Albania and EU integration

Topics: European Union, Macroeconomics, Inflation Pages: 15 (4179 words) Published: April 15, 2014

Objective of the study

1. To provide a basic idea for Albanian economy and its European integration possibilities. 2. To provide knowledge about advantages and disadvantages that Albania faces in different sectors of economy. 3. To provide knowledge about Albanian ability to take the obligation of membership. 4. To provide knowledge about systematic and unsystematic risk for Albanian European integration.

Methodology
1. Research problem
Is Albania in line with EU expectations? Which are the abilities of Albania to maintain the obligation of membership? Basic objective is to examine, firstly economic development of Albania based on the collected data from 2002 – 2012, than to verify if they are in line with EU criteria.

2. Expectations
Since Albania is determined in its decision to join European Union and to be part of Economic integration, it has made a progress in reforming institutions, in legislation, and the most important the assignment of SSA (Stabilization and association process). But the progress is very slow and insufficient. The cause of this polarization remains on political culture of the country which historically has not faced any experience of democracy. So expectations are not very positive. On a long term basis only new socialized and democratic generation can truly execute fundamental reforms needed to be part of European Economic Integration.

Data Collections
1. Primary data: World Bank reports and Instat.
2. Secondary data: Journal websites and financial news papers.

European Union Integration – The impact in Albanian Economy The aim of this project is to demonstrate how much the economic development in Albania is in line with European Union? In the first section will be analyzed, Relations between Albania and EU. Over all now Albania is part of Stabilization and Association process, in regular political and economical dialogue with EU. Last decade we can say that our country have faced some changes on our politic system and economic one, through three main factors, visa liberalization, financial assistance and civil society. How we realize these challenges? Did these three factors affect positively our economy; since we are one of the main countries that were not affected by world crises and how? In the second section will analyze economic criteria by examining development of economy in Albania. The examination includes different areas of economy? The existence of a good function of market economy: This includes the main essentials’ of economic policy where the primary objective is the protection of a market oriented economy. Here we can mention that Albania has a visible progress starting from year 2007 when we signed CEFTA agreement. Macroeconomic Stability: Over all Albania has preserved the macroeconomic stability, because it was less affected by external economic conditions. Monetary policy of Albania has help to keep stable inflation and control inflationary expectations. Public debt is over limited and essential reforms are still missing. Interactions of market forces: According to the official data, results that state involvement in economy remains limited but it is focused on energy, transport and water supply. Market Entry and Exit: Here we can conclude that Albania is one of the countries that have facilitated business entry to the market but procedures for market exit are still ineffective. Legal System: Albanian faces many weaknesses in rule of law, according to real data, corruption is in considerable levels and reforms of property rights are still incomplete. This has adverse affect on the market environment. Financial sectors and Development: Some progress is made but it is needed the consolidation of public finances and the reduction of public debt. Human and Fiscal Capital: The structure of macro economy remains unchanged; also informality remains again a challenge. Albanian economy is tangible by industry specific shocks....

References: European report for Albania 2012-2013
http://ec.europa.eu/enlargement/pdf/key_documents/2013/package/al_rapport_2013.pdf
Bank of Albania Annual Report 2012, Production date: 21.06.2013, Author: Bank of Albania
http://www.bankofalbania.org/web/Annual_Report_2012_6609_2.php
Instat, Conjuncture, Main Economic Indicators, Q3-2013
http://www.instat.gov.al/al/publications/librat/2013/konjuktura,-tregues-kryesor%C3%AB-ekonomik%C3%AB,-t3-2013-(1).aspx
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