COMMISSION STAFF WORKING PAPER ALBANIA 2011 PROGRESS REPORT
Date: 2011-10-12
Institutions: European Commission
Subjects: Albania, accession criteria, pre-accession aid

EUROPEAN COMMISSION 

Brussels, 12.10.2011 
SEC(2011) 1205 final 

COMMISSION STAFF WORKING PAPER 

ALBANIA 2011 PROGRESS REPORT 

Accompanying the document 

COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN 
PARLIAMENT AND THE COUNCIL 

Enlargement Strategy and Main Challenges 2011-2012 

{COM(2011) 666 final} 
{SEC(2011) 1200 final} 
{SEC(2011) 1201 final} 
{SEC(2011) 1202 final} 
{SEC(2011) 1203 final} 
{SEC(2011) 1204 final} 
{SEC(2011) 1206 final} 
{SEC(2011) 1207 final} 

 
 
 
 
  
 
TABLE OF CONTENTS 

1. 

1.1. 

1.2. 

1.3. 

2. 

2.1. 

2.2. 

2.3. 

3. 

3.1. 

3.2. 

4. 

4.1. 

4.2. 

4.3. 

4.4. 

4.5. 

4.6. 

4.7. 

4.8. 

4.9. 

Introduction .................................................................................................................. 3 

Preface.......................................................................................................................... 3 

Context ......................................................................................................................... 3 

Relations between the EU and Albania........................................................................ 4 

Political criteria ............................................................................................................ 5 

Democracy and the rule of law .................................................................................... 5 

Human rights and the protection of minorities .......................................................... 14 

Regional issues and international obligations ............................................................ 21 

Economic criteria ....................................................................................................... 22 

The existence of a functioning market economy ....................................................... 22 

The capacity to cope with competitive pressure and market forces within the Union
.................................................................................................................................... 27 

Ability to assume the obligations of membership...................................................... 29 

Chapter 1: Free movement of goods .......................................................................... 29 

Chapter 2: Freedom of movement for workers .......................................................... 30 

Chapter 3: Right of establishment and freedom to provide services ......................... 31 

Chapter 4: Free movement of capital ......................................................................... 32 

Chapter 5: Public procurement................................................................................... 33 

Chapter 6: Company law............................................................................................ 33 

Chapter 7: Intellectual property law........................................................................... 34 

Chapter 8: Competition policy ................................................................................... 35 

Chapter 9: Financial Services..................................................................................... 36 

4.10.  Chapter 10: Information society and media ............................................................... 37 

4.11.  Chapter 11: Agriculture and rural development......................................................... 38 

4.12.  Chapter 12: Food safety, veterinary and phytosanitary policy .................................. 39 

4.13.  Chapter 13: Fisheries.................................................................................................. 40 

4.14.  Chapter 14: Transport policy ..................................................................................... 42 

4.15.  Chapter 15: Energy .................................................................................................... 43 

4.16.  Chapter 16: Taxation.................................................................................................. 44 

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4.17.  Chapter 17: Economic and Monetary policy ............................................................. 45 

4.18.  Chapter 18: Statistics.................................................................................................. 45 

4.19.  Chapter 19: Social policy and employment ............................................................... 46 

4.20.  Chapter 20: Enterprise and industrial policy.............................................................. 48 

4.21.  Chapter 21: Trans European Networks ...................................................................... 49 

4.22.  Chapter 22: Regional policy and coordination of structural instruments .................. 50 

4.23.  Chapter 23: Judiciary and fundamental rights ........................................................... 51 

4.24.  Chapter 24: Justice, freedom and security ................................................................. 55 

4.25.  Chapter 25: Science and research .............................................................................. 59 

4.26.  Chapter 26: Education and culture............................................................................. 60 

4.27.  Chapter 27: Environment ........................................................................................... 60 

4.28.  Chapter 28: Consumer and health protection............................................................. 62 

4.29.  Chapter 29: Customs Union ....................................................................................... 64 

4.30.  Chapter 30: External relations.................................................................................... 65 

4.31.  Chapter 31: Foreign, Security and Defence Policy.................................................... 65 

4.32.  Chapter 32: Financial control..................................................................................... 66 

4.33.  Chapter 33: Financial and budgetary provisions........................................................ 67 

Statistical Annex ...................................................................................................................... 68 

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1. 

INTRODUCTION 

1.1. 

Preface 

Since March 2002, the Commission has reported regularly to the Council and Parliament on 
progress made by the countries of the Western Balkans region. This is the first report on the 
country's  progress  following  the  publication  of  the  Commission  Opinion  on  Albania's 
application for membership of the European Union, issued in November 2010. 

This report on progress made by Albania on preparing for EU membership: 

–  briefly describes relations between Albania and the Union; 

–  analyses the situation in Albania in terms of the political criteria for membership; 

–  analyses the situation in Albania on the basis of the economic criteria for membership; 

–  reviews  developments  as  regards  Albania's  capacity  to  assume  the  obligations  of 
membership, that is the acquis expressed in the Treaties, the secondary legislation and the 
policies of the Union. 

This report covers the period from October 2010 to September 2011. Progress is measured on 
the  basis  of  decisions  taken,  legislation  adopted  and  measures  implemented.  As  a  rule, 
legislation or measures which are being prepared or awaiting parliamentary approval have not 
been taken into account. This approach ensures equal treatment across all reports and enables 
an objective assessment. 

The report is based on information gathered and analysed by the Commission. Many sources 
have  been  used,  including  contributions  from  the  government  of  Albania,  the  EU  Member 
States,  European  Parliament  reports1  and  information  from  various  international  and  non-
governmental organisations. 

The  Commission  has  drawn  detailed  conclusions  regarding  Albania  in  its  separate 
communication on enlargement2, based on the technical analysis contained in this report. 

1.2. 

Context 

The Stabilisation and Association Agreement between the EU and Albania was signed in June 
2006 and entered into force in April 2009.  

Albania presented  its application for membership of the  European Union on 28 April 2009. 
Following  a  request  by  the  Council,  the  Commission  submitted  its  Opinion  on  Albania's 
application  in  November  2010.  In  December  2010,  the  Council  endorsed  the  Commission 
Opinion's  recommendations.  In  its  conclusions,  the  Council  noted  that  the  opening  of 
accession  negotiations  will  be  considered  by  the  European  Council,  in  line  with  established 
practice,  once  the  Commission  has  assessed  that  the  country  has  achieved  the  necessary 
degree  of  compliance  with  the  membership  criteria  and,  in  particular,  has  met  the  key 

1 
2 

The rapporteur for Albania is Mr. Nikolaos Chountis.  
Enlargement Strategy and Main Challenges 2011-2012 - COM(2011) 666.  

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priorities3 set out in the Commission's Opinion. The Council invited the Commission to focus 
its 2011 progress report on implementation of these key priorities in particular.  

1.3. 

Relations between the EU and Albania 

Albania is participating in the Stabilisation and Association Process.  

Overall, Albania has continued to smoothly implement its obligations under the Stabilisation 
and  Association  Agreement  (SAA).  It  participated  in  the  regular  political  and  economic 
dialogue between the EU and the country through the SAA structures and contributed to the 
sound  functioning  of  the  various  joint  institutions.  Meetings  of  the  Stabilisation  and 
Association  Committee  and  Council  took  place  in  April  and  July  2011  respectively.  All 
subcommittee  meetings  were  held  in  the  reporting  period.  Furthermore,  the  multilateral 
economic  dialogue  between  the  Commission,  EU  Member  States  and  potential  candidate 
countries  in  the  context  of  the  pre-accession  fiscal  surveillance  took  place  at  an  expert 
meeting in May 2011. 

Visa  liberalisation  for  Albanian  citizens  was  granted  by  the  European  Parliament  and  the 
Council as of 15 December 2010. It applies to holders of biometric passports travelling to the 
Schengen area . This decision was based on fulfilment of the specific conditions set out in the 
roadmap  for  visa  liberalisation.  Implementation  of  the  visa  free  regime  has  been  smooth  so 
far.  To  ensure  the  continued  implementation  of  the  commitments,  a  post  visa  liberalisation 
monitoring mechanism was established in view of increased numbers of asylum seekers from 
the region. The Commission presented its first monitoring report to the European Parliament 
and the Council in June 2011. An agreement on readmission between the European Union and 
Albania has been in force since 2006. 

Pre-accession  financial  assistance  to  Albania  is  provided  under  the  Instrument  for  Pre-
Accession Assistance (IPA). Through IPA National Programmes, the EU allocated a total of € 
83.2  million  in  2010  and  €  82.0  million  for  2011.  The  year  2010  also  saw  progress  in  the 
preparation  of  the  Multi-Annual  Indicative  Planning  Document  (MIPD)  2011-2013,  which 
adopts a sectoral approach with the focus on Justice and Home Affairs, Public Administration 
Reform, Transport, Environment and Climate Change, Social Development, Agriculture and 
Rural  Development.  The  MIPD  2011-2013  for  Albania  was  adopted  in  July  2011.  IPA 
assistance is implemented by the EU Delegation in Tirana.  

Albania  continues  to  participate  in  the  implementation  of  three  cross  border  cooperation 
programmes  at  "internal  borders"  within  the  Western  Balkans  (Montenegro,  the  former 
Yugoslav  Republic  of  Macedonia,  Kosovo4);  in  one  bilateral  cross  border  cooperation 
programme  with  an  EU  Member  State  (Greece);  and  in  three  multilateral  programmes 
(including EU Member States), i.e. in the ERDF European Trans-National Programmes South 
East  European  Space  and  Mediterranean  Space,  as  well  as  in  the  Adriatic  regional 
programme. 

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4 

The  key  priorities  concern  the  following  areas:  the  proper  functioning  of  parliament;  adopting 
reinforced  majority  laws;  appointment  procedures  and  appointments  for  key  institutions;  electoral 
reform; the conduct of elections; public administration reform; rule of law and judicial reform; fighting 
corruption;  fighting  organised  crime;  addressing  property  issues;  reinforcing  human  rights  and 
implementing  anti-discrimination  policies;  improving  the  treatment  of  detainees  and  applying 
recommendations of the Ombudsman. For the full text of the key priorities, please see COM (2010)680.  
under UNSCR 1244/1999 

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IPA  projects  in  support  of  civil  society  in  the  period  2009-2011  focused  on  civil  society 
organisations  dealing  with  the  fight  against  corruption,  organised  crime  and  human 
trafficking,  with  environmental  protection  and  education,  and  also  with  poverty  alleviation. 
The Commission has reviewed the Civil Society Facility to reach out more effectively to local 
community-based organisations, to better target needs in each country and to provide longer-
term seed-funding to NGOs. 

Albania  continues  to  participate  actively  in  three  EU  Programmes:  the  7th  Framework 
Programme  (FP7)  for  research,  technological  development  and  demonstration  activities 
(2007-2013),  the  Entrepreneurship  and  Innovation  specific  Programme  (EIP)  of  the 
Competitiveness  and  Innovation  Framework  Programme  (2007-2013)  and  the  Europe  for 
Citizens Programme. IPA funds are used to meet part of the costs of participation in all three 
programmes. 

2. 

POLITICAL CRITERIA 

This  section  examines  the  progress  made  by  Albania  towards  meeting  the  Copenhagen 
political  criteria,  which  require  stability  of  institutions  guaranteeing  democracy,  the  rule  of 
law, human rights and respect for and protection of minorities. 

It  also  monitors  compliance  with  international  obligations,  regional  cooperation  and  good 
neighbourly relations with enlargement countries and Member States. 

It analyses fulfilment of the 2010 Opinion's key priorities in particular. 

2.1. 

Democracy and the rule of law 

Albania's  domestic  political  scene  has  been  dominated  by  the  continuation  of  the  political 
stalemate  and  the  partial  boycott  of  Parliament  by  the  opposition.  This  political  deadlock 
dates  back  to  the  June  2009  general  elections.  The  outcome  of  these  elections,  which  were 
considered  by  OSCE-ODIHR  as  meeting  most  international  standards,  although  marked  by 
shortcomings, was contested by the Socialist Party. The violent incidents of 21 January 2011, 
which  led  to  the  death  of  four  demonstrators,  amplified  the  climate  of  mistrust  not  only 
between political forces but also vis-à-vis State institutions. The local elections of 8 May, as a 
result  of  the  controversial  vote  count  of  misplaced  ballots  and  contested  results  in  Tirana, 
further  accentuated  the  polarization  between  ruling  majority  and  opposition.  All  of  this 
diverted  attention  from  much-needed  EU  policy  reforms.  Against  this  background,  the 
government made some efforts to move ahead on the EU integration agenda, and in particular 
to prepare an action plan to address the recommendations of the Commission's 2010 Opinion. 
These efforts were mirrored by good cooperation between the ruling majority and opposition 
on the Action Plan in the parliamentary committee for European integration and joint work to 
achieve agreement on necessary reforms. Efforts were also made to launch working groups on 
electoral reform, although these stalled. 

Parliament 

Some modest progress was made in the organisation of the proceedings of Parliament. This 
includes  a  limited  number  of  amendments  to  the  Parliament's  rules  of  procedure,  some  of 
which - such as moving the free speaking time to the end of a Parliamentary session, are an 
improvement over past practice. Other improvements include changes introduced by order of 
the  Parliament's  Speaker  in  January  2011  such  as  those  involving  chairpersons  of 

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parliamentary  standing  committees  in  the  setting  of  the  parliamentary  agenda,  and  the  full 
transcription  and  publication  of  the  minutes  not  only  of  parliamentary  sessions  but  of  all 
parliamentary committee meetings. 

In March 2011, the Parliament established a committee of inquiry, with the support of a large 
majority of Members of Parliament (MP), to investigate the management and activities of the 
leading bodies and services of the Parliament during the period September 2005 to December 
2010. The committee held one meeting before the local government elections in May. 

However, parliamentary work continued to be seriously hampered by the political stalemate 
between  ruling  majority  and  opposition,  the  lack  of  constructive  political  dialogue  and 
increased  confrontational  rhetoric  fuelled  by  the  events  of  21  January  and  the  controversial 
process and outcome of the mayoral election in Tirana. The opposition ended its long boycott 
of parliamentary work on 5 September. 

Due  to  the  political  deadlock,  progress  regarding  legislative  scrutiny  and  the  oversight 
function  of  the  executive  remains  insufficient.  Some  amendments  to  the  rules  of  procedure, 
proposed  and  adopted  with  votes  of  the  ruling  majority,  include  taking  tougher  disciplinary 
measures against Members of Parliament. The inquiry committee into the leading bodies and 
services of the Parliament has not been mandated to conduct an analysis of the parliament's 
rules of procedure.  

There  have  been  some  serious  efforts  to  establish  inter-party  cooperation  in  the  European 
Integration  Committee,  chaired  by  the  opposition,  in  particular  to  work  on  the  Opinion 
follow-up action plan. The Minister and the Deputy Minister of European Integration reported 
a number of times to the committee on European integration matters, which had not been the 
case before. Agreement has not yet been reached on key reform steps and measures to address 
the key priorities of the Opinion, which were included in the opinion follow-up action plan.  

On  the  whole,  the  proper  functioning  of  Parliament  based  on  constructive  and  sustained 
political  dialogue  between  all  parties  –  which  is  a  key  priority  of  the  Opinion  –  is  not  yet 
ensured. 

During the reporting period the Parliament passed more than one hundred laws. However, the 
adoption of a number of much-needed laws requiring a three-fifths majority, which is a key 
priority of the Opinion, and where a consensus between majority and opposition is needed, is 
still pending. The limited or interrupted cooperation between ruling majority and opposition 
in  parliamentary  committees,  the  continuing  restraints  on  access  to  specialist  expertise, 
although improvements have been made in some cases, and further limited consultation with 
third parties, including civil society, raise questions about the quality of adopted laws. 

Several  measures  were  taken  to  strengthen  the  administrative  capacity  of  the  parliament, 
including  the  recruitment  of  additional  staff.  Additional  advisory  staff  was  provided  to  the 
Integration Committee in March 2011. Further steps were taken to strengthen the Parliament's 
infrastructures and to facilitate communication both within Parliament and with the public. A 
high  quality  network  was  installed,  and  online  broadcasting  of  plenary  sessions  and  the 
modernisation of other facilities contributed to increased transparency. However, there is still 
lack  of  administrative  capacity  in  Parliament,  and  the  politicisation  of  appointments  which 
hampers  the  independence  and  professionalism  of  staff,  remain  a  cause  for  concern. 
Consultation of civil society in the legislative process remains insufficient. 

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In  June  2011,  a  Constitutional  Court  ruling  requested  by  the  ruling  majority  concluded  that 
criteria  for  appointments  to  the  Constitutional  Court  and  High  Court  were  to  be  defined  in 
cooperation  between  the  President  and  the  Parliament.  The  hearing  and  voting  process  for 
presidential  appointments,  which  has  resumed  after  a  period  of  suspension,  continued  to  be 
marked  by  politicisation  and  confrontational  rhetoric.  Parliament  has  not  yet  ensured  an 
orderly hearing and voting process for constitutional and high court appointments, which is a 
key priority of the Opinion.  

No  progress  was  made  in  amending  the  legislative  framework  for  elections  in  line  with 
OSCE/ODIHR recommendations, which is a key priority of the Opinion. In October 2010, the 
government  initiated  a  cross-party  round  table  to  address  the  need  for  electoral  reform.  It 
invited  all  parties  to  propose  amendments  in  line  with  OSCE/ODIHR  recommendations.  In 
March 2011, a political agreement was signed by the parties of the ruling majority (without 
the opposition) to set up a bipartisan parliamentary committee on electoral reform after the 8 
May local elections. This committee has not yet been established. Electoral reform is blocked 
by the political stalemate and lack of political dialogue between the main parties.  

The 8 May local government elections took place in a highly politically polarised atmosphere, 
which  affected  the  overall  conduct  of  the  process.  According  to  OSCE/ODIHR's  final 
assessment, while the elections were competitive and transparent, mistrust between political 
parties  prevailed  and  the  parties  did  not  discharge  their  electoral  duties  in  a  responsible 
manner.  This  climate  adversely  affected 
the  elections.  The 
OSCE/ODIHR  assessment  also  pointed  out  that,  despite  a  competitive  process  in  terms  of 
campaigning, numerous violent incidents marred the campaign period. Political parties did not 
comply with the gender requirement quota, which resulted in a low level of participation by 
women.  Notable  progress  was  made  regarding  the  improvement  of  voter  lists.  However, 
problems relating to their accuracy persisted. 

the  administration  of 

The OSCE/ODIHR observation mission noted that, while voting proceeded relatively well on 
Election Day, significant problems occurred in around 10% of voting centres. It also pointed 
to  an  overall  positive,  but  lengthy  counting  process.  In  particular,  the  determination  of  the 
results of the Tirana mayoral election became a highly controversial process and the decisions 
of  the  Central  Election  Commission  (CEC)  were  taken  along  partisan  lines,  lack  reasoning 
and included inconsistencies. Political and legal controversy also occurred with regard to the 
handling of appeals by the Electoral College, in particular regarding Tirana. 

