In a surprising revelation, a draft report has accused the Albanian Central Bank of printing money to finance the purchase and renovation of the historic Hotel Dajti in Tirana. The move, which allegedly began under former governor Ardian Fullani and continued under current governor Gent Sejko, has raised concerns about inflation and financial mismanagement.
Key Takeaways
- The Albanian Central Bank allegedly printed money to buy and renovate Hotel Dajti.
- The practice reportedly started under former governor Ardian Fullani and continued under current governor Gent Sejko.
- The draft report raises concerns about inflation and financial mismanagement.
- The Bank of Albania denies the allegations, stating the findings were preliminary and later adjusted.
Background
In 2010, then-Prime Minister Sali Berisha announced the sale of the iconic Hotel Dajti, a building with a storied past dating back to the 1940s. The buyer was the Albanian Central Bank, which agreed to pay 30 million euros for the building to use as new office space. This move was controversial, as the bank is legally prohibited from financing government expenditure.
Allegations and Findings
A confidential draft report by Albania’s Supreme State Audit, recently obtained by BIRN, claims that the central bank used monetary issuance to fund the purchase and renovation of Hotel Dajti. This action, commonly known as printing money, can fuel inflation and ultimately pass the cost onto consumers.
The draft report also highlighted other financial irregularities, including:
- Spending by the central bank well in excess of its earnings.
- Concerns about an office rental contract with a local company.
- Questionable procurement procedures during the purchase of several cars.
Bank’s Response
The Bank of Albania has denied the allegations, stating that the audit’s findings were preliminary and eventually adjusted. The bank emphasized that money issuance is carried out to fulfill the needs of the country’s economy and not for paying the institution’s expenses.
Financial Mismanagement
The draft audit covers the period when Fullani was governor (2004-2014) and the tenure of current governor Sejko. It claims that the practice of printing money to finance expenditures began under Fullani and continued under Sejko. The report also questioned the procedures followed under Sejko for the purchase of a luxury Range Rover for the bank.
Political and Economic Implications
The allegations have significant political and economic implications. Over the past decade, the bank has been criticized for politically-motivated hiring, which has eaten into its profits. The draft report concluded that when the 30-million-euro purchase of Hotel Dajti was announced, the bank did not have the money to pay for it, leading to the use of monetary issuance.
Conclusion
The final report by the Supreme State Audit has not been published, and BIRN’s request for an official copy was rejected on the grounds of confidentiality. The allegations, if proven true, could have far-reaching consequences for Albania’s financial stability and governance.
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