Minister of Finance and Economy, Delina Ibrahimaj, presented to the Parliamentary Committee on Economy and Finance the draft law on its issuance in international markets, adding that the financing raised from Eurobond issuance will be used to kickstart health sector, agriculture, education, and public investment.

“The funding raised will be used for general budget support, which will be allocated to general public expenditures to ensure that key sectors, such as education, health, agriculture and infrastructure continue to grow steadily, and will support public investment, hovering around 5% of GDP. A part of the Eurobond will remain in balance on unified budget account for the financing of 2022 needs,” declared the minister.

The Minister said that the opinion of the Bank of Albania was requested for the issuance of this Eurobond.

“The Bank of Albania has confirmed that the issuance of Eurobond in the announced terms and values does not affect its monetary policy in the short term,” said the Minister.

Ibrahimaj said that this is the fifth time that our country turns to the international capital markets to issue the Eurobond instrument.

The first Eurobond was issued in 2010, with 5-year maturity, a value of 300 million euro and a coupon rate of 7.5% was repaid in 2015.

Subsequent Eurobonds that are still outstanding are those issued in 2018, at a value of 500 million euro, with a 7-year maturity and coupon rate of 3.50%, and Eurobonds issued in 2020, at the value of 650 million euro, with a 7-year maturity and a coupon rate of 3.50%.

“The issue of the latest Eurobond was made possible at almost the same cost as the previous Eurobond despite the volatility of international financial markets at the height of COVID-19 pandemic in the first half of 2020,” she said.

Tabaku: Debt, burden on Albanians and a stimulus for oligarchs

During the meeting of the Parliamentary Committee on Economy and Finance, the Deputy Chairman of the Democratic Party, Jorida Tabaku raised questions about the public debt of Albania. She said that the Albanian economy did not perform better although public debt increased, on the contrary the debt was used to finance the salaries of employees.

“The government found the debt in 2013 in the amount of 6.3 billion euro, while in the first half of 2021 the debt has reached the value of 10.2 billion euro. What has the Albanian economy benefited from increased debt? “Obviously nothing,” said Tabaku.

She added that the situation in world markets and above all the situation in the global economy will have a downside impact on the Eurobond issuance.

Tabaku went on saying that the Eurobond’s coupon rate will be affected by the situation of Albania in the eyes of the international community.

“Like never before the debt is used to pay the salaries, pensions and concessions. Debt has reached 95% of GDP. We should bear in mind that Albania is one of the countries put on the grey list of Moneyval. This will affect the coupon rate of Eurobond,” she said.

Tabaku underlined that the debt situation and management has also been addressed by the IMF which has criticized the government for both aspects of its management and also its use.
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