THIS WEEK IN ALBANIA, DECEMBER 21-28, 2007

UNCLAS SECTION 01 OF 02 TIRANA 001084

SIPDIS

SIPDIS

DEPT FOR EUR/SCE

E.O. 12958: N/A
TAGS: ECON PGOV PREL AL
SUBJECT: THIS WEEK IN ALBANIA, DECEMBER 21-28, 2007


1. (U) The following is a weekly report prepared by Embassy
Tirana's local staff to provide political and economic context and
insight into developments in Albania. These updates will supplement
post's DAR reports and reporting cables.

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POLITICAL AND ECONOMIC DEVELOPMENTS
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2. (U) FM Basha Says "I Am A Sacrificial Lamb": Following a long
debate, the Albanian Parliament voted overwhelmingly in favor
yesterday of removing parliamentary immunity from MP and Foreign
Minister Lulzim Basha. Majority and opposition forces voted
together in favor of allowing an investigation to go forward on
Basha's handling of a major infrastructure project, the Durres-Kukes
road, during his term as Minister of Transport. The road will link
Kosovo directly to the Albanian beach resorts (and its main port),
cutting Kosovar tourists' driving time in half with a very
significant upgrade to the touristic experience. (Approximately 80%
of foreign tourists to Albania are Kosovar.)


3. (U) While the opposition hopes that Basha will subsequently be
sacked on corruption charges, the majority is ready to allow
Parliamentary review of the complete Durres-Kukes road file and
possible prosecution of Basha by the recently-appointed Prosecutor
General (PG). The case could serve as the first major test for the
new PG.


4. (U) FM Basha addressed his MP colleagues preemptively December
27 on the importance of the Durres-Kukes road to the national
interest, depicting himself as the sacrificial lamb for this first
major national infrastructure project. He concluded by saying:
"All those that believe in good and the truth should support this
(road project) as I do, without any reservations."

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Self-sacrifice enables us to sacrifice other people without
blushing. -- George Bernard Shaw

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5. (U) Unexpected Consequences: While fans in the U.S. have been
saddened recently by baseball doping scandals, Albanian soccer fans
have other problems on their minds. With Kosovo status
determination expected to be close on the horizon, Albanian football
fans are concerned for "the day after." Players hailing from Kosovo
comprise about half of Albania's National Team, and Kosovo's
possible proclamation of independence has some fans worrying about
their team's future. Official circles have so far avoided the issue
- current players are all citizens of the Republic of Albania - but
privately some note that a new state could affect the makeup of the
team.


6. (U) Albania's National Football Team generates strong loyalty
from ethnic Albanians across the region. Dressed in national red and
black, waving the Albanian double-eagle flag, thousands descend from
neighboring countries to support the team, which represents the
closest that Albanians expect to come to "Greater Albania." Asked
about a possible division of the national team, Kosovar Albanian
player Lorik Cana, one of its best, answered "it would be a great
loss, but when the time comes we will decide all this together."


7. (U) Privatization of Oil Refining: This week, the Ministry of
Economy approved a report by consulting firm Patton Boggs for the
process of privatization of ARMO, a government-owned oil refining
company. The government plans to sell 76% of ARMO's shares in an
open tender, with the remainder distributed as compensation to
former owners of the land where the company sits and to ARMO
employees. ARMO holds 25% of the domestic market, and despite a
failed privatization attempt in 2005, has increased revenues since
that time due to the global surge in oil prices. The government
expects to collect at least USD $100 million from the transaction,
and to complete the privatization within the first half of 2008.


8. (U) Despite recent setbacks, the government is committed to
concluding remaining large-scale privatization projects. Albania's
private sector already accounts for 80% of GDP, and employs more
than 80% of all workers. Many sectors are entirely privatized, such
as banking and telecommunications, while others, including energy,
are expected to be completely transformed next year through
privatization. However, there is consensus on the urgent need for
an improved regulatory framework to increase efficiency and hold
back anti-competitive behaviours.

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THIS WEEK IN ARTS AND CULTURE
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9. (U) Christmas In Tirana: Although Christmas celebrations may not
be as pervasive in Albania as throughout much of Europe, a very

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large and well-decorated tree, erected a few days before Christmas,
holds court in Tirana's Skenderbeg Square. The tree represents not
only the Christian tradition, but also the communist-era "New Year's
Tree" which marks the celebration of Albania's most important family
holiday. Today, the tree is viewed as a decorative nod to both or
either, depending on perspective. Next Week: A Traditional
Albanian New Year's Celebration.
CRISTINA