Overall,  despite  a  number  of  positive  aspects,  such  as  the  competitiveness  of  the  process, 
transparent technical preparations, relatively good conduct on voting day, a positive counting 
process,  plurality  and  diversity  of  media  coverage,  the  conduct  of  elections,  which  is  a  key 
priority  of  the  Opinion,  only  partially  met  the  best  international  standards  and  practices. 
Although  the  Electoral  Code  remains  a  good  legal  and  technical  basis  for  the  electoral 
process, the electoral reform is a necessity for further progress. In this context, the role of the 
political  parties  is  important  not  only  as  the  main  actors  in  reform  processes,  but  also  in 
ensuring that the political climate does not negatively influence the process and consequently 
does not have an adverse impact on the expression of the will of voters. The implementation 
of the OSCE/ODIHR recommendations for these elections as well as of those made in 2009 
should constitute a priority for Albania's institutions and political class. 

Overall, despite some improvements to parliamentary rules and practice and an increase in the 
Parliament's  administrative  capacities,  the  performance  of  the  Parliament  on  legislative  and 
oversight  functions,  which  is  a  key  priority  of  the  Opinion,  remains  insufficient.  The  long-

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standing  political  stalemate,  which  was  further  fuelled  by  the  21  January  events  and 
controversy  over  the  Tirana  mayoral  elections,  has  seriously  hampered  both  parliamentary 
work and the necessary sustained and constructive political dialogue. The political stalemate 
also  hampered  establishment  of  a  consensus  enabling  the  implementation  of  relevant  EU 
reforms. The opposition's partial boycott has obstructed parliamentary business. In this regard 
the end of the opposition's boycott and their return to parliamentary work on 5 September is a 
positive  step  towards  the  normalisation  of  political  dialogue.  An  inclusive  political 
environment  conducive  to  cross-party  consensus  needs  to  be  fostered  in  Parliament.  The 
climate of polarization and mistrust between the government and opposition has affected the 
local  elections  of  8  May;  there  are  areas  where  international  standards  were  met,  in  the 
conduct  of  these  elections,  a  key  priority  of  the  Opinion,  and  areas  where  this  was  not  the 
case.  Electoral  reform,  a  key  priority  of  the  Opinion,  has  stalled.  Parliament  has  not  yet 
ensured an orderly hearing and a vote on constitutional and high court appointments, which is 
a key priority of the Opinion. 

Government 

The government coalition between the Democratic Party (DP) and the Socialist Movement for 
Integration (SMI) remained in place during the reporting period. In January 2011, following 
allegations  of  corruption,  the  Deputy  Prime  Minister  and  Minister  of  Economy,  Ilir  Meta, 
resigned. Lulzim Basha, running as candidate for mayor of Tirana, resigned from his position 
as Minister of the Interior. 

The  Ministry  of  European  Integration  (MoEI)  has  made  significant  efforts  in  preparing  an 
Action  Plan  to  address  the  Opinion's  key  priorities,  which  was  coordinated  with  line 
Ministries  and  other  relevant  institutions.  The  MoEI  actively  consulted  on  the  Action  Plan 
with  all  key  stakeholders  and  reported  on  it  to  the  parliamentary  Committee  on  European 
Integration. The Action Plan was adopted by the Council of Ministers in June. It has still not 
been  approved  by  Parliament.  Agreement  on  the  Action  Plan  in  Parliament  is  particularly 
relevant for reform areas requiring consensual decisions.  

Steps have been taken to assess the legislative gap as regards alignment with the acquis and to 
prepare  adjustments  to  the  National  Plan  for  the  Implementation  of  the  SAA  2009-2014 
(NPISAA) accordingly. However, the NPISAA does have some shortcomings, including the 
lack  of  full  coverage  of  acquis  chapters.  It  also  lacks  a  comprehensive  assessment  of  the 
administrative capacities for the implementation of the acquis.  

In  order  to  fully  play  its  role,  the  MoEI  will  require  further  resources  in  order  to  steer  and 
manage  the  EU  approximation  process  in  full  consultation  with  the  relevant  line  ministries. 
The use of an IT system to improve the planning process, which has been ready since April 
2011, has been delayed due to the pending adoption of amendments to the rules of procedure 
of the Council of Ministers. Progress on preparations for the harmonisation of legislation with 
the acquis has been limited, in part due to local elections which have taken up considerable 
attention on the part of politicians at central level. 

Legislative drafting in line ministries needs to be improved by strengthening preparatory work 
and by appropriate consultations. Specific rules on improving transparency and consultation 
in  the  legislative  process,  which  Albania  is  committed  to  adopt,  need  to  be  completed.  The 
consultation process with civil society and other partners needs further strengthening. 

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Policy  coordination  needs  to  be  developed  further,  particularly  in  relation  to  the  Inter-
institutional  Coordination  Committee  for  European  Integration  (KKNIE).  The  KKNIE  often 
does  not  meet  in  the  format  laid  down  in  the  government  regulation,  and  preparation  of 
decisions for the government is hampered. The members of inter-institutional working groups 
are appointed on an ad-hoc basis, which contributes to the weakening of institutional memory. 
Some of the working groups have not met since October 2010. Despite these shortcomings, 
the KKNIE has played a role in defining the action plan for addressing the key priorities of 
the Opinion.  

There  were  some  developments  in  local  government  legislation.  In  November  2010, 
Parliament  approved  amendments  to  the  Law  on  Local  Government  Taxes,  giving  local 
government  units  a  mandate  to  reimburse  small  businesses  for  the  cost  of  purchasing  and 
installing  fiscal  devices.  The  increasingly  difficult  relationship  between  the  DP-led  central 
government and the majority of SP-led local government units has continued to impact on the 
process of decentralisation reform, which had previously been successful. 

The  management  of  local  government  taxes  remains  weak.  Local  government  authorities 
continue  to  lack  the  administrative  capacity  to  improve  revenue  collection,  increase  their 
fiscal autonomy and improve their performance accordingly. Several local government units 
were unable to approve the 2010 municipal budget - a situation which continued during 2011. 
The access of local government units to loans, as provided for by the law on local borrowing, 
remained limited. 

Overall, considerable efforts were made by government and by the Parliamentary Committee 
for  European  Integration  to  advance  and  coordinate  reforms  on  EU  integration,  and  in 
particular to prepare an action plan to address the recommendations of the Commission's 2010 
Opinion. The quality of legislative drafting and consultation with third parties require further 
improvements.  The  decentralisation  reform  process  was  adversely  affected  by  the  difficult 
relationship between central and local government. 

Public Administration 

Some limited progress can be reported in the area of public administration reform, which is a 
key  priority  of  the  Opinion.  The  Government  has  adopted  a  policy  paper  exploring  various 
changes  to  be  put  in  place  by  means  of  a  new  Law  on  the  Civil  Service.  On  this  basis, 
amendments to the Law on the Civil Service were prepared. A policy paper on a new Law on 
Organisation  and  Functioning  of  the  State  Public  Administration  and  an  initial  draft  of  this 
new law were prepared and communicated  to stakeholders  within the public sector.  In June 
2011,  as  part  of  the  inspection  reform,  Parliament  adopted  the  Law  on  Inspections.  In  the 
same  month,  a  Council  of  Ministers  decision  defined  standards  and  methods  for  the 
establishment of public bodies in terms of structure and organisation. 

However, public administration reform has not advanced much overall. Important legislative 
acts requiring a three-fifths majority in Parliament, such as the law on general administrative 
procedures,  the  law  on  functioning  of  public  administration  and  the  law  on  administrative 
courts, are awaiting adoption.  

Pending adoption of amendments to the Civil Service Law, the civil service is suffering from 
important shortcomings, especially in respect of the merit principle in recruitment procedures, 
allocation  of  temporary  contracts,  rules  on  promotion  and  mobility  and  dismissal  of  civil 
servants.  The  functioning  of  the  civil  service  continues  to  suffer  from  politicisation,  in 

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particular  as  regards  appointments.  Implementation  of  Prime  Ministerial  (PM)  Order  of 
October  2010  setting  a  maximum  limit  of  2.5%  temporary  appointments  in  civil  service 
positions  remains  poor.  Evidence  of  proper  implementation  of  the  PM  order  still  has  to  be 
provided.  

The Human Resources Management Information System (HRMIS) is not yet operational and 
its database is incomplete.  

The  capacity  of  the  Department  of  Public  Administration  (DOPA)  was  further  increased  by 
four additional staff and it can be considered as adequate overall. However, in the institutional 
context,  it  lacks  the  authority  to  play  its  role  effectively.  DOPA's  capacity  to  collect  and 
elaborate data from Ministries and to draft relevant reports remains insufficient. Data on the 
recruitment  of  civil  servants  since  the  adoption  of  the  PM  order  in  October  2010  are 
incomplete and not up-to-date. 

The Training Institute for Public Administration  (TIPA)  has  encountered serious  difficulties 
in  implementing  planned  training  activities,  and  at  the  same  time  has  had  to  cope  with  a 
substantial reduction of its operational budget. In June, with the vote of the ruling majority, 
Parliament appointed the fifth member of the Civil Service Commission. This post had been 
vacant since 2009, which led to difficulties in the decision-making process. 

Limited progress was made on new types of auditing, such as certification and performance 
auditing,  which  is  being  developed  gradually  by  the  supreme  audit  institution  (SAI). 
However,  reporting  to  the  Parliament  on  audit  findings  and  the  follow-up  of  audit 
recommendations still need to be improved in order to enable the SAI to fulfil its role in the 
national governance framework. 

No progress was made on the appointment of the Ombudsman, a key priority of the Opinion, 
which  has  been  pending  since  February  2010.  Given  the  importance  of  this  independent 
institution,  there  is  a  need  for  an  effective,  transparent  and  non  politicised  process  of 
appointment.  Nonetheless,  the  institution  has  proved  to  be  active  and  responsive  in 
investigating cases and drafting ad-hoc and comprehensive annual reports. 

Overall, despite some reform measures such as the Council of Ministers decision on structure 
and  organisation  of  public  bodies  of  June  2011,  essential  steps  in  public  administration 
reform, which is a key priority of the Opinion, including amendments to the civil service law, 
have  not  been  completed.  Adoption  of  relevant  legislation  is  pending  and  contingent  on 
overcoming  the  persistent  political  stalemate.  Implementation  of  the  existing  laws  and 
administrative  acts  remains  weak.  In  the  institutional  context,  DOPA  continues  to  lack 
sufficient  authority  to  take  up  its  role  fully.  Establishing  an  independent,  merit-based  and 
professional civil service free from political interference has yet to be achieved. Appointment 
of the Ombudsman is still pending. 

Judicial system (see also Chapter 23 – Judiciary and fundamental rights) 

There has been some limited progress in completing the legal framework for judicial reform. 
A  Judicial  Reform  Strategy  and  Action  Plan,  consulted  with  a  broad  group  of  stakeholders 
were  adopted  in  July.  They  form  a  good  basis  for  reform  efforts.  Adoption  but  also 
implementation  of  the  strategy  and  action  plan  is  a  key  priority  of  the  Opinion. 
Implementation is only starting; it will require the allocation of adequate human and financial 
resources as well as sound inter-institutional cooperation. A new law on mediation in conflict 

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resolution and relevant by-laws in line with EU standards were adopted in February 2011. In 
addition, by-laws to the judicial police law have now been adopted. 

However, relevant legislation such as the law on administrative courts and amendments to the 
criminal  code,  which  requires  a  three-fifths  majority  vote  in  Parliament,  is  pending.  Further 
important  legislation  requiring  a  three-fifths  majority  vote  such  as  the  law  on  judicial 
administration and the law on the National Judicial Conference still need to be prepared and 
brought to Parliament. 

No further progress has been made as regards the independence of the judiciary. There have 
been  concerns  about  undue  interference  or  hindrance  of  independent  investigation  and 
prosecution of possible criminal offences following the events of 21 January, which saw the 
death  of  four  demonstrators.  The  process  of  appointing  judges  to  the  High  Court  and  the 
Constitutional Court remains an issue of concern in terms of the length the process and most 
of  all  in  terms  of  the  risk  of  politicisation.  The  neutrality  and  independence  of  these 
institutions are still not fully guaranteed.  

Regarding the professionalism of the judiciary, efforts have been made to align the work of 
the  High  Council  of  Justice  (HCJ)  with  European  standards  by  means  of  amending  the 
evaluation system for judges, improving the reasoning behind appointment decisions taken by 
the HCJ and the creation of a Commission on transfers, promotion and appointment of judges. 
The effectiveness of the changes made to the evaluation system now needs to be verified in 
practice. The timing of the implementation of the new evaluation system has to be decided.  

As  regards  impartiality,  a  computerised  case  management  system  and  random  allocation  of 
cases  in  criminal  and  civil  procedures  are  in  place  in  most  judicial  offices.  Further  efforts 
need to be made in order to have a fully uniform and harmonised integrated case management 
system functioning in all courts, including the sound gathering of statistics. There is a code of 
ethics applicable to judges but its effective implementation remains a challenge. 

In  relation  to  accountability  in  the  judiciary,  the  issue  of  overlap  of  inspection  powers 
between the inspectorates of the HCJ and of the Ministry of Justice (MoJ) is still unresolved. 
In the absence of a revision of the law on the HCJ, which would require a three-fifths majority 
vote  in  Parliament,  the  MoJ  and  HCJ  have  adopted  a  Memorandum  of  Understanding  to 
clarify some aspects of the overlapping inspection systems. 

No  progress  has  been  made  in  combating  corruption  within  the  judiciary.  One  of  the  main 
factors obstructing investigations into possible cases of corruption in the judiciary is the full 
immunity enjoyed by judges. It will be necessary to limit or abolish the immunity of judges, 
which  requires  changes  to  the  constitution.  The  poor  working  conditions  and  relatively  low 
salaries of judges are risk factors for corruption in the judiciary. 

No further progress was made regarding the efficiency of the judiciary. Reforms of the High 
Court planned by the MoJ aimed at improving the efficiency of the Court and reforming its 
internal organisation have been delayed.  

Working conditions in courts are still poor in general and hearings often take place in judges' 
offices,  which  hampers  transparency  and  efficiency.  There  is  still  no  sound  and  adequate 
system of training for court administrators. 

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Court management remains poor due to a lack of human and financial resources, in particular 
in district courts of first instance. The yearly budget for the judiciary is € 69 million, which 
corresponds to 0.7% of the Albanian GDP. The backlog of court cases, and in particular the 
large number of cases older than three years, is still a problem. Unreasonable delays in court 
cases,  which  are  often  caused  by  postponement  of  court  proceedings  due  to  the  absence  of 
either the lawyers or the judges, and the unjustifiably large number of trial sessions for cases 
remains a matter of serious concern. The National Chamber of Advocacy has started drawing 
up a draft proposal to reform the disciplinary measures mechanisms for lawyers. Weaknesses 
in the drafting and insufficient reasoning of judgments remain a cause for concern. Criminal 
proceedings  in  the  so  called  Gërdec  case  (the  deadly  blast  in  2008  which  killed  26  people) 
have  so  far  included  152  hearings.  There  is  a  risk  that  unjustified  and  persistent  delays  in 
proceedings  prevent  fulfilment  of  the  principle  of  a  fair  trial  as  enshrined  in  the  Albanian 
constitution. 

Enforcement of court decisions is weak, in particular in cases where state institutions are the 
defendants.  The  new  private  bailiff  system  has  started  to  operate,  but  there  is  a  need  to 
improve  case  management  for  bailiffs.  Further  efforts  are  needed  in  order  to  increase 
enforcement rates. 

The  workload  of  the  Constitutional  Court  is  increasing,  especially  in  relation  to  the  alleged 
violations  of  the  right  to  a  fair  trial.  Moreover,  the  Court  lacks  adequate  office  space  and 
equipment for its effective functioning.  

Overall, limited progress was made in completing judicial reform, which is a key priority of 
the Opinion. The judicial reform strategy and its action plan were adopted in July. They form 
a good basis for reform efforts. Implementation is only starting; it will require the allocation 
of  adequate  human  and  financial  resources  as  well  as  sound  inter-institutional  cooperation. 
Important  legislation  requiring  a  three-fifths  majority  vote  in  Parliament  such  as  the  law  on 
administrative  courts  is  pending  adoption.  Court  backlogs  and  the  excessive  length  of 
proceedings undermine the efficiency of the judicial system. Budgetary appropriations for the 
judiciary  remain  insufficient  overall.  The  rate  of  enforcement  of  decisions  is  still  poor.  No 
steps have been taken to combat corruption in the judiciary, including limiting or abolishing 
the immunity of judges. 

Anti-corruption policy (see also Chapter 23 – Judiciary and fundamental rights) 

Some progress was made regarding the government's policies to fight corruption. In relation 
to the strategic policy approach on corruption, a new anti-corruption action plan for the period 
2011-2013  encompassing  individual  action  plans  for  all  government  ministries/agencies 
concerned  was  adopted  in  June  2011.  The  quality  of  action  plans,  including  indicators  to 
monitor progress, has improved. Implementation of action plans is proceeding. 

the 

in  strengthening 

There  has  been  progress 
implementing 
recommendations of the Group of States against corruption (GRECO) related to the issue of 
incrimination and political party financing. Regarding incrimination, recommendations were 
partly implemented; the Criminal Code amendments are awaiting adoption in Parliament by a 
three-fifths  majority  vote.  Regarding  political  party  financing,  all  recommendations  but  one 
were  implemented;  the  latter  is  partly  implemented  because  there  is  no  clear  deadline  for 
submitting party annual financial reports. 

legal  framework  by 

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The institutional framework to combat corruption has been further developed. With a view to 
improving  coordination  in  the  implementation  of  the  anti-corruption  strategy,  a  clearer 
distribution  of  responsibilities  was  defined  between  the  inter-ministerial  working  group 
(IWG),  the  inter-ministerial  Technical  Group  and  the  Technical  Secretariat  of  the  IWG.  A 
new  internal  control  department  was  established  in  the  General  Directorate  of  Customs. 
However,  as  in  the  Directorate  of  Tax  Office,  this  department  focuses  more  on  financial 
control tasks than explicitly on anti-corruption measures. Free phone numbers for citizens to 
report suspected cases have been installed in a number of institutions concerned. 

