IBNA Special Report
Tirana, December 4, 2014/Independent Balkan News Agency
The Albanian government has sent to parliament a legal amendment, which aims at removing to the legislative institution the right of approving borrowing in the international financial market.
Minister of Finance, Shkelqim Cani has demanded from the Economy Parliamentary Committee several amendments in the law on state borrowing, state debt and state guarantees on loans.
Cani explained that the amendments aim at moving borrowing powers to the Ministry of Finance without the need to vote every agreement in parliament first.
The minister said that the necessity of voting these amendments comes as a need to improve the legal framework in the domain of state borrowing, state debt and state guarantees on loans, for the harmonization of this activity with the best practices of international money market.
The amendment in the law endows the Minister of Finance with the power to negotiate and approve the loan agreement without sending the agreement to parliament first. This amendment aims at facilitating borrowing when interest rates are low.
Mr. Cani says that this path aims at securing a more flexible borrowing in the international market at a cheap cost. He said that interest rates in financial markets are fluctuating and the time that it takes to parliament to vote has an impact on benefiting low interest rates.
Experts say that the Constitution must be changed in order to pass this bill. Chapter two of the Constitution, which talks about international agreements, says that in cases of financial obligations by the Republic of Albania, they are voted in parliament or ratified with the majority of the members of parliament.
Uncertain if the bill was against the Constitution, the economy committee passed the draft of the ministry to the law committee, in order to be discussed in the following days.
Expert Shehu: Government is violating the Constitution
Amendments in the bill on public debt, where the Minister of Finance is given powers to borrow in international markets with parliament’s approval, is a serious violation of the Constitution according to expert Sherefedin Shehu.
“This is an anti-constitutional action and a condemnable one, because the Albanian Constitution, as it is today, requires the ratification in parliament of not only loans, but also aids coming from abroad”, says the finance expert.
The democrat MP says that the legal incentive of the government is unacceptable and in violation with the principle articulated by it when it was in opposition. At that time, Cani accused the then Minister of Finance, Ridvan Bode about the loan for the highway linking Durres to Kukes, considering it as abusive. Mr. Shehu recalls that that loan was ratified by parliament.
“That minister is scared. He has made changes to be untouchable in every circumstance, because this is now a known situation, where he accuses his former colleagues, although they have borrowed loans which were ratified by parliament. He has accused them of failing to comply with procedures that he thought that they should have been complied with. Being scared, he anticipates or offers protection for himself”, says former deputy minister of Finance, Sherefedin Shehu.
The government’s incentive comes a few weeks after Mr. Cani announced the issuing of the second Albanian Eurobond in the international market. The Eurobond may vary from 300 million to 500 million Euros. The minister said that the government is aiming to find an optimal solution which takes into account both risks and benefits and thus, the best alternative for the economy.
Albania entered in the Eurobond market in October 2010, when it managed to sell a bond amounting to 300 million Euros, with an interest rate of 7,5%. /ibna/