Identifier
Created
Classification
Origin
08TIRANA287
2008-04-11 16:22:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Tirana
Cable title:  

THIS WEEK IN ALBANIA, APRIL 5-11, 2008

Tags:  PGOV PREL ECON AL 
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R 111622Z APR 08
FM AMEMBASSY TIRANA
TO RUEHC/SECSTATE WASHDC 6967
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE
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UNCLAS SECTION 01 OF 02 TIRANA 000287 

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TAGS: PGOV PREL ECON AL

SUBJECT: THIS WEEK IN ALBANIA, APRIL 5-11, 2008


UNCLAS SECTION 01 OF 02 TIRANA 000287

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DEPT FOR EUR/SCE
DEPT OF JUSTICE FOR OPDAT, ICITAP

E.O. 12958: N/A
TAGS: PGOV PREL ECON AL

SUBJECT: THIS WEEK IN ALBANIA, APRIL 5-11, 2008



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.

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POLITICAL DEVELOPMENTS
--------------


2. (SBU) TIME FOR A CHANGE: The Albanian Parliamentary Commission
on Laws discussed this week proposed changes to the Constitution
that, if approved, would fundamentally change the country's
political system. These would be the first major changes since its
1998 inception. Long-awaited electoral reform is on the table,
including the move to a regional-proportional system from the
current majority-based system. This action continues to be strongly
opposed by the smaller political parties, the majority of which have
no hope of reaching the new threshold of support such a system would
introduce for parliamentary representation. These small parties
have survived to date through the political patronage of the two
major parties as they have no independent base of support. The two
larger parties have reportedly agreed to reduce the number of
political parties, currently 12, to around four to six, claiming it
would increase political stability and improve the professionalism
and capability of the Albanian Parliament. Proposed reforms also
aim to introduce a non-political electoral administration agency
since the work of the current Central Elections Committee has often
been bogged down by political disagreements.


3. (U) In addition to amendments on electoral reform, however,
which have been coordinated with the largest opposition Socialist
Party (SP),the ruling Democratic Party (DP) has put forward other
proposals that would streamline the parliamentary election of the
president, including rules that would make it more likely that a
president would be chosen without dissolution of Parliament or early
elections. (The Parliament only narrowly avoided early elections
last July, successfully appointing Topi in the fifth round of
voting.) Another amendment would change the provisions regulating
the parliamentary vote of confidence, requiring early elections if
the Prime Minister fails the motion. In this way MPs would have to

think twice before deciding to bring a government down, as doing so
would increase the risk they could lose their own seats. A third
proposal, under which Presidential decrees would only take effect
with a counter signature from the Prime Minister, has already met
significant opposition as it would further curb the President's
already limited powers. All of these proposals will be debated
further, but it seems clear that significant constitutional changes
are in the offing.


4. (U) KEEPING GERDEC IN THE PUBLIC EYE: Rumors continued to swirl
through Tirana regarding alleged government involvement in the
explosion at Gerdec ammunition depot on March 15, which killed 24
and wounded 300. Albania's second largest television station,
pro-government TV Klan, aired an episode called "They Knew,"
presenting what it claims are classified official documents which,
if authentic, would contradict PM Berisha's previous statement to
Parliament that he had "no knowledge of Gerdec." Several newspapers
picked up the story later in the week, keeping the issue alive and
in the public forum. A game of subtle finger pointing ensued as the
Ministry of Defense issued a press release refuting the PM's
knowledge of evidence presented in the media, while not exonerating
the office of the President. The opposition also continues to keep
the Gerdec tragedy in the public eye, with leader Edi Rama calling
for a "clarification" this week from the PM on these allegations.
The media and the opposition have kept the issue alive as the
official government investigation remains ongoing.

--------------
ECONOMIC DEVELOPMENTS
--------------


5. (U) INFLATION RISING: Albania's inflation rate hit 4.6 percent
year in March, up from 3.6 percent in February and just 2.7 percent
one year ago in March 2007, according to the state statistics
office, INSTAT. This leap, the highest in the last six years, is
largely due to surging food and fuel prices. Another major factor
is the rise in electricity price, which took effect March 1. This
is the second time in six months that the inflation rate exceeded
the Central Bank's limit of 4 percent; however, the IMF predicts an
average inflation rate of 4.2 percent in 2008 for Albania.


6. (U) Albania has not been immune to the effects of the recent
global economic downturn, beginning in particular last summer, with
a spike in food prices that caught the attention of policymakers and
civil society in addition to average citizens. Since then, the free
float exchange rate and the recent valuation of the domestic
currency against the dollar has partially absorbed rising prices.

TIRANA 00000287 002 OF 002


The government has downplayed current inflation rates claiming the
effects are a boomerang of international economic problems rather
than a result of this government's fiscal policy. There are,
however, possible domestic causes for higher prices, including the
rapid increase in the number of consumer and business loans and the
expansion of publicly funded projects. The Central Bank is engaged
in an inflation targeting regime, raising the interest rate twice
last year, a fiscal instrument expected to be used again. As
pressure increases on the domestic economy, the government should
react more promptly to assist the most vulnerable strata of the
population, whose most immediate problem is the price of putting
food on the table.

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THIS WEEK IN ARTS AND CULTURE
--------------


7. (U) ICON EXHIBIT IN TIRANA: The National Gallery of Art opened
an exhibition this week on the restoration of icons from the Museum
of Art in Korca. The Gallery features photos of some of the 80
icons recently restored at the Museum of Byzantine Culture in
Thessaloniki, Greece, a project funded by the European Center for
Byzantine and Post-Byzantine Cultural Monuments, along with an
exhibit explaining the restoration process. This supplements the
Gallery's substantial permanent collection of icons by painters such
as Onufer Qiprioti, Joan Cetiri, and Konstandin Jermonaku to name a
few. Albania's icons are among the finest of the Byzantine era,
including not only the collections in Tirana and Korca, but also the
Onufri Museum in the ancient city of Berat.

--------------
QUOTE OF THE WEEK
--------------


8. (U) "Without [NATO membership], Macedonia will remain an
unintegrated island -- and that does not benefit anyone. But I am
optimistic that a solution will be found." PM Berisha, in an April
10 interview with BBC's Hard Talk.

WITHERS