Efforts  to  improve  inter-institutional  cooperation  were  made  through  the  signing  of 
memoranda  of  understanding  (MoU)  foreseeing  in  particular  an  increased  exchange  of 
information and cooperation on investigations. The Department of Internal Control and Anti-
Corruption (DIACA) and the High Inspectorate for Declaration and Audit of Assets (HIDAA) 
have each signed separate such memoranda with the High Council of Justice (HCJ) and with 
an  anti-corruption  NGO.  However,  the  implementation  and  effectiveness  of  such  MoU  still 
have to be verified in practice. 

Some limited preventive measures were taken by launching awareness-raising initiatives. 

However,  overall 
Corruption is prevalent in many areas and remains a particularly serious problem. 

implementation  of  anti-corruption  measures  remains 

insufficient. 

There  are  shortcomings  in  the  administrative  capacity  of  relevant  institutions  and  in  the 
proposed  mechanisms  to  ensure  proper  monitoring  of  the  implementation  of  the  anti-
corruption  action  plans.  The  DIACA  in  particular  has  not  been  strengthened  sufficiently  as 
regards  its  staff  and  its  monitoring  competences;  its  ability  to  effectively  coordinate  anti-
corruption  policies  accordingly  remains  limited.  Reporting  on  anti-corruption  measures  and 
implementation  by  responsible  authorities  needs  to  be  improved.  Criminal  law  statistics  as 
well as statistics on conflict of interest cases and prevention measures remain insufficient or 
unreliable.  

There continues to be a lack of human resources and technical infrastructure in a number of 
investigation and law enforcement agencies. Joint Investigative Units, although continuing to 
be  good  instruments  for  investigating  and  prosecuting  corruption  cases,  have  insufficient 
human  resources  and  technical  equipment.  HIDAA,  although  an  important  player  in 
combating corruption, has limited resources to undertake extensive inspections and full audits 
of  asset  declarations  by  officials.  In  the  light  of  this,  HIDAA  needs  to  further  strengthen 
cooperation  and  exchange  of  information  with  other  services  such  as  the  Financial 
Investigation Unit, Customs services, or the Immovable Property Registration in order to be 
able to conduct administrative investigations more effectively.  

Investigation into possible corruption cases is hampered by the lack of access to the various 
registries (e.g. car registry and land register) by investigation and law enforcement agencies 
and by the lack of a central register of bank accounts.  

Proactive  investigation,  i.e.  systematic,  targeted  and  risk-based  investigations  into  possible 
corruption  areas  and  cases,  is  lacking  in  Albania.  The  full  immunity  of  high  level  officials 
remains a major obstacle to effective and successful investigation. Immunity of judges is only 
rarely  lifted  and  the  lack  of  confidentiality  in  a  case  following  the  lifting  of  immunity 
seriously impedes effective investigation. Following an initiative by a number of Members of 
Parliament  in  the  ruling  majority  MPs  can  waive  their  immunity  in  cases  of  criminal 

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prosecution on corruption charges by signing an individual voluntary declaration at the start 
of  their  mandate;  this  followed  the  amendment  of  parliamentary  rules  and  regulations  on 
immunity  from  criminal  prosecution.  While  this  expresses  political  will  to  tackle  high-level 
corruption, the legal validity of these declarations is open to question. An amendment of the 
relevant constitutional provisions may be required in order to limit or abolish immunity both 
for judges and for MPs. 

Although  cooperation  between  agencies,  including  joint  training,  has  improved  further,  the 
exchange  of  relevant  information  is  often  late  or  ineffective.  Cooperation  between  law 
enforcement  agencies  and  prosecution  on  the  one  hand,  and  courts  on  the  other,  remains 
insufficient. 

Little progress has been made in developing a solid track record of proactive investigations, 
prosecutions and  convictions in corruption cases at all levels, which is a key  priority of  the 
Opinion.  In  particular,  investigation  of  medium  and  high  level  corruption  cases  is  rare.  The 
General Prosecutor launched an investigation on charges of corruption and misuse of office 
against  the  former  Deputy  Prime  Minister  (PM),  Ilir  Meta,  following  the  publication  of  a 
controversial  video.  This  subsequently  also  led  to  charges  being  brought  against  the  former 
Minister of Economy, Dritan Prifti. The case concerning former deputy PM Meta is currently 
the only high-level case which has gone to court. 

Overall,  limited  progress  was  made  in  the  field  of  anti-corruption  policy,  which  is  a  key 
priority of the Opinion. Although the legal framework and inter-agency structures are mostly 
in place, implementation of specific actions on the other hand remains ineffective overall and 
the results are insufficient. Public awareness campaigns are only just starting. The immunity 
of certain public officials, the absence of a proactive approach and the lack of resources and 
equipment continue to seriously obstruct effective investigation. There is no solid track record 
of  investigations,  prosecution  and  convictions  at  all  levels.  Corruption  is  prevalent  in  many 
areas and continues to be a particularly serious problem. 

2.2. 

Human  rights  and  the protection of minorities  (see  also  Chapter  23 –  Judiciary 
and fundamental rights) 

Observance of international human rights law 

Albania has continued the process of ratification of international human rights instruments 
by  ratifying  the  Council  of  Europe  Convention  on  Human  Rights  and  Biomedicine. 
Ratification  of  the  UN  Convention  on  the  Rights  of  Persons  with  Disabilities,  signed  in 
December 2009, is still pending. Delays in application and non-compliance with judgments of 
the European Court of Human Rights (ECtHR) are an issue of concern. Albania's decision 
to extradite a murder suspect to the United States in breach of an interim measure of the Court 
was  criticised  by  the  Rapporteur  of  the  Parliamentary  Assembly  of  the  Council  of  Europe. 
During  the  reporting  period,  the  ECtHR  delivered  5  judgments  finding  that  Albania  had 
violated rights guaranteed by the European Convention on Human Rights (ECHR). A total of 
83 new applications allocated to a decision body have been made to the ECtHR since October 
2010. In September 2011, 321 allocated applications regarding Albania were pending before 
the ECtHR.  

As  regards  promotion  and  enforcement  of  human  rights,  the  appointment  of  the  new 
Ombudsman  has  been  pending  since  February  2010.  Due  to  this  legal  void,  the  process  of 
appointing  three  Commissioners  of  the  Ombudsman's  Office  in  November  2010  did  not 

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follow the procedures laid down by law. The Office of the Commissioner for Protection from 
Discrimination has become operational since January 2011 and moved to permanent premises 
in August, while recruitment of staff is nearing completion. Its capacity to manage cases and 
encourage  potential  victims  to  come  forward  needs  to  be  strengthened.  The  allocation  of 
sufficient  resources  to  ensure  the  full  independence  of  human  rights  bodies  has  not  been 
guaranteed.  Albania's  respect  for  human  rights  continues  to  be  monitored  by  international 
bodies.  Following  the  events  of  21  January,  exceptional  visits  were  made  by  both  the 
Committee  for  the  Prevention  of  Torture  and  the  Commissioner  for  Human  Rights  of  the 
Council  of  Europe.  The  latter  underlined  the  need  for  thorough,  impartial  and  credible 
investigations into these events and called for the persons responsible to be held accountable. 

Civil and Political Rights 

Taking additional measures to improve the treatment of detainees in police stations, pre-trial 
detention  and  prisons;  strengthening  the  judicial  follow-up  of  case  of  ill-treatment  and 
improving  the  application  of  recommendations  of  the  Ombudsman  in  this  field  is  a  key 
priority of the Opinion.  

With regard to the prevention of torture and ill-treatment and the fight against impunity, 
some progress has been made in the penitentiary system, but there remain concerns over arrest 
and  police  custody.  The  General  Directorate  of  Prisons  has  organised  training  events, 
multidisciplinary and thematic inspections, and has made efforts to address reported cases of 
ill-treatment.  A  new  methodology  on  treatment  of detainees was approved in January 2011. 
There has been some progress in procedures relating to the follow-up of recommendations of 
the Ombudsman in this field, with a specific working group being set up within the Ministry 
of Justice. However, it remains to be seen whether this will lead to the better application of 
the recommendations. Amendments to the manual on the rules and treatment of arrested and 
detained persons in police units have been drafted. 

Cases of ill-treatment and excessive use of force continue to be reported, particularly during 
arrest  and  police  custody.  Such  abuses  were  for  instance  reported  in  the  aftermath  of  the 
events of 21 January 2011. Procedures for processing accompanied or arrested persons are not 
systematically  observed.  There  is  no  evidence  of  any  substantial  progress  on  increasing  the 
judicial follow-up of cases of ill-treatment. Budgetary allocations to the National Prevention 
Mechanism against Torture remain insufficient. The Memorandum of Understanding between 
the  Ministries  of  Justice  and  Health  regarding  the  care  of  mentally  ill  offenders  is  under 
negotiations  but  its  signature  is  still  pending.  Mentally  ill  persons  convicted  of  crime  and 
under  obligatory  treatment  continue  to  be  held  in  the  Institute  of  Kruja,  instead  of  a 
specialised  forensic  institution.  The  treatment  of  mentally  ill  offenders  still  needs  to  be 
improved.  The  lack  of  a  permanent  appropriate  solution  for  the  placement  of  those  under 
obligatory treatment remains a serious concern. 

Blood  feuds  and  extra-judicial  killings  continue  to  affect  some  sections  of  the  population, 
with some families still choosing self-isolation for fear of reprisals. Although there is a lack of 
fully reliable data on the numbers involved, sources indicate that this phenomenon continues 
to exist and remains an issue of concern.  

Some  progress  has  been  made  concerning  the prison  system.  Improvements  in  penitentiary 
infrastructure  have  continued.  Capacity-building  activities  have  been  held  for  prison 
personnel and some attention has been paid to the treatment of vulnerable persons in prisons. 
In  February  2011,  amendments  to the  Council  of  Ministers  Decision  on  the  approval  of  the 

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overall regulation of prisons were adopted. In April 2011, a Decision to include convicted and 
pre-trial  detainees  in  the  category  of  economically  inactive  persons,  allowing  access  to  free 
health  insurance,  was  adopted.  Development  of  the  probation  service  and  opening  of  new 
offices (now in 8 of the 12 regions) has helped to reduce overcrowding, which stood at around 
10% in June 2011. Efforts have been made by the management in some penitentiary facilities 
to  improve  the  living  conditions  of  persons  deprived  of  their  liberty,  for  instance  through 
increased outdoor breaks. Vocational training continues to be developed. 

However,  important  problems  remain,  particularly  with  regard  to  poor  conditions  in  some 
older  prisons  and  pre-trial  detention  centres,  as  well  as  in  police  commissariats.  Moreover, 
infrastructure planning is not always adequate. There have been several instances of collective 
complaint movements by groups of prisoners about living conditions and the use of physical 
and  psychological  violence  by  staff.  These  need  to  be  thoroughly  investigated.  The  living 
conditions of prisoners largely depend on what is provided by their families, including food. 
Conditions in health care facilities and the lack of heating in many institutions, including in 
some  refurbished  premises,  are  causes  for  concern.  The  use  of  individual  padlocks  on  cell 
doors  poses  a  risk  to  detainees  in  the  event  of  an  evacuation.  Medical  examinations  upon 
entry  into  penitentiary  institutions  have  not  been  conducted  systematically  and  there  are 
concerns over the confidentiality of medical data in prisons and police commissariats. There 
are further problems concerning confidentiality of phone calls and accessibility of complaint 
forms  for  the  Ombudsman.  Continued  over-use  of  pre-trial  detention  for  low-risk  offenders 
and particularly for juveniles remains a concern.  

As  regards  access  to  justice,  a  memorandum  of  understanding  was  signed  in  March  2011 
between  the  State  Commission  for  Legal  Aid  and  the  Commissioner  for  Protection  from 
Discrimination  to  set  provisions  for  free  legal  assistance  for  victims  of  discrimination.  The 
State Commission for Legal Aid was set up, by-laws have been adopted, but the law remains 
to  be  fully  implemented.  Adequate  mechanisms  for  the  objective  assignment  of  lawyers  to 
cases  have  still  to  be  developed.  Access  to  justice  for  vulnerable  persons  and  victims  of 
domestic  violence  is  hampered  by  the  lack  of  implementation  of  the  Law  on  Free  Legal 
Assistance.  Persistent  delays  in  judicial  proceedings  call  into  question  citizens'  effective 
access to justice.  

Freedom  of  expression  continues  to  be  generally  respected,  although  progress  in  this  field 
has  been  very  limited.  A  positive  development  is  the  enhanced  role  of  investigative 
journalism  in  revealing  and  denouncing  corruption.  The  media  provided  extensive  coverage 
of the May 2011 local elections and some outlets took a step towards increased independence 
by  not  broadcasting  ready-made  tapes  provided  by  political  parties.  The  moratorium  on  the 
use of defamation suits  by  government officials  continues  to  be  implemented.  Although  the 
Court  of  Appeal  overturned  the  large  fine  imposed  on  a  TV  channel  in  a  case  involving  a 
high-level politician, the application of the principle of proportionality of fines against media 
outlets or journalists is not always respected. Concerns have been raised in a number of cases 
over what media outlets describe as biased application of fiscal rules, financial pressures and 
bias in judicial proceedings. There has been a case of violence against a journalist who was 
attacked  by  unknown  assailants  on  grounds  reportedly  related  to  his  work.  Editorial 
independence continues to be hampered by political and business interests, which also leads 
to self-censorship. No measures have been taken to enhance transparency in media ownership. 
Amendments  decriminalising  defamation  and  libel  are  pending  a  three-fifths  majority  vote. 
The independence of the public service broadcaster has not been increased and although three 
journalists'  associations  or  trade  unions  exist,  there  still  is  no  self-regulatory  body  for  the 

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media.  Overall,  there  has  been  limited  progress  on  completing  the  legal  framework  on  the 
media. More efforts are needed to ensure media independence and freedom. 

Freedom  of  assembly  and  association  has  generally  been  respected  and  no  cases  of 
deliberate  prohibition  of  public  gatherings  have  been  reported.  The  reporting  period  was 
marked  by  a  succession  of  rallies  and  demonstrations  gathering  supporters  of  the  two  main 
political  parties.  Although  these  were  generally  peaceful,  there  is  serious  concern  regarding 
the violence that ensued during the demonstrations of 21 January 2011, in which four people 
were killed. The investigation into these events is ongoing, albeit very slowly.  

The  strategy  on  human  rights  defenders  is  being  implemented.  The  Agency  for  Support  to 
Civil Society is operational and has launched two calls for proposals. Albanian civil society 
lacks  cooperation  and  capacity;  most  organizations  remain  dependent  on  donors,  leading  to 
excessive  competition  for  funds  in  the  sector.  Civil  society  has  been  consulted  on  some 
legislative  initiatives,  particularly  in  the  field  of  human  rights.  However,  no  systematic 
dialogue is in place and consultation of NGOs in the legislative process remains insufficient 
overall. 

There have been developments in the field of freedom of thought, conscience and religion, 
which  continues  to  be  respected.  In  November  2010,  the  Albanian  Evangelical  Alliance 
signed an agreement with the government according to which Protestantism became the fifth 
official  religion  alongside  the  Sunni  Muslim,  Bektashi,  Orthodox  and  Catholic  religions. 
Based  on  this  agreement  the  Albanian  Evangelical  Alliance  will  also  be  entitled  to  receive 
support from the state budget, as is the case for the other official religious groups. 

Economic and Social Rights (see also Chapter 19 – Social policy and employment) 

Taking  concrete  steps  to  reinforce  the  protection  of  human  rights,  notably  for  women, 
children and Roma, and to effectively implement anti-discrimination policies is a key priority 
of the Opinion.  

Some  progress  has  been  made  regarding  women's  rights  and  gender  equality.  The  2011-
2015 extension of the National Strategy on Gender Equality and the Fight against Domestic 
Violence  was  adopted  in  June  2011.  The  National  Referral  Mechanism  for  victims  of 
domestic violence was established in 17 municipalities. Amendments to the Law on Measures 
against  Domestic  Violence  made  it  a  legal  obligation  for  the  local  government  units  to 
implement  the  Mechanism  and  provided  for  improved  access  to  justice  for  victims  of 
domestic  violence.  The  national  shelter  for  victims  of  domestic  violence  is  operational, 
standards for care of victims in residential public and non-public centres have been adopted 
and training of health care workers to enable them to deal with cases of gender-based violence 
has  taken  place.  Some  awareness-raising  campaigns  have  been  organised  to  enhance 
participation of women in public life and to empower them economically. Some progress was 
made in the application of the gender quota compared to the last elections. 

However, the gender quota was not respected throughout the country in the May 2011 local 
elections. In its report, the OSCE/ODIHR recommended that consideration should be given to 
increasing  the  amount  of  the  fine  for  electoral  subjects  that  do  not  respect  the  gender 
requirement and making receipt of public financing dependent on respecting these provisions. 
Only  five  women  were  elected  mayor  and  two  head  of  a  commune.  Women  continue  to  be 
under-represented  in  the  labour  market,  policy-making  and  politics.  Implementation  of 
existing legislative and policy tools in this field continues to be weak. Coordination between 

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institutions at local and central level needs to be increased substantially. For the moment, the 
network of gender equality officers consists of only 15 persons in municipalities throughout 
Albania. Domestic violence still remains widespread and the protection of women against all 
forms of violence needs to be considerably strengthened in practice. 

There has been some progress in the area of children's rights. The Law on the Protection of 
the  Rights  of  the  Child  was  adopted  in  November  2010.  This  law  establishes  several 
institutional  mechanisms  to  ensure  respect  of  the  rights  of  children  by  the  family,  state  and 
third parties at central and local level. A State Agency for the Protection of the Rights of the 
Child has been established and the members of the National Council for the Protection of the 
Rights  of  the  Child  have  been  appointed.  However,  the  Council  has  yet  to  become 
operational. Child Rights' Units are now established in 9 regions and Child Protection Units in 
28  municipalities  and  communes.  Secondary  legislation  related  to  the  Albanian  Adoption 
Committee has been approved by the Council of Ministers and the pilot project on foster care 
involving  80  children  continues  to  be  implemented.  A  juvenile  justice  strategy  addressing 
neglected  aspects,  such  as  the  protection  of  child  victims  and  witnesses  of  crime,  and 
measures concerning offenders below the age of criminal responsibility, is pending. The State 
Police has started implementing an operational plan on preventing trafficking, maltreatment, 
sexual exploitation and coercion of juveniles to work or beg. It remains to be seen whether its 
implementation will lead to any substantial progress on reducing child labour. Although the 
Law on Protection of the Rights of the Child foresees the protection of children from physical 
and  psychological  violence,  concerns  remain  regarding  the  exertion  of  violence  against 
children, including use of corporal punishment 

Progress  in  the  treatment  of  socially  vulnerable  and/or  persons  with  disabilities  is 
insufficient.  A  working  group  led  by  the  Ministry  of  Labour,  Social  Affairs  and  Equal 
Opportunities  is  preparing  a  law  on  persons  with  disabilities.  The  lack  of  access  to  equal 
rights resulting from the differentiated status for certain groups still persists. Individuals with 
mental disabilities still do not have an official status. Implementation of the national strategy 
on  persons  with  disabilities  continues  to  be  inadequate  and  employment  quotas  are  not 
enforced. In April 2011, a group of persons with disabilities staged a hunger strike to demand 
better conditions and increased welfare payments.  

