International Monetary Fund, Bank of Albania and Ministry of Finance, pointed out the need - and this was one of our proposals - for a review of the new conditions. The latter imply the myriad of information necessary to assess the debt level in view of the crisis. This fiscal rule, defined based on this re-assessment, will provide more transparency and flexibility, and, at the same time, improve credibility for foreign investors. This is what we have discussed and stick to: the measures that will yield stable fiscal balances in the long-term period. These measures should naturally provide the Albanian economy the opportunity and required flexibility to develop. Concerning the level, I have proposed a comprehensive re-assessment under the new conditions.

Regarding the second question on the election campaign, it surely affects the economy, particularly if we take into account the prolongation of the global crisis. It is hard to define the extent but what is most important from the Bank of Albania's viewpoint is that the debate should be more constructive and 'down-to-earth', in order to steer agents toward a stable and long-term development of the country. All this takes place in a setting when the Bank of Albania has launched a package of macro prudential rules, which has been widely welcomed by the public and agents. We believe that this package will provide new incentives for the lending process, which is vital to our economy. It is very important to maintain macroeconomic and fiscal balances, which we are able to achieve.