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Albania: country overview

21 August 2012
by Ina Dimireva -- last modified 30 January 2017

Albania was identified as a potential candidate for EU membership during the Thessaloniki European Council summit in June 2003. In 2009, Albania submitted its formal application for EU membership. In its Opinion on Albania's application (in 2010), the Commission assessed that before accession negotiations could be formally opened, Albania still had to achieve a necessary degree of compliance with the membership criteria and in particular to meet the 12 key priorities identified in the Opinion. In October 2012, Commission recommended that Albania be granted EU candidate status, subject to completion of key measures in the areas of judicial and public administration reform and revision of the parliamentary rules of procedures. In June 2014, Albania was awarded candidate status by the EU.


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Albanian flag

Member of Schengen area: No

Political system: Republic

Capital city: Tirana

Total area: 28.748 km²

Population: 3.6 million

Currency: lek

Country overview

Albania - along with other Western Balkans countries - was identified as a potential candidate for EU membership during the Thessaloniki European Council summit in June 2003.

In 2009, Albania submitted its formal application for EU membership. In its Opinion on Albania's application (in 2010), the European Commission assessed that before accession negotiations could be formally opened, Albania still had to achieve a necessary degree of compliance with the membership criteria and in particular to meet the 12 key priorities identified in the Opinion.

In October 2012, Commission recommended that Albania be granted EU candidate status, subject to completion of key measures in the areas of judicial and public administration reform and revision of the parliamentary rules of procedures.

Economy overview

Albania

Albania, a formerly closed, centrally-planned state, is a developing country with a modern open-market economy. Albania managed to weather the first waves of the global financial crisis but, more recently, the negative effects of the crisis have caused a significant economic slowdown. Close trade, remittance, and banking sector ties with Greece and Italy make Albania vulnerable to spillover effects of debt crises and weak growth in the euro zone.

Remittances, a significant catalyst for economic growth, declined from 12-15% of GDP before the 2008 financial crisis to 5.7% of GDP in 2014, mostly from Albanians residing in Greece and Italy. The agricultural sector, which accounts for almost half of employment but only about one-fifth of GDP, is limited primarily to small family operations and subsistence farming, because of a lack of modern equipment, unclear property rights, and the prevalence of small, inefficient plots of land. Complex tax codes and licensing requirements, a weak judicial system, endemic corruption, poor enforcement of contracts and property issues, and antiquated infrastructure contribute to Albania's poor business environment making attracting foreign investment difficult.

Albania's electricity supply is uneven despite upgraded transmission capacities with neighboring countries. Technical and non-technical losses in electricity - including theft and non-payment - continue to undermine the financial viability of the entire system, although the government has taken steps to stem non-technical losses and has begun to upgrade the distribution grid. Also, with help from international donors, the government is taking steps to improve the poor national road and rail network, a long standing barrier to sustained economic growth.

Inward FDI has increased significantly in recent years as the government has embarked on an ambitious program to improve the business climate through fiscal and legislative reforms. The government is focused on the simplification of licensing requirements and tax codes, and it entered into a new arrangement with the IMF for additional financial and technical support. Albania's IMF program may be at risk, however, because the government has not collected sufficient tax revenue needed to reduce the budget deficit. The country continues to face increasing public debt, exceeding its former statutory limit of 60% of GDP in 2013 and reaching 73% in 2015.

Source: Europa, The World Factbook

Useful links

Delegation of the EU to Albania

Republic of Albania Council of Ministers

Tourist information

EU membership

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