Some  limited  progress  has  been  made  regarding  the  implementation  of  anti-discrimination 
policies. The Office of the Commissioner for Protection from Discrimination has carried out 
several  awareness-raising  campaigns  and  training  events.  The  Office  has  been  consulted  on 
draft  legislation.  Its  website  is  operational  and  complaint  forms  have  been  made  available 
online. So far, only eight cases of alleged discrimination have been submitted to the Office, 
with  two  of  them  leading  to  recommendations  from  the  Commissioner.  General  awareness, 
particularly at the local level, of the provisions of the Law on Protection from Discrimination 
among  the  public  and  key  professional  groups  (law  enforcement,  judges,  education  and 
healthcare  workers)  remains  low.  Greater  knowledge  of  the  law  among  citizens  and 
professionals is needed in order to ensure its successful implementation. NGOs working with 
the  lesbian,  gay,  bisexual  and  transgender  (LGBT)  community  in  Albania  have  been 
strengthened in the past year. In July 2010, the Ministry of Labour, Social Affairs and Equal 
Opportunities organised a public event on the protection of human rights of LGBT persons in 
Albania.  However,  the  increased  visibility  of  the  community  has  not  led  to  any  substantial 
improvement  in  overall  acceptance  of  LGBT  persons  and  they  continue  to  suffer  from 
discrimination  and  marginalisation.  Several  cases  of  violence  and  ill-treatment  targeting  the 
transgender  community  have  been  reported.  Homophobia  remains  widespread,  including  on 
the part of public service professionals.  

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Labour and trade union rights have generally been respected and some progress has been 
made  towards  encouraging  sectoral  and  bipartite  social  dialogue.  The  operation  of  the 
National  Labour  Council  has  improved  but  membership  criteria  remain  unclear.  A  new 
umbrella  organisation  for  employers  has  been  registered.  However,  collective  bargaining  at 
the private sector level has not been developed.  

Property  rights  remain  an  issue  of  great  concern.  There  has  been  little  visible  progress  in 
developing  a  comprehensive  strategy  for  property  reform,  which  is  a  key  priority  of  the 
Opinion,  or  for  reforming  the  relevant  legal  and  institutional  framework.  The  coordination 
structure in the Ministry of Justice has not yet been established. Despite the progress made, 
the process of initial registration of immovable property has not yet been completed.  

In  order  to  integrate  the  electronic  databases  for  land  and  property,  the  Government  has 
committed  to  establish  the  Register  of  Territory.  However,  specific  technical  measures  and 
legal instructions have yet to be put in place. Overall, the land and property databases remain 
isolated in the Immovable Property Registration Office and there is no coordination with the 
databases of other public institutions. 

Other  issues  such  as  the  property  tax  (a  commitment  of  the  National  Strategy  for 
Development and Integration) and legal clarifications in order to distinguish between property 
and  development  rights  are  not  addressed.  As  a  result,  land  market  regulation  and  balanced 
land development have not made any significant progress.  

Unresolved claims by former owners for compensation and restitution of property confiscated 
during  the  communist  regime  persist.  Some  measures  have  been  taken  by  the  Property 
Restitution  and  Compensation  Agency  (PRCA)  following  its  restructuring.  The  rules  of  the 
special  fund  for  compensation  of  properties  have  been  improved  and  its  financial  resources 
increased. An initiative to revise the evaluation methodology and value map for the territory 
of the country is in the inception phase. The PRCA earmarked € 7.3 million for compensation 
of  1012  ex-owners.  The  Government  has  not  communicated  a  timetable  for  enforcement  of 
ECtHR judgements regarding property rights.  

Respect for and Protection of Minorities, Cultural Rights 

There  has  been  very  limited  progress  in  the  field  of  protection  of  minorities.  Albania 
submitted  its  third  country  report  on  implementation  of  the  Framework  Convention  for  the 
Protection  of  National  Minorities  to  the  Council  of  Europe  in  January  2011.  In  May  2011, 
Albania changed the format of its civil status certificates; these no longer include the notion of 
"nationality"  or  ethnicity  of  individuals,  but  only  their  citizenship.  Some  minority 
representatives  expressed  concern  over  this  initiative.  No  progress  has  been  made  towards 
strengthening  the  capacity  of  the  State  Committee  for  Minorities.  No  measures  have  been 
taken  towards  re-evaluating  the  distinction  between  national  and  ethno-linguistic  minorities. 
Albania  has  still  not  adopted  the  European  Charter  for  regional  and  minority  languages. 
Although inter-ethnic relations remain good overall, there has been some deterioration in the 
climate  for  minorities,  particularly  in  the  context  of  preparations  for  the  population  census. 
After a first trial and sentencing, the case of the death of a Greek-speaking Albanian citizen in 
Himara  in  2010  is  now  on  appeal.  The  population  and  housing  census,  initially  due  to  take 
place  in  April  2011,  was  postponed  to  October  2011.  Albania  decided  to  include  optional 
questions on ethnic origin and religious affiliation in the census questionnaire. The collection 
of such data could serve to develop appropriate policies towards minorities based on updated 

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statistics.  Respect  for  international  standards,  including  the  principle  of  free  self-
identification, is of crucial importance.  

As  regards  the  Roma,  a  quota  for  Roma  and  Egyptian  students  taking  up  bachelor  and 
master's studies established in the academic year 2010-2011 has been implemented. Another 
measure  aimed  at  increasing  attendance  of  Roma  children  in  compulsory  school  education 
was  the  free  distribution  of  textbooks;  however,  its  implementation  has  not  come  up  to 
expectations due to flaws in the system of reimbursement. The level of pre-school enrolment 
among  Roma  children  continues  to  be  lower  than  in  the  rest  of  the  population.  Preparatory 
classes  for  five  year  old  children  who  have  not  attended  kindergarten  are  being  developed. 
The  Roma  Technical  Secretariat  has  made  efforts  to  assess  progress  in  implementation  of 
policies through preparation of monitoring reports. 

However, implementation of the Strategy on improving Roma living conditions continues to 
be slow, due to inadequate resources and insufficient coordination of institutions involved at 
local and central level. Local level action plans for implementing the strategy have not been 
developed and responsibilities have not been clearly devolved. Despite an effort by the Roma 
Technical  Secretariat  to  strengthen  the  functioning  of  the  regional  committees  on  planning 
and evaluation of social needs by including the National Action Plan for Roma Decade into 
their agenda, there continues to be a general lack of awareness at local level. There have been 
no  specific  budgetary  allocations  for  the  provision  of  critical  social  services  for  Roma  and 
there is excessive reliance on civil society and international donors in this field. The resources 
of  the  Roma  Technical  Secretariat  at  the  Ministry  of  Labour,  Social  Affairs  and  Equal 
Opportunities  have  not  been  increased.  Although  registration  campaigns  and  awareness 
raising activities have been held, a number of Roma still lack official registration. The Roma 
still  face  very  difficult  living  conditions  and  frequent  discrimination,  particularly  regarding 
access  to  education,  social  protection,  health,  employment  and  adequate  housing.  Serious 
concerns arose over the forcible removal of around 45 Roma families by citizens from their 
settlement  near  Tirana  train  station  in  February  2011.  The  families  affected  have  been 
provided  with  alternative  but  somewhat  inadequate  temporary  accommodation  by  the 
authorities  in  the  form  of  tents  in  a  remote  area of the city. They have  been  assisted  by  the 
international  community  and  non-governmental  organisations,  particularly  as  regards  the 
judicial  follow-up  of  the  case  in  which  two  persons  were  sentenced  for  destroying  the 
settlements, but not for the physical and psychological injury to the victims. 

Overall, progress in the field of human rights and respect for and protection of minorities has 
been  uneven.  Property  rights  remain  an  issue  of  serious  concern.  There  has  been  little 
progress towards the adoption and implementation of a coherent property reform strategy and 
action plan. This is a key priority of the Opinion and is vitally important for the consolidation 
of  property  rights.  The  fragmentation  of  responsibilities  and  lack  of  coordination  between 
institutions  hampers  effective  implementation  of  policy  and  creates  legal  uncertainty  and  a 
systemic risk of corruption.  

There has been partial progress on addressing the key priority on reinforcing the protection of 
human  rights  and  the  effective  implementation  of  anti-discrimination  policies.  There  have 
been important developments in this area, in particular the adoption of the Law on Protection 
of the Rights of the Child, the adoption of the new National Strategy on Gender Equality and 
the Fight against Domestic Violence, and the start of implementation of the Law on Protection 
from Discrimination. However, some important legislative gaps remain, including as regards 
persons  with  disabilities,  and  implementation  of  existing  legislative  and  policy  tools  in  this 
field  is  still  inadequate.  General  awareness  of  the  anti-discrimination  legislation  and  the 

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complaints mechanism needs to be increased. Concerns remain over continued discrimination 
against  certain  vulnerable  groups,  such  as  LGBT  persons  and  Roma.  Implementation  of 
policy  tools  targeting  the  Roma  minority  and  access  of  this  community  to  social  protection 
and services is still insufficient, leading to persistent marginalisation.  

Some progress has been made towards addressing the key priority on improving the treatment 
of detainees and application of recommendations of the Ombudsman in this field. Measures 
have  been  taken  to  improve  conditions  of  detention  and  systematise  the  follow-up  of  the 
Ombudsman's  recommendations  by  the  Ministry  of  Justice.  However,  cases  of  ill-treatment 
are still being reported, particularly during arrest and police custody, and conditions in some 
places  of  detention  remain  poor.  Furthermore,  the  treatment  of  mentally  ill  offenders  still 
needs to be improved and the lack of a permanent appropriate solution for the placement of 
those under obligatory treatment remains a serious concern. 

2.3. 

Regional issues and international obligations 

The  Council  of  Europe  (CoE)  has  continued  monitoring  the  extent  to  which  Albania  is 
fulfilling  its  membership  obligations  and  has  closely  followed  developments  relating  to  the 
political  situation  in  the  country  through  its  specialised  CoE  bodies  and  via  a  permanent 
external  office  headed  by  a  special  representative  of  the  Secretary  General  in  Tirana  which 
was opened at the beginning of 2011. 

Albania  has undertaken  to  cooperate  fully  with  EULEX  for a  complete  investigation  of  the 
allegations  raised  in  the  resolution  adopted  by  the  Parliamentary  Assembly  of  the  CoE  on 
inhuman treatment of people and illicit trafficking in human organs in Kosovo, while at the 
same  time  rejecting  the  allegations.  Continuous  smooth  cooperation  by  Albania,  notably  on 
the facilitation of requests for international legal assistance on its territory, is important. 

Albania  has  aligned  with  the  Council  Decision  advancing  universal  support  for  the 
International Criminal Court and promoting the widest possible participation in it5. However, 
it  still  maintains  the  2003  bilateral  immunity  agreement  with  the  United  States,  granting 
exemptions from the jurisdiction of the International Criminal Court. This does not comply 
with  the  EU  Common  Position  on  the  integrity  of  the  Rome  Statute  or  with  the  related  EU 
guiding  principles  on  bilateral  immunity  agreements.  Albania  needs  to  align  with  the  EU 
position.  

Regional  cooperation  and  good  neighbourly  relations  form  an  essential  part  of  Albania's 
process  of  moving  towards  the  European  Union.  Albania  continued  to  take  part  actively  in 
regional  initiatives,  including  the  South  East  European  Cooperation  Process  (SEECP),  the 
Regional Cooperation Council (RCC), the Central European Free Trade Agreement (CEFTA), 
the Energy Community Treaty and the European Common Aviation Area Agreement. Within 
the framework of  the SEECP,  Albania endorsed in March the  Regional Strategic Document 
and  Action  Plan  on  Justice  and  Home  Affairs  2011-2013.  Albania  held  the  Presidency  of 
MARRI  (the  Migration,  Asylum,  Refugees  Regional  Initiative)  until  May  2011.  In  this 
context,  it  supported  the  proposal to  create  a  visa-free  zone  between  the  participating  states 
that would allow citizens to travel with biometric ID cards only. Albania has completed the 
process of establishing visa-free regimes with all the countries of the region. 

5 

Council Decision 2011/168/CFSP of 29 March 2011. 

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Albania  is  a  constructive  partner  in  the  region  and  has  continued  to  develop  bilateral 
relations with neighbouring and other enlargement countries.  

Relations with Bosnia and Herzegovina have remained good. The implementation of existing 
bilateral agreements and protocols has continued to proceed smoothly. Albania continued its 
good  relations  with  the  former  Yugoslav  Republic  of  Macedonia.  An  agreement  for  the  full 
liberalisation  of  bilateral  and  transit  transportation  between  the  two  countries  was  signed. 
Albania  continues  to  have  good  relations  with  Croatia  and  Montenegro.  Cooperation  with 
Montenegro  focused  on  economic  and  trade  relations.  Albania  has  stepped  up  its  dialogue 
with Serbia. Albania's very good relations with Kosovo were maintained. 

Relations  with  neighbouring  EU  Member  States  Greece  and  Italy  remain  very  good.  In 
February  2011,  Albania  and  Italy  signed  an  agreement  on  representing  and  protecting  each 
other's interests in those countries where one of the parties lacks diplomatic representation. 

Albania's  relations  with  Turkey  remain  good.  Turkey  provided  humanitarian  assistance  to 
Albania following the floods which affected the country in December 2010. 

Overall,  Albania  continued  to  generally  satisfy  the  Stabilisation  and  Association  Process 
conditions  and  to  contribute  to  regional  stability  by  fostering  positive  relations  with 
neighbours and regional partners. 

3. 

ECONOMIC CRITERIA 

In examining economic developments in Albania, the Commission's approach was guided by 
the  conclusions  of  the  European  Council  in  Copenhagen  in  June  1993,  which  stated  that 
membership  of  the  Union  requires  the  existence  of  a  functioning  market  economy  and  the 
capacity to cope with competitive pressure and market forces within the Union. 

3.1. 

The existence of a functioning market economy 

Economic policy essentials 

In  February  2011,  Albania  submitted  its  fifth  Economic  and  Fiscal  Programme  (EFP) 
covering  the  period  2011-2013.  The  key  objectives  remained  unchanged  from  the  previous 
EFP and economic policy continued to be directed towards ensuring macroeconomic stability 
accompanied by expenditure-led budgetary consolidation. Progress on structural reforms was 
limited.  In  the  context  of  the  still-difficult  economic  situation  of  Albania's  trading  partners, 
the  economic  growth  projected  in  the  programme  is  on  the  optimistic  side.  Despite  a  more 
polarised  political  landscape,  there  was  broad  agreement  on  the  key  essentials  of  a  market 
economy.  Overall,  consensus  on  the  fundamentals  of  a  market-oriented  economy  has  been 
maintained.  

Macroeconomic stability 

Economic activity posted strong growth of some 3.8% in 2010, according to provisional data. 
GDP growth in 2010 was mainly driven by foreign demand as exports of goods rose by 63%, 
spurred mostly by exports of electricity due to a rebound in energy prices combined with full-
capacity  production  from  local  hydropower  generation,  while  domestic  demand  remained 
weak.  Private  consumption  growth  decelerated  to  2.2%,  weighed  down  by  weak  consumer 
confidence,  loose  labour  market  conditions,  a  decline  in  workers'  remittances  and  sluggish 

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household credit. Gross fixed capital formation contracted by 5.2%, reflecting the substantial 
cuts  in  public  spending  as  part  of  the  government's  fiscal  consolidation  efforts.  Provisional 
data show that economic activity continued to expand during the first half of 2011. Real GDP 
grew by 3.4% year-on-year in the first quarter with construction breaking its long contraction 
period  and  recording  positive  growth  of  4.8%  year-on-year,  while  growth  moderated  in 
industry and services that had recorded a swift recovery in 2010. Per capita GDP in terms of 
purchasing  power  parity  was  estimated  at  27.1%  of  the  EU-27  average  in  2009,  up  from 
25.9% in 2008. Overall, the Albanian economy continued to grow, albeit below the previous 
high rates.  

The current account deficit declined to 11.9% of GDP in 2010, from 15.1% in 2009, reflecting 
an improvement in all the components of the current account, most notably a strong recovery 
in  exports  of  goods.  The  still  large  trade  deficit  narrowed  to  23.4%  of  GDP  in  2010,  from 
26.4%  in  2009,  in  the  wake  of  an  across-the-board  rise  in  exports.  Strong  increases  were 
recorded  in  2010  in  energy  exports,  as  the  local  hydropower  generation  operated  at  full 
capacity,  followed  by  mining  and  construction  materials.  Albanian  exports  continued  to 
depend heavily on the textile and footwear industries, which account for 34% of total exports, 
although  their  share  is  declining.  Exports  of  mining  products  grew  substantially  in  2010  as 
new  fields  came  into  operation  and  global  commodity  prices  recovered.  Remittances  were 
down by around 11.7% in 2010, to 7.8% of GDP, as result from weak international economic 
conditions in host countries. The current account deficit deteriorated in the first half of 2011, 
as  the  trade  deficit  widened  due  to  the  slowing  down  of  energy  exports  and  a  10%  fall  in 
workers' remittances.  

During  2010,  FDI  inflows  increased  by  17.2%,  primarily  reflecting  new  investment  in 
exploration and drilling for oil and gas and new concessions in the energy sector. Net FDI in 
the first quarter of 2011 was around one-third that registered in the corresponding period of 
2010.  Although  FDI  inflows  increased  year-on-year,  a  significant  amount  of  foreign  capital 
was  repatriated  resulting  in  a  sharp  drop  in  net  FDI.  Portfolio  investment  also  increased, 
thanks  to  the  €300  million  Eurobond  issue  by  the  government.  Capital  inflows  declined  by 
some  11%.  Overall,  the  balance  of  payments  posted  a  surplus  in  2010  which  led  to  a 
corresponding rise in reserves of some €179 million. Albania preserved a sufficient level of 
international  reserves  at  around  4.8  months  of  imports.  Overall,  despite  an  improvement  in 
2010,  further  reducing  the  current  account  deficit  remains  challenging,  especially  if  the 
decline in workers' remittances persists.  

