Associations of Exporters: The Bank of Albania has left us in the dark, the fall of the euro is burning us

2023-07-31 17:48:00, Ekonomi CNA

Associations of Exporters: The Bank of Albania has left us in the dark, the fall

Associations of exporters in all sectors have issued a statement to the media regarding the situation created as a result of the fall of the euro.

The associations declare that the strengthening of the lek "is bringing consequences to the entire economy, it has shrunk the pockets of those who have income from remittances and loans in euros, while it has burned exporters".

The statement states that the exporters have suggested solutions to support exporting businesses, but the Bank of Albania ignored their requests and increased the euro again.

The Exporters' Associations repeat the request for attention and the creation of a working group, which focuses on real solutions, with the aim of maintaining balance in the financial market, the labor market and that of Albania with local products, which will shrink to be exhibited with dignity in the international market.

Full statement:

In the middle of last week, we addressed at the press conference our position regarding the overvaluation of the lek that:

~ It is bringing consequences to the entire economy, it has shrunk the pockets of those who have income from remittances and loans in euros, while it has scorched exporters;

~ That this is also due to the experts of the decision-making cabinets, who fail to implement theoretical knowledge in the concrete realities of the country and that they do not have the appropriate political responsibility;

~ We suggested solutions for support to exporting businesses, suggestions which were actually carried out in the conditions of continued darkness by the Bank of Albania, regarding the causes of the overvaluation of the lek (in the last months immediately).

After that, there was an upward trend of the euro, which stopped as quickly as it tried to start, while publicly related to this issue there were two developments:

- The pronouncement of the Lord Prime Minister that: the appreciation of the lek is a success story, although it has brought stress to exporters; there are well-known economic advisers (Merkel's adviser); "Albania is no longer the favorite for the free labor force as it was years ago, so businesses must run to close the cycle (so fashion has no future)".

- The pronouncement of the Bank of Albania that: it cannot fix the exchange rate as suggested by the exporters; The Bank of Albania cannot have an auxiliary instrument for specific categories of businesses, while it expresses its willingness to discuss with any interest group.

Our attitude was very playful, expressing concern and suggesting solutions.

As seen from the positions of the Bank of Albania, the reactions are only related to the opposition to the solution suggested by us (!), while it turns out that they do not deal at all with the problem that we presented: the negative impact on the economy of the lek appreciation and the sure bankruptcy of the companies. exporter and what is essential: the Bank of Albania does not make transparency regarding its activity, for the fulfillment of legal obligations as it relates to the exchange rate!

Under these conditions, we reiterate the basic, minimalist request that the Bank of Albania not publish only the declarative positions that: 'BSH pays attention to the performance of the exchange rate' and 'BSH remains committed to creating a monetary and financial environment as safe as possible, stable and transparent', but to make transparent for the fulfillment of BSH's legal obligations, as far as it is related to the exchange rate (specified in specific articles of the law on the Bank of Albania), such as:

¾ The periodic report of the BoH to the Assembly for details, for the evaluation of the foreign exchange policy implemented by the BoH and those that will be followed in the next 6 months;

¾ What are the measures taken by BSh to encourage and support the foreign exchange system in order to improve and stabilize economic developments in the country?!

¾ Data/information on the design, approval and implementation of the foreign exchange regime, as well as the foreign exchange rate policy in the country;

¾ Assessments of the supervisory council for foreign exchange policy - in the function of which (this assessment), the Governor informs the council no less than once every 6 months, about the state of foreign exchange and the circumstances that may influence the achievement of policies for foreign exchange;

¾ For the assessment of the announcement or not of the value of the lek, in relation to foreign currencies and any other change thereof, etc.

In fact, from the publications on the BSH website, we have found surprising developments in the currency market, such as the increase in the number of Foreign Exchange Offices, even during the pandemic period (although no one went out).

We demand exactly this transparency from the Bank of Albania, together with the explanations that the appreciation of the lek is a logical consequence of the country's economic development, in order to analyze and conclude on the solutions that we want apply, or that we will suggest and ask to be implemented by public institutions.

No economic expert that we have contacted has an economic and macroeconomic explanation for the appreciation of the lek within such a short period to the extent of 14%, so we welcome the transparency of the Bank of Albania, so that we understand this phenomenon in the right direction.

Although the Prime Minister's statement is not in our favor, we are undoubtedly grateful that he conveyed without any equivocation that 'there is a stress of exporters' - the word chosen to label our situation, is enough to show that there is a serious problem, since no one can expect that in a public statement, the prime minister will openly expose the expected bankruptcy of a multitude of exporting enterprises.

We completely agree with the statement of the Prime Minister, that our country is no longer attractive for the low cost of labor, as well as with the need to run more and faster towards the closed cycle, although the decision-making of the last two or three years for fiscally eased at the level of 5% automatic investments, which are purely formal since, apart from the labor force, they do not even buy a single bolt in the domestic market, are contradictory to the above statement.

However, it must be said that for a long time the vast majority of so-called fashion companies have actually taken steps towards a closed cycle - they buy raw materials, produce to order and export, like any other company - while there are reasons to question why not manage to win public procurements for clothing, etc., which are actually won by fashion enterprises in other countries.

Despite this, we emphasize that even for the so-called fason companies, the expected bankruptcy is due to the immediate overvaluation of the lek by 14% in the last two months, i.e. due to an uncertain economic and financial environment, for which we emphasize again, that the Bank of Albania has not made any transparency.

On the other hand, the increase in the price of the lek is not only hitting fashionistas, but it has hit and is bankrupting every company that produces and exports. In the future, without a doubt, those who produce and sell in the country will also have the consequences, since the import does not show a proportional increase with the created situation and the increase in prices, on the other hand, has reduced the purchasing power. So the "made in Albania" brand and commitment to the government is hit, the number of unemployed increases, market uncertainty increases and a non-transparent atmosphere is created in society in general.

For them, it is related to the advisers, of whom the Prime Minister identified Merkel's adviser, we have no doubts about the Prime Minister's efforts, while we express respect for the economic adviser and others.

But we say with conviction, that the problem has been modeled incorrectly to the foreign advisers, so the possible recommendations cannot have the premise of being correct!

There are also previous cases in the drafting and implementation of fiscal policies, for which the positions of well-known government advisers have changed their positions when the picture related to the issues has become complete and clear.

In this context, we repeat our request for attention and the creation of a working group, which focuses on real solutions, with the aim of maintaining balance in the financial market, that of labor and that of Albania with local products, which will shrink to be exposed to dignity in the international market.

The group of export associations is ready to call the most vocal experts of the economy over the years and is open to discuss this issue with government representatives, either advisers to the Prime Minister's cabinet, or from other responsible institutions and guardians of economic policies./ CNA.al