Today, Prime Minister Edi Rama proudly responded to the opposition’s platform proposing the confiscation of assets of companies who had participated in corruptive contracts with the announcement that Albania has decided to borrow €500 million from international markets.
Today, Albania was listed in international capital markets for the purchase of the Eurobond and we will be successful in this operation, precisely because the economy, our government’s finances, are the exact opposite of what our misguided opposition’s mirror of desperation claims.
Albania has entered the international market for some time now, and it refinances its Eurobonds. On September 21 2018, the government approved the emission of a third, 7-year, Eurobond valued at €500 million.
According to the approved law, this debt will serve to finance the government’s projects for the next two years and will buy back a part of the €500 million 5-year Eurobond emitted in 2015 by the government at a coupon rate of 5.75 percent.
The government decision will raise the public debt, which has already reached over 70% of the GDP. However, in these calculations, the government has not factored in the many public-private partnerships, that are, de facto, debt the state owes to private companies in the following years, but are based, de juro, on some creative accounting formulas in order to not appear immediately as public spending, and therefore, as debt.
Albania’s high public debt has raised its interest rate compared to the region’s countries. Thus, for example, this year, Macedonia borrowed €500 million in a 7-year Eurobond at an interest rate of 2.75 percent while Montenegro raised €500 million at a 3.37 percent rate.
This marks the third time that the Albanian government decides to borrow from the international markets. The first Eurobond emission was approved in 2010, and was valued at €300 million.