Unemployment in Albania was high at 13.7% in 2010, the same as a year earlier. Private non-
agriculture  employment  increased  gradually  during  the  year,  while  agriculture  employment 
rose  in  the  third  quarter.  Labour  market  conditions  improved  somewhat  in  the  first  half  of 
2011.  Employment  grew  by  2.2%  and  2.7%  in  the  first  and  second  quarters,  respectively, 
mostly reflecting an increase in private non-agriculture sector jobs. Unemployment in the first 
quarter  decreased  to  13.5%  and  further  to  13.3%  in  the  second  trimester.  Labour  market 
statistics  continue  to  be  weak  and  are  distorted  by  a  large  informal  sector.  Overall, 
unemployment remains high. 

The annual average inflation rate rose to 3.6% in 2010 from 2.3% in 2009, remaining within 
the  Bank  of  Albania's  (BoA)  target  range  of  2-4%.  The  main  contributors  to  inflation  were 
international  food  and  fuel  prices  along  with  higher  administrated  prices  for  water  and 
electricity. Inflation accelerated to 4% in the first quarter of 2011 reaching a peak of 4.2% in 
May, before receding to 3.1% in August. The rise in inflation in the first quarter of 2011 was 
primarily driven by higher prices for food and, to a lesser extent, fuel, due to developments in 

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the international commodity markets as well as increases in indirect taxes in 2011 (VAT on 
medicines and excise taxes). In response to rising inflationary pressures, the Bank of Albania 
raised the key repo rate from 5% to 5.25% in March.  

The  level  of  euroisation  in  Albania  remains  high.  Foreign-denominated  loans  and  deposits 
account for 67% and 47% of total stock, respectively. Although necessary for the currency's 
stability, such high euroisation constrains the room for manoeuvre in monetary policy and can 
be  a  source  of  instability  in  the  financial  system  since  it  may  expose  banks  to  currency 
mismatches or indirect credit risks. 

Albania continued to pursue a free-floating foreign exchange regime. The lek depreciated by 
4.3%  against  the  euro  in  2010  and  by  a  further  2.7%  in  August  2011.  Overall,  monetary 
policy remained sound, maintaining price stability while inflation remained within the target 
range. 

During  2010,  further  progress  was  made  in  improving  the  tax  administration  in  the  form  of 
both  general  revenue  collection  and  administrative  reforms.  Electronic  declaration  has  been 
made mandatory for VAT taxpayers, while the relevant legislation allows large taxpayers to 
file  tax  returns  online.  In  2011,  various  measures  have  been  taken  to  broaden  the  tax  base, 
including  introduction  of  10%  VAT  on  medicines,  a  new  system  of  fiscal  stamps  on  excise 
goods  and  medicines,  the  extension  of  VAT  to  cover  professional  services  and  addition  of 
more  products  subject  to  excise  tax.  In  addition,  the  government  declared  a  fiscal  amnesty 
which  aims  to  legalise  undeclared  assets  and  income.  Despite  these  efforts,  gaps  remain  in 
both revenue collection and administrative reform. A fully-fledged tax compliance system is 
still  lacking,  law  enforcement  continues  to  be  weak,  while  the  revenue  collection  at  local 
government level remains weak.  

The  upward  trend  in  the  fiscal  imbalance  in  recent  years  was  reversed  in  2010,  with  the 
budget deficit falling to 3% of GDP from 7%, a year earlier. This improvement in the budget 
balance  was  primarily  expenditure-led.  Total  expenditure  stood  at  29.6%  of  GDP,  or  3.4 
percentage  points  less  than  in  2009.  More  than  four-fifths  of  the  reduction  in  expenditure 
resulted from cuts in capital spending (by almost a third from the 2009 levels). Total revenue 
stood  at  26.6%  of  GDP  in  2010,  0.6  percentage  points  higher  than  the  previous  year.  The 
2011 budget envisages a fiscal deficit of 3.5% of GDP, based on assumed real GDP growth of 
5.5%. The projected increase in the fiscal deficit is mainly due to the planned rise in capital 
outlays as the government embarks on a renewed drive to upgrade infrastructure. In the period 
January-July 2011, total government revenue increased by 2.3%, while total expenditure rose 
by almost 6% compared to the same period of the previous year. Tax revenues for this period 
were  lower  than  planned,  reflecting  over-optimistic  projections.  Moreover,  tax  receipts 
underperformed  primarily  as  a  result  of  weak  indirect  tax  revenue  amid  sluggish  domestic 
demand.  The  higher  government  expenditure  was  driven  mainly  by  an  increase  in  current 
expenditure,  specifically  by  social  security  spending.  The  government  deficit  in  the  period 
January-July  rose  by  a  third  compared  to  the  same  period  of  the  previous  year.  These 
developments  prompted  the  government  to  re-balance  the  budget  in  July  by  cutting 
expenditure  to  a  more  affordable  level  of  revenues,  aiming  to  preserve  the  2011  deficit  at 
3.5%  of  GDP.  Tax  receipts  were  revised  downwards  while  expenditure  was  cut,  mainly  as 
result of lower capital outlays and spending on maintenance. At the same time, an increase in 
public service salaries and pensions was granted in July 2011.  

The  primary  source  of  deficit  financing  in  2010  consisted  of  domestic  borrowing  while, 
contrary to previous years, privatisation receipts were limited. The domestic financing of the 

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fiscal  deficit  affects  the  level  of  interest  rates  for  business  and  consumer  borrowing  and 
diverts  savings  to  the  public  sector.  Albania  also  issued  its  first-ever  Eurobond  on  the 
international markets for €300 million with an inte rest rate of 7.5% and a five-year maturity. 
Most of the proceeds from the Eurobond were used to pay back a syndicated loan, while the 
rest  is  expected  to  finance  public  investment.  In  2010,  the  debt-to-GDP  ratio  stood  at  58%, 
down from 59% the previous year. Albania's relatively high public debt continues to show a 
short-term bias which requires frequent re-financing, although some three fifths of the debt is 
domestic. Still, in the event of an increase in interest rates, the fiscal space would be further 
limited suggesting that, at such high levels, public debt remains a source of macro-financial 
vulnerability.  Overall,  the  fiscal  deficit  has  been  reduced  significantly,  but  pursuing  and 
strengthening  budgetary  consolidation  that  ensures  a  lasting  reduction  of  the  public  debt 
remains a priority. 

Overall,  macroeconomic  stability  has  been  maintained,  as  Albania  weathered  the  lingering 
adverse economic conditions in the region and beyond well. Monetary policy has successfully 
helped  to  keep  inflation  stable.  The  high  level  of  euroisation  continues  to  limit  the 
effectiveness of the monetary transmission channels. The relatively high public debt restricts 
fiscal  space  and  remains  a  source  of  vulnerability,  underlining  the  importance  of  pursuing 
budgetary consolidation. 

Interplay of market forces 

The  private  sector  contributes  80%  of  GDP  and  around  82%  of  employment.  State 
participation  in  the  economy  remains  low,  but  progress  in  the  planned  privatisation  reform 
stalled in 2010. No progress can be reported with the government's remaining shares in some 
strategic companies. Overall, State involvement in the economy is low. 

Market entry and exit 

Albania has made good progress with facilitating business registration and business licensing 
procedures. The National Licensing Centre has extended its services network to cities beyond 
Tirana. However, the procedures for granting building permits remain lengthy, hampering the 
recovery of the ailing construction sector. The e-signature system to allow online applications 
for  registration  became  operational  in  March  2011.  The  Albanian  Investment  Development 
Agency,  which  serves  as  a  one-stop  shop  for  foreign  investors,  became  operational  in  June 
2011. The Law on foreign direct investment was amended to grant special protection, under 
certain conditions, to foreign investors in the event of land ownership disputes. However, the 
impact  on  foreign  investment  cannot  be  assessed,  as  the  new  legislation  has  not  yet  been 
applied in practice. 

Some  progress  was  achieved  on  bankruptcy  procedures  with  the  establishment  of  the 
Bankruptcy  Supervisory  Agency.  However,  the  Agency  is  not  yet  operational.  Some  130 
bankruptcy declaration requests were submitted during 2010 out of which 75% were analysed 
and  only  6  were  accepted  to  follow  the  bankruptcy  procedure.  Overall,  some  progress  was 
made to facilitate market entry. However, bankruptcy procedures remain slow. 

Legal system 

Although  some  steps  were  taken  on  legalisation  of  properties  and  registration  of  land 
ownership in coastal and urban areas, a comprehensive strategy and action plan to tackle the 
enduring issue of property rights has not been adopted yet. Lack of secure property rights and 

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weak  enforcement  of  the  rule  of  law  remain  causes  for  concern.  Moreover,  the  business 
community continues to face delays in court procedures, and weak enforcement of contracts 
and  execution  of  collateral.  Informal  methods  of  contract  enforcement,  by-passing  the  legal 
system, continued to be widespread. Steps were taken towards establishing the private bailiff 
office,  but  training  and  administrative  capacity  remain  weak.  Moreover,  the  delay  in 
establishing the administrative court due to lack of political consensus remains an obstacle to 
investment. 

Progress was achieved in the area of regulatory reform and on strengthening the institutions 
that oversee it. In 2010, the government adopted a regulatory impact assessment (RIA) system 
with the aim of improving the efficiency and effectiveness of the regulatory decision-making 
process. Phasing-in of a simple version of RIA is scheduled to commence in 2011, after which 
a  decision  will  be  taken  on  whether  to  switch  to  a  full  system  by  2013.  The  new  Law  on 
inspections  was  adopted  in  June  2011  laying  the  foundations  for  restructuring  the 
inspectorates.  Overall,  weaknesses  in  the  rule  of  law  and  widespread  corruption  are 
continuing to have a negative effect on the business environment.  

Financial sector development 

Albania's financial system remains dominated by the banking sector, which accounts for some 
95% of the system's total assets. Despite the banks' dominance, the share of bank lending to 
the private sector and households was low at 38.7% of GDP in 2010, up from 37.5% a year 
earlier, indicating that there is still significant scope for financial intermediation. The banking 
sector remains well-capitalised, with the capital adequacy ratio reaching 15.4% at the end of 
2010  and  falling  slightly  to  14.8%  in  the  second  quarter  of  2011,  well  above  the  legal 
minimum of 12% set by the BoA. The profitability of the banking sector was positive during 
2010, but profitability indicators deteriorated in the first half of 2011. While provisions have 
been  adjusted  accordingly,  the  level  of  non-performing  loans  (NPLs)  remains  a  concern  for 
the banking sector. The ratio of NPLs was estimated at 13.6% of total loans at the end of 2010 
and rose sizeably to 16.6% in the second quarter of 2011. 

The concerns over the worsening quality of the loan portfolio and subdued domestic demand 
kept banks from expanding lending. Credit growth slowed to 8.6% in 2010, down from 20.5% 
a year earlier. The private sector's loan portfolio grew at a more appropriate 10.6% in 2010 
and  was  mostly  directed  to  businesses,  whilst  household  loans  remained  almost  unchanged 
from 2009. Lending growth increased slightly in the first half of 2011 and stood at 12.5% in 
July.  The  interest  rates  charged  by  commercial  banks  on  business  and  consumer  loans 
continued  to  be  driven  by  the  interest  paid  on  government  securities.  Following  sharp 
withdrawals  in  2009,  deposit  growth  resumed  during  2010,  averaging  15.5%  for  the  whole 
year  as  public  confidence  in  the  banking  system  was  gradually  restored,  especially  in  the 
second  half  of  the  year.  In  the  first  half  of  2011,  deposit  growth  stood  at  approximately 
15.8%, year-on-year. External borrowing by the banking sector reached 4.9% by the end of 
2010 and rose to 6.4% by July 2011. The average yield of 12-month Treasury bills stood at 
7.2%  at  the  end  of  2010,  down  from  9.2%  a  year  before,  and  increased  to  7.7%  by  August 
2011. 

The Bank of Albania's periodic stress tests show that the direct exchange rate risk made some 
moderate impact due to the low open foreign-exchange position of the banking sector. With 
respect to liquidity risks, the banking sector appears to have a very good liquidity situation for 
operations in the national currency, whereas operations in euro call for constant monitoring. 

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Overall,  the  banking  sector  remains  well-capitalised  and  liquid.  However,  the  high  level  of 
non-performing loans is a cause for concern.  

3.2. 

The  capacity  to  cope  with  competitive  pressure  and  market  forces  within  the 
Union 

Existence of a functioning market economy 

Macroeconomic  stability  was  maintained.  GDP  growth  accelerated,  but  remained  below 
historical averages. Inflation expectations remained anchored and the government deficit was 
brought  down.  However,  public  debt  remains  relatively  high.  The  planned  privatisation 
programme  was  delayed,  the  pace  of  reforms  to facilitate  market  entry  and  exit  slowed  and 
weaknesses  in  the  rule  of  law,  particularly  in  contract  enforcement  and  property  rights, 
persist.  Structural  imbalances  in  the  labour  market  and  the  external  account  remain  high. 
Overall,  although  some  progress  was  made  in  establishing  a  functioning  market  economy, 
Albania  needs  to  commit  itself  to  further  structural  reforms,  amongst  other  things  by 
bolstering economic policy governance, enhancing labour market performance and protecting 
property rights. 

Human and physical capital 

During  2010,  the  budget  expenditure  on  education  was  estimated  at  roughly  3.4%  of  GDP. 
The budgetary allocation for 2011 is projected at 3% of GDP. Spending on education during 
2011 will aim to improve the overall quality of service delivery at all levels of education and 
training with a particular focus on information technology and better matching of vocational 
education  with  market  demand.  Public  spending  on  research  and  development  accounts  for 
0.05% of GDP in the 2011 budget. Despite the government's efforts to consider education and 
health  among  its  priority  sectors,  shortages  of  qualified  employees  persist,  as  a  result  of 
deficiencies  in  the  education  and  skills  system.  ICT  was  added  to  the  curricula  for  17 
vocational  education  and  training  schools.  Some  progress  was  achieved  by  the  National 
Employment Service in improving the information system  on job  vacancies. The  brain gain 
instrument which granted bonuses to public officials graduated abroad was suspended due to 
budget cuts in July 2011. 

Investment stood at 36.8% of GDP in 2009, slightly lower than the 38.2% in 2008. Expressed 
as a percentage of GDP, private-sector investment reached 27.2%. FDI inflows are estimated 
to  have  increased  by  about  17%  in  2010,  to  an  estimated  8.8%  of  GDP,  reflecting  higher 
investment,  mostly  in  the  hydrocarbons  sector.  Public  investment  was  directed  primarily  at 
road infrastructure. Construction of a new stretch of road between Tirana and Elbasan started 
at an estimated cost of about €270 million, finan ced mainly by soft loans from international 
financial  institutions  (IFIs).  Rail  transport  remains  underdeveloped.  Further  investment  in 
improving  the  infrastructure  and  logistics  will  be  needed  in  order  to  attract  investors  and 
stimulate tourism. Insufficient road maintenance and illegal construction along roads remain 
causes for concern. In the energy sector, a number of concession agreements for construction 
and  operation  of  hydroelectricity  generation  plants  were  approved,  and  ddistribution  losses 
have been slightly reduced overall. However, bill collection rates remain low at around 77%. 
Overall, spending on human and physical capital has increased. However, further investment 
will need to be committed to improve the competitiveness of the economy. 

Sectoral and enterprise structure 

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The relative shares of agriculture, industry and services remained broadly unchanged in 2010 
from  previous  years,  with  slightly  less  than  three  fifths  of  Albania's  GDP  generated  by  the 
services  sector.  Agriculture  accounted  for  some  19%  of  output,  but  remains  the  largest 
employer  with  55%  of  total  employment  in  the  second  quarter  of  2011.  The  share  of 
construction fell to 11% in 2010 from 14.4% in 2009, while industry's share increased to 11% 
in 2010 from 9.5% a year earlier. Inward processing performed well during 2010 increasing 
its exports as compared with 2009. 

Weak  tax  and  expenditure  policies  and  poor  law  enforcement,  including  the  fight  against 
corruption, have been fuelling a sizeable informal sector. Some steps were taken during the 
year to address informality, amongst other things by requiring large taxpayers to declare taxes 
online and proceeding with installing cash registers. However, since only around half of the 
companies have installed the devices, the take-up rate remains low. SMEs continue to obtain 
financing  from  a  credit  support  scheme  financed  by  the  Italian  government.  By  December 
2010,  49  businesses  had  benefited  from  approximately  €11  million  under  the  scheme.  An 
agreement signed in April 2011 between the Albanian government and six commercial banks 
will  facilitate  access  to  a  €2.5  million  credit  guarantee  scheme  for  businesses.  Since 
November 2010, five new additional micro-credit institutions have been included in the credit 
registry.  

Concerning  network  industries,  the  high  rate  of  losses  in  the  electricity  distribution  system 
remains a persistent challenge to electricity supply. The second third-generation (3G) licence 
in  the  telecommunications  sector  was  sold  in  September  2011.  The  fourth  mobile 
telecommunications  company  started  operating  during  2010.  Prices  in  this  sector  are  set  by 
the regulatory body and a revised tariff reduction scheme entered into force in March 2011, 
aiming to regulate the market price. Overall, there were no major changes in the structure of 
the  economy.  While  some  measures  were  taken  to  combat  the  sizeable  informal  sector, 
informality remains a challenge. 

State influence on competitiveness 

Subsidies in 2010 are estimated to have declined to 0.3% of GDP from 0.4% in 2009. While 
there  is  no  specific  financial  assistance  for  companies,  subsidies  are  granted  to  a  limited 
number of sectors, namely railways and water supply. State aid granted to the energy sector 
has declined since 2009. Overall, State intervention remains limited. 

Economic integration with the EU 

The  openness  of  the  Albanian  economy  continued  to  increase.  The  sum  of  imports  and 
exports of goods and services stood at slightly more than 86% of GDP in 2010, up from 82% 
in 2009. Total foreign trade in goods and services rose by 12% in 2010 compared with 1.5% 
in  2009.  Both  imports  (7%)  and  exports  (21%)  of  goods  and  services  grew  at  a  faster  pace 
than in 2009. The EU remains Albania's leading trading partner accounting for around three-
quarters  of  both  exports  and  imports  in  2010,  with  the  combined  share  of  Italy  and  Greece 
amounting to 70% of total merchandise trade by volume. Overall, the EU remained Albania's 
leading  trading  and  investment  partner  in  2010.  Trade  with  CEFTA  countries  increased. 
However,  Albania's  production  base  is  concentrated  around  just  a  few  low  value-added 
sectors and export markets, leaving the economy vulnerable to specific shocks. 

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4. 

ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP 

This section examines Albania's ability to assume the obligations of membership – that is, the 
acquis as expressed in the Treaties, the secondary legislation and the policies of the Union. It 
also  analyses  Albania's  administrative  capacity  to  implement  the  acquis.  The  analysis  is 
structured  according  to  the  list  of  33  acquis  chapters.  In  each  sector,  the  Commission's 
assessment  covers  the  progress  achieved  during  the  reporting  period,  and  summarises  the 
country's overall level of preparedness. 

