Identifier
Created
Classification
Origin
09TIRANA185
2009-03-25 13:40:00
CONFIDENTIAL
Embassy Tirana
Cable title:
ALBANIA: BROTHER, CAN YOU SPARE A DIME?
how-toVZCZCXRO9445 PP RUEHDBU RUEHFL RUEHKW RUEHLA RUEHNP RUEHROV RUEHSR DE RUEHTI #0185 0841340 ZNY CCCCC ZZH P 251340Z MAR 09 FM AMEMBASSY TIRANA TO RUEHC/SECSTATE WASHDC PRIORITY 7987 INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE PRIORITY RUEAIIA/CIA WASHDC PRIORITY RUEATRS/DEPT OF TREASURY WASHDC PRIORITY RUEHVEN/USMISSION USOSCE PRIORITY 2470 RUCNDT/USMISSION USUN NEW YORK PRIORITY 0799 RHEHAAA/NATIONAL SECURITY COUNCIL WASHINGTON DC PRIORITY RUEKJCS/SECDEF WASHINGTON DC PRIORITY RHEFDIA/DIA WASHINGTON DC PRIORITY
C O N F I D E N T I A L TIRANA 000185
SIPDIS
DEPT FOR EUR/SCE JISMAIL, TREASURY FOR VIMAL ATUKORALA
E.O. 12958: DECL: 03/25/2019
TAGS: EFIN ECON PGOV AL
SUBJECT: ALBANIA: BROTHER, CAN YOU SPARE A DIME?
REF: TIRANA 153
Classified By: DCM S.A. Cristina, reasons 1.4 (b),(d)
C O N F I D E N T I A L TIRANA 000185
SIPDIS
DEPT FOR EUR/SCE JISMAIL, TREASURY FOR VIMAL ATUKORALA
E.O. 12958: DECL: 03/25/2019
TAGS: EFIN ECON PGOV AL
SUBJECT: ALBANIA: BROTHER, CAN YOU SPARE A DIME?
REF: TIRANA 153
Classified By: DCM S.A. Cristina, reasons 1.4 (b),(d)
1. (C) As predicted reftel, the global financial crisis is
having a growing effect on Albania. The GOA, unable to
finance its 2009 budget deficit by selling domestic bonds or
organizing a Eurobond issue, was forced in January to seek
250 million euro through commercial financing. (Note: Since
the beginning of November 2008, bank deposits have fallen by
over USD 800 million, or about 13 percent of total deposits,
making it impossible for banks to buy domestic bonds.) Two
banks, Deutsche Bank and Alpha Bank, won a tender to
syndicate a loan, but so far, have not had much success.
Contacts within the Ministry of Finance say that due to
global liquidity problems, they may not be able to raise the
entire 250 million euro required and that interest rates
could be as high as 12 percent.
2. (C) Exacerbating the problem, privatization receipts are
behind plan. The 102 million euro that Czech power company
CEZ bid for the Distribution System Operator of the
state-owned electric utility should have been in the bank by
now, but CEZ was able to renegotiate and now has until early
June to deposit the money.
3. (C) Comment: While no one is panicking just yet that
Albania might default on its obligations, things look less
rosy than they did at the beginning of the year. If current
plans fail, the only real alternative may be an IMF bailout.
However, given the Prime Minister's insistence that the IMF
leave at the end of January when its program completed, it's
unlikely his ego would allow him to reverse course before the
elections.
WITHERS
SIPDIS
DEPT FOR EUR/SCE JISMAIL, TREASURY FOR VIMAL ATUKORALA
E.O. 12958: DECL: 03/25/2019
TAGS: EFIN ECON PGOV AL
SUBJECT: ALBANIA: BROTHER, CAN YOU SPARE A DIME?
REF: TIRANA 153
Classified By: DCM S.A. Cristina, reasons 1.4 (b),(d)
1. (C) As predicted reftel, the global financial crisis is
having a growing effect on Albania. The GOA, unable to
finance its 2009 budget deficit by selling domestic bonds or
organizing a Eurobond issue, was forced in January to seek
250 million euro through commercial financing. (Note: Since
the beginning of November 2008, bank deposits have fallen by
over USD 800 million, or about 13 percent of total deposits,
making it impossible for banks to buy domestic bonds.) Two
banks, Deutsche Bank and Alpha Bank, won a tender to
syndicate a loan, but so far, have not had much success.
Contacts within the Ministry of Finance say that due to
global liquidity problems, they may not be able to raise the
entire 250 million euro required and that interest rates
could be as high as 12 percent.
2. (C) Exacerbating the problem, privatization receipts are
behind plan. The 102 million euro that Czech power company
CEZ bid for the Distribution System Operator of the
state-owned electric utility should have been in the bank by
now, but CEZ was able to renegotiate and now has until early
June to deposit the money.
3. (C) Comment: While no one is panicking just yet that
Albania might default on its obligations, things look less
rosy than they did at the beginning of the year. If current
plans fail, the only real alternative may be an IMF bailout.
However, given the Prime Minister's insistence that the IMF
leave at the end of January when its program completed, it's
unlikely his ego would allow him to reverse course before the
elections.
WITHERS