BANK OF ALBANIA
Governor Sejko attends the 9th ECB conference on CESEE countries
Publication date: 18.07.2023
On 17 July 2023, the Governor of the Bank of Albania, Mr Gent Sejko, attended the 9th ECB conference on central, eastern and south-eastern European (CESEE) countries: “Changing geopolitical landscape – economic implications for central, eastern and south-eastern Europe”, organized by the European Central Bank (ECB), in Frankfurt, Germany.
The conference on the CESEE countries is a forum to discuss key economic and financial issues in the region, with participation of central banks from the EU and EU candidate countries and potential candidates, representatives from European and international institutions (European Commission, IMF, EBRD, EIB, BIS, OECD, World Bank) as well as from academia. It provides a platform for deepening the understanding of CESEE economies and exchanging views on topical policy issues.
Governor Sejko participated in the session’s panel on “A longer-term view – potential structural changes ahead”, chaired by Mr Frank Elderson, Member of the Executive Board, European Central Bank.
The central, eastern and south-eastern European (CESEE) countries have been going through a 30-year period of transformation which drove the transition from planned economies to fully open economies. Nowadays, following the Russia’ aggression to Ukraine the geopolitical landscape may change and trigger negative effects in the economic convergence of across the countries in this region. Though, these countries may benefit from the changes we are facing, as they are well positioned to obtain capital inflows, as a natural option to direct them towards the regional economies, as well as a familiar environment for the EU investments with decades of experience for the EU firms conducting their business in the CESEE countries.
On the other hand, the change in the geopolitical environment means a stronger political commitment from the European Union towards a full integration of the CESEE region. The outcome is a rebound in terms of the enlargement and integration process in the EU for candidate and potential candidate countries.
The Governor, regarding Albania, highlighted that the European integration process is a long-term strategic objective. "This process is a strong promoter for structural reforms, with a view to the full convergence of Albanian institutions with the EU standards, as well as for the overall alignment of policies and regulations. All these actions will deeply improve the business climate, attract foreign investments and increase the overall productivity of our economy." - said the Governor.
The Bank of Albania, as a central bank, has a role to play in this process. First, we should remain committed to our mandate of price stability, even in this challenging environment, as a prerequisite for financial stability and long-term growth. Currently, it means taking all the necessary measures to deal with the persistently high inflation rate. In this framework, driven by our legal and institutional commitment to price stability, the Bank of Albania has tightened its monetary policy stance in line with the general stance of monetary policy across the globe in general and in the EU in particular. However, we remain committed to taking further measures if inflation turns out to be more entrenched and persistent than we currently expect.
Second, we should harmonize our policies, regulations and practices with those of the ECB and the ESCB (the European System of Central Banks). The Bank of Albania has continuously worked to improve the regulations on banking sector with the Basel Principles and the EU Acquis. We are confident that we have achieved a sufficient degree of compliance with these practices, as confirmed by the results of an assessment process carried out together with a well-known financial company – and we have submitted a formal request to the ECB in order to obtain the supervisory equivalence status.
Third, we should accelerate our efforts towards the development of our financial and payment systems, in order to carefully integrate them with those of the EU. For this purpose, the Bank of Albania has revised and improved the payment systems, by approving the relevant part of the EU acquis and intends to implement an instant payment system, which is modelled pursuant to the lines of the one operated by the Eurosystem.
During the conference, Governor Sejko answered to questions from attendees on issues related to capital flows and foreign investments, the impacts of climate change on the economy, the energy-driven shocks on inflation, and immigration. Also, the Governor had the opportunity to discuss with senior representatives from the ECB and governors from CESEE countries’ central banks.