4.1. 

Chapter 1: Free movement of goods 

There are no further developments to report as regards general principles.  

As  regards  horizontal  measures,  there  were  positive  developments  in  the  legislative 
framework on accreditation and standardisation.  

The General Directorate of Standardisation (GDS) continued its preparations to apply for full 
membership  of  the  European  Committee  for  Standardization  (CEN)  and  of  the  European 
Committee  for  Electrotechnical  Standardization  (CENELEC)  in  2012.  The  adoption  of 
European standards (ENs) as Albanian standards continued to make progress. The number of 
ENs  adopted  is  17,442,  in  line  with  the  adoption  rate  of  95%  set  for  2011.  However,  the 
number  of  standards  translated  remains  low  in  comparison  to  the  number  of  standards 
adopted, since most ENs have been adopted by the cover page method.  

The  law  on  standardisation  was  amended  in  February  2011  to  include  the  possibility  of 
adopting and publishing standards prepared by the European Telecommunications Standards 
Institute  (ETSI).  The  managing  board  of  standardisation  was  established  and  became  fully 
operational in November 2010. Since then it has held two meetings and has taken decisions, 
including on its internal rules and work plan, as well as on the organisation and functioning of 
the National Forum on Standardisation.  

There  were  no  legislative  developments  in  the  area  of  conformity  assessment.  The  law  on 
general  product  safety,  essential  requirements  and  conformity  assessment  of  non  food 
products  is  not  yet  fully  in  line  with  the  acquis.  The  use  of  the  CE  marking,  especially  in 
cases where third party conformity assessment is needed, is not in line with the acquis.  

On accreditation, three new conformity assessment bodies (CABs) were accredited. In total 
there  are  16  CABs  accredited  by  the  General  Directorate  of  Accreditation  (GDA).  The 
documentation  of  the  GDA  concerning  the  quality  management  system  was  revised  to  take 
the  findings  of  the  2010  pre-peer  evaluation  of  the  European  co-operation  of  Accreditation 
(EA) into account. The Advisory Board for Accreditation has started to function on a regular 
basis. During 2010 the GDA supported the organization of proficiency testing in the field of 
construction  products,  as  testing  laboratories  in  this  field  make  up  the  largest  number  of 
accredited  laboratories.  Two  new  technical  committees  were  established:  the  laboratory 
technical  committee  and  the  inspection  and  certification  committee.  However,  there  was  no 
progress in aligning the current law on accreditation with the 2008 horizontal acquis.  

A regional metrology centre became operational in Lezha during the second half of 2010 but 
the National Centre of Metrology in Tirana has not yet been completed. The transposition of 
the  New  Approach  Directives  on  non-automatic  weighing  instruments  and  measuring 
instruments is still pending.  

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There has been some progress as regards market surveillance. Market surveillance activities 
have increased (especially in the area of toys, electrical equipment, textiles and footwear) and 
dangerous products have been withdrawn from the market. Following the entry into force in 
July  2011  of  the  new  law  on  the  General  Inspectorate,  a  reform  of  the  inspectorates  is 
ongoing,  in  order  to  achieve  a  more  efficient  market  surveillance  structure.  However,  the 
present legislation does not fully incorporate the requirements of the horizontal acquis. 

There  was  progress  in  the  area  covered  by  the  'Old  Approach'  product  legislation.  The 
March 2011 law on fertilisers partly transposes the acquis. Legislation on pharmaco-vigilance 
and  good  manufacturing  practice  in  the  field  of  pharmaceuticals  was  adopted  in  November 
2010  and  January  2011  respectively.  Secondary  legislation  aimed  at  approximation  in  the 
fields of motor vehicles was approved in June 2011. Albania adopted legislation on accession 
to the UNECE Conventions of 1958 and 1998 on Vehicle Regulations.  

There has been limited progress on legislative approximation to the acquis in the area covered 
by the 'New and Global Approach' product legislation. Technical regulations on cableway 
installations designed to carry persons, on radio equipment and telecommunications terminal 
equipment were approved and the law on the civil use of explosive materials was revised.  

In  the  area  of  procedural  measures,  there  is  no  progress  to  report  in  alignment  with  the 
acquis of legislation on the return of cultural objects and on civil firearms.  

Conclusion 

There  has  been  progress  in  the  area  of  free  movement  of  goods,  particularly  with  regard  to 
adopting  EN  standards  as  Albanian  standards  and  in  establishing  the  managing  board  of 
standardisation. Further efforts are needed in order to harmonise Albanian legislation with the 
New  and  Old  Approach  directives,  as  well  as  to  align  the  horizontal  legislation  with  the 
acquis and to build up an adequate market surveillance infrastructure. Overall, preparations in 
this area are moderately advanced. 

4.2. 

Chapter 2: Freedom of movement for workers 

There has been no progress as regards access to the labour market. The Law on Foreigners 
has  not  yet  been  amended  as  planned  for  2011,  to  give  priority  to  EU  citizens  as  regards 
demand on the labour market. Albanian legislation in this field is not in line with the acquis.  

There has been no progress as regards preparations for participation in the EURES (European 
Employment Services) network. 

There  has  been  limited  progress  as  regards  coordination  of  social  security  systems.  A 
bilateral  agreement  on  social  security  is  still  being  implemented  with  Turkey  and  there  are 
negotiations for further agreements with Hungary, Belgium and the former Yugoslav Republic 
of  Macedonia. Albania  has  improved  the  management  of  the  social  insurance  system.  The 
database of pensions and a database of contributions for self-employed persons in agriculture 
and voluntarily insured persons have been established, as well as electronic administration of 
monthly pay-roll of contributions and personal accounts of contributors, a database of urban 
contributors  and  a  database  for  the  periods  during  which  persons  who  had  worked  in  the 
former agricultural cooperatives were insured.  

The  Health  Insurance  Institute  has  not  yet  planned  a  strategy  to  prepare  for  introducing  the 
European Health Insurance Card upon accession.  

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Conclusion 

There is little progress to report in the area of freedom of movement for workers. Some efforts 
have  been  made  as  regards  coordination  of  social  security  systems.  However, Albania  still 
needs to amend its legislation with regard to access to the labour market. Preparations have 
not  yet  started  with  regard  to  EURES  and  the  European  Health  Insurance  Card.  Overall, 
preparations in the area of freedom of movement for workers are at an early stage. 

4.3. 

Chapter 3: Right of establishment and freedom to provide services 

Progress  as  regards  the  right  of  establishment  has  been  limited  to  developments  in  the 
simplification  of  registration  and  licensing  procedures.  Albanian  legislation  and  procedures 
are not discriminatory as regards foreign operators or their branches. 

No progress can be reported on the freedom to provide cross-border services. The Minister 
of  Economy,  Trade  and  Energy  has  been  tasked  with  inter-ministerial  coordination  for 
transposition  of  the  Services  Directive.  However,  preparations  are  at  a  preliminary  stage, 
including as regards developing the required institutional capacity. 

There  has  been  some  progress  in  the  field  of  postal  services.  The  Council  of  Ministers 
approved  a  regulation  defining  the  procedures  for  issuing  general  licences,  the  content  of 
these  licences  and  the  conditions  for  amending,  suspending  or  revoking  them.  However,  a 
postal strategy and a decision on the definition of tariffs and weight of reserved services for 
the public postal operator are still pending. The regulatory department for postal services has 
not yet been established in the Electronic and Postal Communications Agency, which is the 
national  regulatory  body,  and  this  hinders  the  effective  separation  of  regulatory  functions 
from policy making in the postal sector.  

There  have  been  some  legislative  developments  in  the  field  of  mutual  recognition  of 
professional  qualifications.  The  government  enacted  administrative  provisions  for  the 
mandatory  state  exams  for  the  acquis-regulated  professions  of  doctor,  dentist,  pharmacist, 
nurse, midwife, veterinarian and architect. The National Examination Agency, established in 
December  2010  and  operating  under  the  supervision  of  the  Ministry  of  Education  and 
Science,  is  responsible  for  organising  and  monitoring  these  exams.  Fully  qualified 
professionals from other countries are exempted from the exams and are eligible to exercise 
their profession in Albania in accordance with the applicable legal framework and under the 
same conditions than Albanian nationals.  

Conclusion 

Albanian legislation and procedures in the field of right of establishment do not discriminate 
against  foreign  operators  or  their  branches.  Rules  facilitating  mutual  recognition  of 
professional qualifications were laid down. However, transposition of the Services Directive, 
including  the  development  of  adequate  administrative  capacity,  is  at  an  early  stage.  Further 
efforts are required in the postal sector to ensure regulatory  capacity, independent of policy 
making.  Overall,  preparations  are  not  very  advanced,  particularly  in  the  area  of  freedom  to 
provide cross-border services. 

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4.4. 

Chapter 4: Free movement of capital 

There was no progress in the field of capital movements. Provisions regulating acquisition of 
real estate by foreigners remained unchanged and uncertainties around real estate ownership 
rights continue to discourage investment.  

The law on foreign investment was amended in order to grant special state protection, under 
certain  conditions,  to  investors  in  the  areas  of  public  infrastructure,  tourism,  energy  and 
agriculture against damage resulting from property ownership claims. However, the impact on 
foreign  investment  cannot  be  assessed,  as  the  new  legislation  has  not  yet  been  applied  in 
practice. 

There was limited progress as regards payment systems. The Bank of Albania (BoA) set up a 
working  group  to  analyse  legislative  approximation  measures,  including  on  provisions  on 
cross-border  payments.  The  BoA  approved  regulations  on  the  functioning  of  the  Albanian 
Interbank  Payment  System  (AIPS)  and  the  Albanian  Electronic  Clearing  House  (AECH) 
aimed  at  promoting  the  use  of  non-cash  payments  by,  inter  alia,  defining  the  bank's 
commissions and increasing clearing sessions for payments. As regards electronic payments, 
the volume of payments that were settled through AIPS increased compared to 2010, although 
the  value  of  transactions  decreased  slightly.  There  was  an  increase  in  both  the  volume  of 
payments and the value of transactions cleared through the AECH. The number of credit and 
debit  cards  in  circulation  continued  to  increase,  reaching  712,575  cards  in  the  first  half  of 
2011, of which 96% are debit cards. However, 95% of card transactions are cash withdrawals, 
which  is  an  indication  that  the  Albanian  economy  is  still  largely  cash  based.  There  is  no 
complaint  system  in  place  for  the  settlement  of  disputes  between  the  customers  and  the 
payment service providers, although there are some mechanisms for out of court arbitration. 
There was no progress as regards the establishment of a Banks Ombudsman as recommended 
by the Competition Authority.  

Some progress can be reported as regards the fight against money laundering. An amended 
law on money laundering, which includes recommendations from MONEYVAL, entered into 
force in April 2011. The new law provides the foundation for improving the ability to detect 
suspicious  bank  transactions.  It  also  addresses  issues  related  to  customer  due  diligence, 
politically  exposed  persons,  wire  transfer  rules,  designated  non  financial  businesses  and 
professions, 'shell' banks and unusual transactions. However, the Penal Code has not yet been 
amended in order to reflect some of the recommendations of MONEYVAL with regard to the 
financing of terrorism and money laundering. The Financial Intelligence Unit has continued to 
strengthen its cooperation with the Prosecutor's Office, the Albanian State Police and the State 
Information  Service.  However,  further  efforts  are  required  in  order  to  enhance  inter-
institutional  cooperation  and  the  analytical  capacity  and  IT  tools  and  the  expertise  of  all 
institutions  involved  combating  money  laundering  and  financial  crime.  Reporting  of 
suspicious  transactions  showed  a  slight  increase  (13%),  but  the  number  of  suspicious 
transactions  reports  submitted  by  the  banking  and  non-banking  sectors  remains  low  and 
further  attention  should  be  paid  to  their  quality.  Prosecution  and  convictions  levels  remain 
low  and  further  efforts  in  the  implementation  of  the  national  strategy  to  fight  money 
laundering and financial crime, including as regards enforcing the existing legal framework, 
are still required. Further efforts are needed in order to improve the national performance on 
anti-money laundering and prevention of terrorism financing by applying the provisions of the 
Council  of  Europe  Convention  on  Laundering,  Search,  Seizure  and  Confiscation  of  the 
Proceeds from Crime and on the Financing of Terrorism. Statistical data on the use of these 
provisions are insufficient. 

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Conclusion 

There was some progress as regards the legislative framework on payment systems and anti-
money laundering. However, effective implementation of the national strategy to fight money 
laundering  and  financial  crime  requires  further  efforts  and  enhanced  inter-institutional 
cooperation.  Overall,  preparations  in  the  area  of  free  movement  of  capital  are  moderately 
advanced. 

4.5. 

Chapter 5: Public procurement 

There was no progress as regards general principles. No further developments took place as 
regards alignment of the system of concessions, defence procurement mechanisms and review 
requirements mechanisms with the EU standards.  

There  was  some  progress  in  the  area  of  the  award  of  public  contracts.  The  award  of 
contracts  for  the  supervision  of  construction  works  financed  with  public  funds  has  been 
brought  under  the  legislative  framework  for  public  procurement.  However,  the  Concessions 
Law does not include provisions relating to works and service concessions and fails to draw a 
clear  distinction  between  concessions  and  other  public  contracts.  Award  procedures  for 
concessions  have  continued  to  be  based  on  unsolicited  proposals.  Provisions  on  the 
determination of abnormally low tenders are not in line with the acquis. This, together with 
the mandatory disclosure of the funding limits available to the contracting authority, restricts 
the scope for competitive award procedures.  

There  was  some  progress  in  the  field  of  remedies.  The  Council  of  Ministers  approved 
decisions on the functioning of the Public Procurement Commission, including on the review 
of appeal procedures and the determination and payment of fees. 

The  Public  Procurement  Agency  (PPA)  has  only  limited  means  to  efficiently  monitor 
compliance  with  public  procurement  legislation.  Secondary  legislation  envisaged  by  the 
public procurement law to  that end has not yet  been adopted and the current staffing of the 
PPA  does  not  allow  it  to  properly  discharge  its  duties.  A  clear  definition  of  the  roles  and 
responsibilities  of  all  institutions  involved  in public  procurement  (PPA,  Public  Procurement 
Commission and Public Procurement Advocate) has yet to be established. The proportion of 
non-competitive and non-transparent procedures remains relatively high. 

Conclusion 

The legislative framework on public procurement and concessions is not fully in line with the 
acquis.  Efforts  are  required  with  regard  to  strengthening  the  institutional  framework  and 
clearly  defining  and  delimiting  the  competencies  of  all  public  procurement  institutions  in 
order to avoid the overlapping of tasks and to remove the remaining loopholes in the system. 
No  comprehensive  system  of  administrative  monitoring  and  control  of  the  application  of 
public procurement rules and contracts has so far been introduced. Overall, preparations in the 
field of public procurement are moderately advanced.  

4.6. 

Chapter 6: Company law 

There has been no progress in the field of company law as regards further aligning Albanian 
legislation  with  the  acquis  on  cross-border  mergers,  on  reporting  and  documentation 

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requirements for mergers and divisions and on minimum subscribed capital requirements for 
public limited companies.  

Progress has been limited as regards implementation of the electronic signature. In February 
2011, Albanian Post received the first e-certificate enabling identification of sender/recipient, 
privacy,  encryption  and  digital  signature.  However,  overall,  the  technical  infrastructure  is 
lacking. A Corporate Governance Code has not yet been adopted.  

Limited progress can be reported in the field of corporate accounting. Transposition of the 
Fourth  and  Seventh  Company  Law  Directives  has  not  yet  been  achieved.  The  staff  of  the 
National  Accounting  Council  (NACA)  received  some  training  and  the  NACA  continued  its 
awareness-raising  campaigns  on  the  implementation  of  auditing  and  International  Financial 
Reporting  Standards.  However,  the  inspection  capacity  of  NACA  remains  insufficient  to 
monitor their implementation. 

There was some progress in the field of auditing. The Public Oversight Board (POB) for the 
audit  profession  approved  the  code  of  ethics  for  audit  professionals  and  its  own  internal 
regulation on quality control of audit of public interest entities. It also approved regulations on 
investigation  and  discipline  and  on  quality  control  for  auditors.  The  Institute  of  Authorised 
Chartered Accountants continues to serve as the technical secretariat of the Board and worked 
on  drafting  some  of  these  regulations.  Further  efforts  are  required  in  order  to  increase  the 
administrative capacities, resources and budget of the POB so as to ensure its independence.  

Conclusion  

There  has  been  little  progress  in  the  area  of  company  law.  The  capacity  of  the  National 
Accounting Council and the operational independence of the Public Oversight Board for the 
audit  profession  remain  weak.  Overall,  preparations  in  the  area  of  company  law  are 
moderately advanced. 

4.7. 

Chapter 7: Intellectual property law 

There  was  no  progress  as  regards  alignment  with  the  acquis  in  the  area  of  copyright  and 
neighbouring rights. The new law on Copyrights is still pending adoption.  

No progress can be reported as regards legislative alignment on industrial property rights. 
No inter-institutional meeting on monitoring the implementation of the National strategy for 
the enforcement of the intellectual and industrial property rights (IPR) has yet been held. 

Progress  with  regard  to  enforcement  has  been  limited.  The  Copyright  Office  carried  out 
awareness-raising  campaigns  through  training  activities  for  its  own  staff  and  for  Collective 
Management Agencies and state authorities including tax and customs administration, police, 
National Council of Radio and Television, the judiciary and prosecution. A Memorandum of 
Understanding  between  the  Directorate  General  of  Customs  and  the  Directorate  General  of 
Patents  and  Trademarks  (GDPT),  aimed  at  strengthening  cooperation,  was  signed  in 
November 2010. The system of acceptance and processing of applications for patents, utility 
models, industrial designs, trademarks and geographical indications is now fully automatic as 
a  result  of  IT  improvements  in  the  GDPT.  Further  efforts  are  required  to  strengthen  the 
capacities of GDPT, to secure the IT system and to increase online services. The number of 
staff of the GDPT has remained unchanged.  

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The number of infringement cases brought before the justice system increased, but it is still at 
a very low level. The Copyright Office and the regional offices still have to be restructured 
and strengthened, pending the adoption of the new Copyrights law and the implementation of 
the reform of the inspectorate. The establishment of a market surveillance structure covering 
IPR issues is awaiting the implementation of the new law on the General Inspectorate which 
entered into force in July 2011. Substantial efforts are still needed in order to address major 
weaknesses in the sector, such as insufficient administrative capacity, low level of fines, lack 
of appropriate experience and qualifications among the judiciary, insufficient awareness and 
enforcement  in  general.  Albania  has  not  succeeded  in  meeting  its  SAA  obligations  of 
guaranteeing  by  1  December  2010  a  level  of  protection  of  intellectual,  industrial  and 
commercial property rights similar to the one in the EU, including as regards enforcement.  

Conclusion 

Overall, progress has been limited in the field of intellectual property law and Albania has not 
succeeded in meeting its SAA obligations on time. Substantial efforts are still needed in order 
to address  many remaining shortcomings which are hampering the effective enforcement of 
intellectual and industrial property rights. Preparations are not very far advanced.  

4.8. 

Chapter 8: Competition policy 

There  was  some  progress  in  the  area  of  antitrust,  including  mergers.  The  government 
adopted  regulations  on  Investigation  Procedures,  on  the  functioning  of  the  Albanian 
Competition  Authority  (ACA),  on  Agreements  of  Minor  Importance  ("de  minimis"),  and 
group  exemption  regulations  for  technology  transfer  agreements,  research  and  development 
agreements and specialisation agreements respectively. These regulations are aligned with the 
acquis  in  all  essential  respects.  The  Albanian  Parliament  issued  a  resolution  binding  all 
executive bodies to consult the ACA whenever primary and secondary legislation is drafted. 

There  was  no  progress  as  regards  the  administrative  capacity  of  the  ACA.  Its  staff  of  35 
remains unchanged and efforts are required to strengthen it in line with the tasks assigned to 
the ACA. 

The  ACA  adopted  two  decisions  concerning  anti-competitive  agreements  (cartels)  and  two 
decisions concerning abuses of dominant positions. The ACA issued fines of approximately € 
245,500 for infringements of the competition rules. Seven proposed mergers were notified to 
the  ACA  and  were  authorised  without  conditions.  The  ACA  concluded  enquiries  into  the 
banking,  pharmaceuticals  and  energy  sectors,  and  subsequently  issued  recommendations  to 
the Albanian government. It also initiated in-depth investigations in the bread markets and in 
the markets for loading/unloading and depositing liquid natural gas in port facilities. 

There was some progress in the field of State aid. The State Aid Commission (SAC) adopted 
a decision on State aid to the Albanian Post as well as Guidelines on State aid in the Postal 
Sector,  bringing  Albania's  policy  for  postal  services  closer  to  the  acquis.  A  decision  on 
subsidies to the Albanian railways, which was deemed not to be in line with the acquis, was 
revoked. No investigations were initiated ex-officio. Finalisation of the regional State aid map 
is still pending. 

The  administrative  capacity  of  the  State  aid  authority  remained  unchanged  and  efforts  are 
required to strengthen the State Aid Sector (SAS) in line with its responsibilities. The de facto 
operational independence of the SAC requires continued monitoring. 

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Conclusion 

Albania  has  made  moderate  progress  in  the  area  of  competition.  However,  the  responsible 
authorities  lack  the  appropriate  administrative  capacity,  and  measures  are  still  required  in 
order  to  safeguard  the  operational  independence  of  the  State  Aid  Commission.  Preparations 
are overall on track. 

4.9. 

Chapter 9: Financial Services 

There  was  some  progress  in  the  area  of  banks  and  financial  conglomerates.  In  December 
2010, the Bank of Albania (BoA) adopted legislation on risks arising from large exposures of 
banks,  on  capital  adequacy,  and  on  risk  management  in  the  activity  of  non-bank  financial 
institutions. These amendments furthered legislative alignment with the acquis. The January 
2011  law  on  operational  risk  management  brings  the  regulatory  framework  for  banks, 
branches of foreign banks, non-bank financial institutions, savings and credit associations and 
their  unions  closer  to  the  acquis  and  to  the  Basel  practices  on  operational  risk  management 
and supervision. The BoA also approved the regulation on credit risk management.  

The  BoA  has  continued  its  efforts  to  improve  its  administrative  capacity  by  increasing  the 
staff  of  its  Supervisory  Department  from  32  to  49  people.  Revisions  of  manuals  on  risk 
supervision based on operational risk management are underway. 

There  has  been  some  progress  in  the  non-banking  financial  sector.  The  Albanian  Financial 
Supervisory  Authority  (AFSA)  approved  several  regulations  in  the  field  of  collective 
investment undertakings.  

AFSA has moved to improved premises, the technical infrastructure has been enhanced and 
staff  have  received  additional  training.  However,  some  members  of  the  AFSA  board 
continued to work after the expiration of their mandates. In addition, AFSA's administrative 
capacities are inadequate and require additional staff.  

There  has  been  some  progress  in  alignment  with  the  acquis  in  the  area  of  insurance  and 
occupational  pensions.  AFSA  licensed  the  first  two  voluntary  pension  fund  management 
companies. Licensing of a third fund is in progress. AFSA continued its efforts to improve the 
regulatory framework in the field of voluntary pensions by issuing implementing legislation 
for the law on voluntary pension funds.  

The  law  on  certified  accounting  experts  was  amended  to  now  apply  to  both  insurance 
companies and pension funds. There was some progress in the field of compulsory insurance 
in  the  transport  sector.  Parliament  approved  laws  to  liberalise  the  motor  insurance  sector, 
allowing  insurance  companies  to  set  their  own  premiums  tariffs.  Preparations  for  the 
establishment of an Information Centre of Compulsory Insurance are advanced, and include 
plans to apply the bonus-malus system. Positive growth of 4% was recorded in the insurance 
market,  and  foreign  presence  increased.  The  private  pensions  market  is  also  growing  but 
remains underdeveloped. 

AFSA  has  continued  its  efforts  to  strengthen  supervision  of  the  insurance  market  by 
introducing  a  risk-focused  supervision  methodology  and  improving  reporting  and  the 
implementation  of  the  Management  Information  System.  However,  further  efforts  are  still 
required in this area. 

There are no developments to report in the field of financial market infrastructure. 

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There has been little progress in alignment with the acquis in the area of securities markets 
and  investment  services.  In  December  2010,  the  regulation  on  deadlines,  conditions  and 
procedures  for  the  authorisation  of  banks  as  custodians  of  bonds  was  approved  as 
implementing  legislation,  following  the  approval  of  the  law  on  corporate  local  government 
bonds.  

However,  the  securities  stock  market  remains  underdeveloped,  with  no  companies  listed  on 
the  stock  exchange.  There  are  no  multilateral  trading  facilities  and  no  specific  rules  are  in 
place.  Alignment  with  the  Prospectus  Directive,  markets  in  financial  instruments  Directive 
(MiFID),  the  Market  Abuse  Directive  and  the  undertakings  for  collective  investment  in 
transferable securities (UCITS) Directive is at an early stage. No system for judicial appeal is 
in  place  in  the  authorisation  procedure  and  there  is  no  legislation  governing  investor 
compensation schemes. 

Conclusion 

There has been some progress in the field of financial services. Progress has been made in the 
alignment of legislation with the acquis in the field of banks and financial conglomerates and 
insurance  and  occupational  pensions.  However,  there  remains  insufficient  administrative 
capacity  in  the  non-banking  financial  sector  to  enforce  market  surveillance  and  proper 
implementation of legislation. Further efforts are needed with regard to the securities markets. 
Investment services legislation and infrastructure are at an early stage. Overall, preparations 
are moderately advanced. 

4.10.  Chapter 10: Information society and media 

There  has  been  some  progress  in  the  area  of  electronic  communications  and  information 
technologies.  The  Agency  for  Electronic  and  Postal  Communications  (AKEP)  issued  a 
decision to review tariffs in the mobile telephony sector by 2015. Competition in the mobile 
telephony  market  has  been  intensified  with  the  introduction  of  a  fourth  operator.  There  has 
been  progress  on  the  introduction  of  some  competitive  safeguards,  such  as  mobile  number 
portability  and  decisions  on  new  reference  interconnection  offers  and  long-run  average 
incremental  cost  accounting.  Carrier  selection  and  pre-selection  is  to  be  implemented  in 
autumn  2011  for  international  calls  and  in  2012  for  national  calls.  The  second  UMTS/3G 
licence  was  awarded  in  September  2011,  however,  no  timetable  for  release  of  further  (3G) 
licences to encompass the full possibilities of the spectrum has been communicated. 

However, important reforms, such as adoption of amendments to the 2008 Law on electronic 
communications and secondary legislation, are pending. Furthermore, local loop unbundling 
and  rebalancing  of  tariffs  has  not  been  achieved.  Liberalisation  of  access  to  spectrum  is 
insufficient.  No  licence  for  fixed  wireless  services  has  been  awarded  either.  While  mobile 
penetration  is  high,  the  markets  for  fixed  telephony  and  broadband  are  underdeveloped  by 
European  and  regional  standards  (with  penetration  levels  at  around  11%  and  3.5% 
respectively). At the same time, the plans and the process of tendering to build a nationwide 
broadband network are raising concerns about feasibility and competition. The administrative 
capacity and resources of AKEP remain weak. Consequently, insufficient implementation of 
regulation and legal certainty are still hindering the creation of effective competition.  

Progress in the field of information society services has been uneven. The GovNet network 
infrastructure has been improved and extended. Following the licensing of the first agency for 
issuing  of  e-certificates  in  February  2011,  the  applications  for  e-signature  have  begun  to  be 

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sent  in  to  the  Albanian  Post.  The  revised  action  plan  for  implementation  of  the  strategy  on 
information  society  has  been  adopted.  However,  the  administrative  capacity  to  implement 
policies and legislation in this field remains weak. The National Agency for the Information 
Society  still  does  not  have  the  necessary  administrative  and  technical  capacity  and  human 
resources.  Albania  is  working  on  amending  the  Law  on  e-commerce  with  a  view  to  fully 
aligning  with  the  e-commerce  directive.  Regulation  of  conditional  access,  unsolicited 
communications  and  itemised  billing  are  all  provided  for  in  the  draft  Law  on  Audiovisual 
Media Services, which is pending adoption. Albania has not yet adopted a broadband strategy 
and the broadband penetration rate is low.  

There has been little progress in the field of audiovisual policy. Albanian legislation is still 
only partly aligned with European standards on media regulation and the Audiovisual Media 
Services Directive. The draft Law on Audiovisual Media Services has not yet been adopted. 
Concerns have been raised that some provisions of the draft Law are not commensurate with 
European standards on independence of the regulatory authority. The deadline for the digital 
switchover has been extended from the end of 2012 to the end of 2015; no concrete measures 
for  this  transition  have  been  taken  as  yet  and  the  digitalisation  strategy  has  not  yet  been 
adopted.  

The National Council on Radio and Television continues to lack sufficient administrative and 
technical  capacity  and  concerns  remain  about  its  independence.  The  public  service 
broadcaster has not increased its editorial independence. There has been no progress regarding 
the adoption of amendments to the Criminal Code decriminalising libel and defamation which 
require  a  3/5  reinforced  majority  in  Parliament.  The  full  effective  implementation  of  the 
existing law on access to information has not been ensured. 

Conclusion 

Progress in the field of information society and media has been uneven. Some measures were 
taken  to  improve  competition  in  the  electronic  communications  sector  but  concerns  remain 
over  the  liberalisation  of  the  market,  including  spectrum  management,  and  the  capacity  and 
independence  of  the  national  regulatory  authority.  Alignment  with  the  EU  acquis  is  not 
completed,  in  particular  as  regards  e-commerce  and  conditional  access.  Furthermore, 
important legislative acts, notably in the area of audiovisual policy and for improving media 
freedom,  have  not  yet  been  adopted.  The  capacity  for  implementation  of  legislation  and 
policies remains weak. Overall, preparations in the field of information society and media are 
advancing slowly. 

4.11.  Chapter 11: Agriculture and rural development  

There has been progress on horizontal issues. 

In 2010, around € 7,5 million were committed to agriculture for  direct support schemes. Aid 
has been allocated for plant and livestock production, agro-processing, farm machinery, and 
the setting up of a credit guarantee fund.  

Rules  for  the  improvement  of  land  administration  and  protection  were  adopted.  A  law 
governing the putting into use of abandoned agricultural land has been approved. Preparations 
for the agricultural census to  take  place in 2012 are on track. The  collection of data for  the 
completion  of  the  agricultural  land  register  has  continued.  However,  the  electronic  land 

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cadastre  has  not  yet  been  established,  and  farm  and  animal  registers  still  have  to  be 
completed. Access to credit and advisory services needs to be further developed.  

There  is  little  visible  progress  with  regard  to  the  alignment  with  the  Common  Market 
Organisation.  In  the  area  of  animal  products,  measures  have  been  introduced  for  the 
measurement  and  evaluation  of  production  and  methods  for  assessing  the  genetic  values  of 
breeding animals for bovines, small ruminants and pigs. Good progress can be observed with 
regard to rural development. Good progress has been made in setting up the structures for 
the  implementation  of  the  Instrument  for  Pre-Accession  Assistance  for  Rural  Development 
(IPARD)  programme,  the  segregation  of  duties  has  been  defined  at  the  Albanian  Rural 
Development  Agency  (ARDA)  and  staffing  improved.  Both  the  rural  development  strategy 
and the agriculture and food strategy need to be updated. The capacity for carrying out policy 
analysis and designing rural development policies needs to be strengthened. 

Some  progress  has  been  made  in  the  area  of  quality  policy,  in  particular  regarding 
preparations by the authorities for the introduction and promotion of geographical indications.  

While some organic farming has been subsidised through direct schemes, most activities in 
the sector have been driven by donor funding.  

Conclusion 

Overall, some progress has been made in the field of agriculture and rural development. The 
basic implementing structures for rural development programmes have been set up. Financial 
resources have continued to be allocated with a positive effect on agricultural production and 
farm competitiveness. However, the capacities for carrying out policy analysis or design rural 
development policies remain weak. The implementation of IPARD requires a leading role and 
ownership  of  the  Ministry  of  Agriculture  in  order  to  enable  the  best  use  of  knowledge  and 
technical support. 

4.12.  Chapter 12: Food safety, veterinary and phytosanitary policy 

Some  progress  has  been  observed  in  the  area  of  general  food  safety.  The  National  Food 
Authority (NFA) has significantly increased its operational capacity and started to expand its 
activity  across  the  12  regions  of  the  country.  However,  the  repartition  of  competences 
between the Ministry of Agriculture, Food and Consumer Protection (MAFCP) and the NFA 
still needs to be clarified and a clear chain of command has to be established. The National 
Food  Authority  has  not  yet  developed  its  risk-assessment  capacity  and  the  Scientific 
Committee and Panels have not yet been established.  

In  the  area  of  veterinary  policy,  progress  has  been  limited.  There  is  still  a  need  to  adopt  a 
new veterinary framework law. The division of responsibilities between the animal health and 
welfare services of the MAFCP and the NFA has not been clarified. There is still no unified 
chain  of  command  and  responsibilities  remain  fragmented  among  the  different  institutions. 
The  level  of  staff,  particularly  at  the  central  level,  remains  inadequate.  In  the  area  of 
identification  and  registration  of  animals,  most  bovines  have  been  registered  and  their 
movements are reported. Nevertheless, reporting is not always done in a reliable and timely 
manner. The harmonized animal database (which also includes the animal health database) is 
under development and is expected to improve the timeliness of reporting. Some preparatory 
actions for the registration of small ruminants (sheep and goats) have taken place.  

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Capacity  to  manage  the  transposition  of  EU  legislation  and  the  implementation  of  disease 
eradication  programmes,  and  to  ensure  timely  communication  of  information,  remains 
limited. As regards placing on the market of food and feed and animal by-products, the 
food hygiene package has been adopted and feed hygiene legislation aimed at aligning with 
the acquis has been  drafted.  Technical documentation to sustain sufficient risk  management 
capacity  with  regard  to  official  controls  has  been  prepared.  IT  infrastructure  and  a  database 
for electronic registration of food establishments, recording of official controls and accessing 
the Rapid Alert System for Food and Feed has been developed and tested. More specialised 
staff will need to be recruited, in order to carry out official controls on food and feed hygiene. 
However, enforcement of adopted legislation is weak due to the lack of financial resources for 
official  control.  Only  a  few  establishments  in  the  meat,  fish  and  dairy  sectors  apply  hazard 
analysis  and  critical  control  point-based  procedures  and  self-controls.  Laboratory  capacity 
needs to be improved. 

The administrative capacity is not yet in place for the pesticide residue controls on food and 
feed  of  plant  and  animal  origin,  even  though  the  relevant  legislation  has  been  transposed. 
Further  expansion  of  the  remit  of  the  National  Food  Authority  in  the  field  of  plant  health 
protection is planned during 2011.  

In  the  area  of  food  safety  rules,  there  has  been  some  progress  as  regards  the  adoption  of 
implementing legislation in various areas.  

Limited  progress  has  been  achieved  in  the  phytosanitary  sector.  Responsibility  for  plant 
health  has  been  allocated  to  the  NFA  and  for  plant  protection  to  the  Directorate  of  Crop 
Production Policies. 

No progress has been made with regard to the transposition and implementation of acquis on 
genetically modified organisms. 

Conclusion 

Overall, some progress has been made with regard to the establishment of the National Food 
Authority, the registration of bovines, the adoption of the hygiene rules and an implementing 
regulation  for  food  safety.  However,  financial  resources  need  to  be  provided  in  order  to 
ensure  the  proper  implementation  and  enforcement  of  legislation.  Substantial  efforts  are 
required  as  regards  harmonization  of  national  legislation  with  the  acquis,  repartition  of 
competencies,  communication  and  cooperation  between  services  and  the  strengthening  of 
human resources. 

4.13.  Chapter 13: Fisheries 

The  sector  remains  fragmented  as  regards  responsibilities  and  communication,  with  fish 
production and fishery inspections being housed in two different departments of the Ministry 
of Environment, Forests and Water Administration, and with fish diseases being covered by 
the Animal Health Directorate in the Ministry of Agriculture, Food and Consumer Protection 
(MAFCP)  and  processed  fishery  products  being  covered  by  the  Food  Safety  Department  in 
the MAFCP and the National Food Authority. Work on drafting a new fisheries law has been 
advancing with the aim of strengthening the surveillance and monitoring system in fisheries, 
to  enable  the  sector  to  apply  the  satellite-based  vessel  monitoring  system  and  to  combat 
illegal, unreported and unregulated fishing. 

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As regards resource and fleet management, the fishing fleet has been registered and vessels 
have been classified into categories. However, the application of an operational fishing fleet 
register,  according  to  the  recommendations  of  the  General  Fisheries  Commission  for  the 
Mediterranean (GFCM) is still pending. 

In the area of inspection and control, administrative capacity remains very weak, with only a 
small  number  of  administrative  staff  responsible  at  a  central  level  for  fisheries  and 
aquaculture.  The  Parliament  has  approved  a  new  inspection  law,  which  provides  for  the 
merging  of  the  Forestry,  Fisheries  and  Environment  inspectorates.  Staffing  of  the  maritime 
guard  has  been  increased.  However,  qualified  and  experienced  local  fisheries  inspectors 
continue  to  be  assigned  tasks  related  to  aquaculture,  veterinary  and  zootechnical  issues. 
Availability of funds for the monitoring programme remains very low.  

Most inspections have been conducted in the main lakes to tackle unlicensed fishing and use 
of illegal fishing means. Almost no infringements have been reported as regards sea fishing. 
The  lack  of  means  and  resources  for  fishery  inspectors  has  made  it  difficult  to  inspect  and 
enforce legislation, especially concerning small coastal fishing. The control system for fishing 
activities  needs  to  be  strengthened  considerably  and  more  specialised  personnel  are  needed. 
The enforcement and collection of fines remains a challenge. 

A Vessel Monitoring System ("Blue boxes") has been installed in all fishing vessels over 12 
metres  to  strengthen  the  surveillance  of  the  fishing  fleet.  Ensuring  reliable,  systematic  and 
improved collection of data on the fishing fleet, catches, landings and the biological status of 
the stocks in Albanian waters continues to be an area of concern. The coverage of the main 
fishing area is not yet complete and the operations depend to a large extent on donor project 
resources. 

In  preparation  for  management  of structural actions, there is a need for  reinforcement and 
training  of  staff,  backed  up  by  EU  expertise.  Albania  still  provides  State  aid  to  support 
development of fisheries infrastructure in the four fishing ports and excise-free fuel for fishing 
vessels.  

Measures  on  market  policy  have  remained  at  a  preliminary  stage,  in  particular  as  regards 
producers' organisations and the collection of market data.  

In the context of the implementation of international agreements, the country has continued 
to attend the General Fisheries Commission for the Mediterranean and the AdriaMed project. 
Albania has submitted neither the report of fishing capacity and inspection plans for the 2011 
season,  nor  its  annual  fishing  plans,  to  ICCAT  in  relation  to  the  Recovery  Plan  for  Bluefin 
tuna.  

Conclusion 

Overall, there has been some progress in the area of inspection and control and positive signs 
related to the increased importance attached to the role and the future of the fishery sector in 
economic  development.  Technical  capacities  to  strengthen  the  surveillance  and  monitoring 
system  in  fisheries  and  combat  illegal,  unreported  and  unregulated  fishing  have  been 
upgraded. Nevertheless, enforcement of regulations in inland waters and coastal areas remains 
weak due to the lack of resources. Inter-institutional cooperation will need to be improved. 

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4.14.  Chapter 14: Transport policy 

In  February,  the  Ministry  of  Transport  and  Public  Works  finalised  the  revised  five  year 
Albanian National Transport Plan, as the main instrument for decision-making and strategic 
planning for the transport sector in Albania.  

There  was  progress  on  road  transport.  Legislative  alignment  with  the  EU  acquis  is  fairly 
advanced, including on weight and dimension requirements for vehicles. No progress can be 
noted  as  regards  roadworthiness  tests,  driving  licences  and  registration  documents. 
Implementation  has  started  in  all  other  areas.  Some  actions  were  taken  to  transpose  the 
legislation  on  the  inspection  of  vehicles.  However,  road  safety  remains  a  cause  for  serious 
concern.  The  steady  increase  in  road  traffic,  combined  with  insufficient  road  maintenance, 
illegal constructions along the roads and poor driver discipline, continue to pose problems. In 
February the government adopted the National Road Safety Strategy and the Action Plan for 
Road Safety for 2011–2015, which confirmed the importance of digital tachographs and speed 
limiters.  However,  the  implementation  of  both  the  strategy  and  action  plan  by  means  of  a 
work programme remains a challenge. The legislation on dangerous goods has not yet been 
adopted.  

Little  progress  has  been  made  in  rail  transport.  The  national  railway  company  Hekurudha 
Shqiptare (HSH) is now operating with four business units; a first step to account separation 
according to EU rules. The State compensates HSH for passenger services. Progress has been 
made in negotiations for a border crossing agreement with Montenegro. Rail freight traffic, in 
particular the international service to neighbouring Montenegro, has increased. Little progress 
has  been  made  in  the  preparation  of  the  reform  of  railway  legislation.  No  progress  can  be 
reported in the setting up of independent railway institutions, infrastructure managers and rail 
operators, which are a precondition for open access to the Albanian rail network. A draft for a 
network  statement  has  not  been  published.  Problems  in  sustaining  rail  infrastructure  quality 
remain due to insufficient funds for maintenance.  

Some  progress  can  be  reported  on  maritime  transport.  The  General  Maritime  Directorate 
established in 2010 in Durres is now operational and fully staffed. While progress was made 
in terms of the establishment of a ships register and of a safety authority, the reorganisation of 
Ports'  Control  and  the  establishment  of  Flag  state  Control  are  still  ongoing.  According  to 
statistics for 2010 under the Paris Memorandum of Understanding on Port State Control, the 
detention rate of vessels flying the Albanian flag was 16 %, which is still well above the EU 
average of 1.78 %. Cabotage remains reserved to national flag-carriers and it is still obligatory 
that ships' captains must be Albanian nationals.  

As regards inland waterways transport, it is limited to a regular line on Komani Lake. 

As regards combined transport, Albania is in the initial phases of development. 

As regards air transport, Albania has made limited progress with the implementation of the 
first  phase  of  the  European  Common  Aviation  Area  Agreement.  Some  progress  can  be 
reported  in  the  transposition  of  the  Air  Traffic  Management  legislation.  Progress  was  also 
made  on  aviation  security,  with  the  exception  of  the  National  Civil  Security  Programme. 
Further efforts are also needed to improve the implementation of acquis on ground handling 
and  on  allocation  of  slots.  The  National  Supervisory  Authority  has  been  set  up  and  staff 
training  is  ongoing.  However,  there  was  no  progress  regarding  implementation  of  air  safety 
legislation. The Civil Aviation Authority lacks qualified inspectors and has therefore not been 

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in  a  position  to  discharge  its  responsibilities  with  regards  to  the  oversight  of  approved 
undertakings  and  license  holders.  A  State  Safety  Programme  has  not  been  developed  and  a 
level  of  safety  oversight  in  compliance  with  international  safety  standards  has  not  yet  been 
ensured.  

As  regards  satellite  navigation,  Albania  does  not  currently  plan  to  take  part  in  the  Galileo 
satellite navigation programme, once it becomes operational.  

Conclusion 

While there was progress in the area of road and maritime transport, progress has remained 
limited  in  the  fields  of  rail  and  air  transport.  Aviation  safety  legislation  has  yet  to  be 
implemented effectively. Albania's administrative structures in the different transport sectors 
need to be made more effective. Overall, preparations are not very advanced. 

4.15.  Chapter 15: Energy 

There  was  some  progress  on  security  of  supply.  A  new  400  kV  interconnection  line  with 
Montenegro  became  operational  in  April  2011.  However,  the  electricity  supply  remains 
fragile  and  vulnerable  to  hydrological  conditions,  due  to  the  country's  almost  exclusive 
dependence  on  hydro  power  plants  for  domestic  generation.  Further  efforts  are  required  in 
order to implement the acquis on the security of the electricity supply in line with Albania's 
obligations under the Energy Community Treaty.  

As from 1 January 2011, the law provides for the oil stocks reserve obligation to be increased 
to  90  days,  in  line  with  the  EU  oil  stocks  directive.  The  government  has  taken  measures  to 
impose  sanctions  and  suspend  the  license  or  activities  of  operators  failing  to  fulfill  their 
obligations. Actual compliance with the legal requirements has yet to be demonstrated.  

Progress has been limited as regards the internal energy market. Preparations are ongoing to 
restructure  the  state-owned  generation  and  wholesale  company  KESH.  The  Albanian 
Competition  Authority  considers  that  the  lack  of  an  effective  functional  and  financial 
separation of the public wholesale supplier and the generation elements of KESH is hindering 
competition.  The  Power  Sector  Law,  which  regulates  the  electricity  sector,  and  its 
implementing  legislation  are  not  yet  in  line  with  the  acquis.  A  significant  part  of  the 
transmission and distribution capacity is still reserved for the wholesale supplier. Distribution 
losses  have  been  slightly  reduced  overall.  Bill  collection  rates  levels  remain  around  77%. 
Vigorous efforts are still required in these areas. The market model has yet to be adapted in 
order to ensure the economic viability of the electricity sector. Albania has no gas market and 
secondary legislation for the June 2008 Natural Gas Sector has not yet been approved. Further 
efforts  are  needed  in  order  to  strengthen  the  monitoring  and  enforcement  powers  of  the 
Albanian energy regulator ERE, as well as its independence.  

There has been no progress in the field of renewable energy. The legislative and regulatory 
framework is not in line with the acquis. Existing administrative burdens and the absence of 
rules  for  the  cost  of  connection  to  the  grid  or  for  grid  reinforcements  are  hampering  the 
integration  of  new  renewable  energy  producers.  There  was  no  progress  regarding  the 
implementation  of  Albania's  biofuels  target.  A  National  Renewable  Energy  Action  Plan 
providing  for  reaching  the  target  for  the  share  of  renewable  energy  in  the  final  energy 
consumption  in  2020  has  not  yet  been  prepared.  Albania  needs  to  make  further  efforts  to 
improve the use of renewable energies. 

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There  was  no  progress  in  the  area  of  energy  efficiency  as  regards  bringing  the  Energy 
Efficiency  Law  into  line  with  the  acquis.  The  government  approved  a  National  Energy 
Efficiency  Action  Plan  for  the  period  2011-2018  but  the  legal  framework  and  inter-
institutional distribution of responsibilities for its implementation has yet to be established. 

There was some progress on nuclear  safety  and  radiation protection.  Albania ratified  the 
Convention  on  Nuclear  Safety  and  the  Joint  Convention  on  the  safety  of  spent  fuel 
management  and  the  safety  of  radioactive  waste  management,  which  became  effective  in 
September. Decisions were approved on protection of the professionally exposed to ionizing 
radiation  and  on  radon  concentration  and  radionuclide  levels.  The  Radiation  Protection 
Commission (RPC) issued two decisions relating to the Code of Practice for users in Nuclear 
Medicine  and  to  dosimetry  levels  for  medical  exposure.  As  regards  enforcement,  the  RPC 
approved regulations on inspection reporting and on the procedure for the approval of trading, 
transfer  and  transport  of  radioactive  sources.  However,  further  efforts  are  still  required  to 
transpose and implement the Euratom acquis. Compliance of recent regulatory developments 
with  the  acquis  remains  to  be  verified.  The  capacity  of  the  regulatory  authority  is  still  not 
sufficient  to  implement  and  enforce  legislation  in  line  with  international  standards. 
Preparations for drafting the national strategy and policies for radioactive waste management 
are  at  an  early  stage.  Albania's  conditioned  waste  store  has  not  yet  been  properly  licensed 
according to international standards, and its placement close to populated areas is a concern.  

Conclusion 

Progress has been very limited in the energy sector. The Power Sector Law is not in line with 
the acquis. Market reform in the electricity sector has not yet been effectively achieved and 
further  efforts  are  required  in  order  to  ensure  its  economic  viability.  Further  efforts  are 
required  in  the  field  of  renewable  energy,  as  well  as  on  strengthening  the  capacities  and 
institutional  independence  of  the  regulatory  authorities  for  electricity,  gas  and  radiation 
protection. Overall, preparations in the area of energy are advancing slowly. 

4.16.  Chapter 16: Taxation  

Some progress can be reported in the area of indirect taxation. There were some legislative 
amendments  regarding  VAT  exemptions  and  reduced  rates.  Electronic  declaration  has  been 
made  mandatory  for  VAT  taxpayers  and  the  introduction  of  fiscal  devices  (cash  registers) 
progressed. VAT refund procedures improved but further efforts are still required, including 
as  regards  risk  analysis,  in  order  to  reduce  delays.  The  VAT  law  is  not  yet  in  line  with  the 
acquis. 

Approximation to the acquis in the area of excise progressed slightly with the adoption of a 
new list of excisable products and rates, including on minimum rates for cigarettes. However, 
further efforts are required in order to bring the excise structure and rates into line with the 
acquis, including as regards the reduced rates for beer applied to small breweries.  

There was little progress in the area of direct taxation. Some amendments were made in the 
area of personal income tax by providing detailed rules on income declaration, including on 
its scope and the declaration of deductible expenditures. However, further efforts are required 
as  regards  transposition  of  legislation  and  proper  implementation  of  the  principles  of  good 
governance. 

There has been no progress as regards administrative cooperation and mutual assistance.  

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Limited  progress  can  be  reported  as  regards  administrative  and  operational  capacity. 
Cooperation with taxpayers is improving. Measures were taken to support e-form declaration, 
and a taxpayers' service Centre in Tirana started operation in December 2010. However, the 
capacity  of  the  Taxpayer's  advocate  is  still  limited  and  there  has  been  no  assessment  of  the 
functioning  of  the  Taxation  Council.  Transparency  and  consultation  with  business 
representatives in the legislative process remains limited. A Code of Ethics was approved in 
February  2011,  but  anti-corruption  measures  require  further  efforts,  as  the  perception  of 
corruption  in  the  tax  administration  remains  high.  The  Training  Academy  of  the  Tax  and 
Customs Administration is still not operational, which hinders training activities. The capacity 
of  the  Taxation  administration,  including  as  regards  IT,  remains  unchanged  overall.  The 
decentralised  IT  system  is  no  longer  adequate  for  the  needs  of  the  tax  administration.  It  is 
outdated  and  its  risk  analysis  and  accounting  functionalities  are  limited.  Further  efforts  are 
required  to  enhance  audit,  investigation  and  intelligence  capacities  and  on  combating  tax 
fraud and avoidance.  

Conclusion 

There was little progress in the area of taxation. Further efforts are required on approximation 
to  the  acquis  on  direct  and  indirect  taxation  and  to  improve  the  system  of  refunding  VAT. 
Enhancing  administrative  and  technical  capacity  and  combating  corruption  in  the  tax 
administration require further efforts. Preparations are moderately advanced. 

4.17.  Chapter 17: Economic and Monetary policy 

There  has  been  limited  progress  in  aligning  Albania's  legal  framework  with  the  acquis  on 
monetary policy. A new draft Law on the National Bank, aimed at further alignment with the 
acquis, including provisions covering procedures for dismissal of the Governor, the personal 
independence  of  Council  members  and  the  accountability  of  the  National  Bank,  has  not  yet 
been adopted.  

Little progress has been made in aligning with the acquis in the field of economic policy. In 
February  2011  Albania  submitted  its  Economic  and  Fiscal  Programme  (EFP),  making 
reference to the Macroeconomic and Fiscal Framework 2012–2014. The EFP broadly covers 
all relevant data, but it contains weaknesses in respect to labour market and wage statistics. It 
also  failed  to  adequately  address  the  impact  on  the  country  of  the  economic  conditions  of 
Albania's trading partners. The EFP is not clear on the planned fiscal policy measures in the 
medium term and their budgetary costs. It is also vague on the overall strategy, while the link 
between the reforms and the fiscal objectives is not clear. The public finance data in the report 
are not in compliance with the ESA95 European system of accounts. 

The capacity for economic policy formulation and coordination is insufficient. 

Conclusion 

There  has  been  limited  progress  in  aligning  with  the  acquis  in  the  areas  of  economic  and 
monetary  policy,  although  weaknesses  persist  in  its  economic  and  fiscal  policies.  Overall, 
preparations in this area are not very advanced.  

4.18.  Chapter 18: Statistics 

Progress  in  alignment  with  the  acquis  can  be  reported  in  the  area  of  statistical 
infrastructure. There were increases in the budget and staff of the national statistics institute 

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(INSTAT), in advance of the 2011 population and housing census. The infrastructure has been 
updated  to  use  the  latest  technology  for  data  processing  and  data  dissemination.  However, 
provisions  of  the  Law  on  statistics  as  regards  the  role  of  INSTAT  as  coordinator  of  the 
national statistical system are insufficient. It also fails to ensure a broad representation of all 
providers  and  users  of  official  statistics  in  the  statistical  council.  The  legal  framework 
governing  the  recruitment  and  dismissal  of  its  Director  General  does  not  sufficiently 
guarantee the professional independence of INSTAT. 

Some progress has been made with regard to classifications and registers. The first release 
of  the  updated  business  register  and  the  economic  census  data  were  based  on  European 
Nomenclature  of  Economic  Activities  (NACE)  Rev.1.1.  The  codification  of  units  in  the 
business  register  according  to  NACE  Rev.2  has  started  and  will  be  published  when  the  law 
which  officially  introduces  NACE  Rev.2  is  adopted.  INSTAT  agreed  a  subdivision  of  the 
country into statistical regions consistent with the  EU Nomenclature of Territorial Units for 
Statistics  (NUTS).  The  results  from  the  Enterprise  Census  have  been  used  for  updating  the 
business register.  

In the area of sector statistics, there has been good progress and efforts were made to upgrade 
several  statistical  domains.  Regarding  business  statistics,  INSTAT  carried  out  the  census  of 
economic enterprises in November and December 2010. Improvements in quarterly national 
account statistics took place in the field of basic statistics calculation as well as for statistics 
methodology.  

Some  progress  has  been  made  regarding  the  timely  publication  of  consumer  price  index, 
foreign trade statistics and short term statistics. In the area of price statistics, improvements 
have  been  made  regarding  the  revision  of  the  construction  cost  index  and  compilation  of 
import prices. Agricultural and agromonetary statistics need considerable further upgrading. 

The methodological framework of the census of agricultural holdings, due to be conducted in 
June  2012,  is  being  prepared  and  a  pilot  census  will  be  held  in  November  2011.  The 
preparatory activities for the October 2011 population and housing census are advancing but 
further efforts are still needed to ensure the successful conduct of the census. 

Conclusion 

Progress  has  been  made  on  alignment  with  the  acquis,  especially  in  sector  statistics  and 
through  the  modernisation  of  the  statistical  infrastructure.  However,  weaknesses  persist, 
particularly in agricultural, social, business and macroeconomic statistics. Further efforts are 
needed  in  order  to  align  with  the  acquis.  The  professional  independence  of  INSTAT  is  not 
sufficiently  anchored  in  the  legislation  and  efforts  are  required  to  ensure  it  has  adequate 
human and financial resources. Overall, preparations are moderately advanced.  

4.19.  Chapter 19: Social policy and employment  

No progress can be reported in the area of labour law.  

There  has  been  some  progress  in  the  area  of  health  and  safety  at  work.  The  occupational 
safety and health strategy has been adopted and, in February 2011, the Council of Ministers 
approved  two  decisions  that  are  part  of  the  measures  intended  to  implement  the  Law  on 
Health  and  Safety  at  Work.  A  decision  designed  to  align  with  the  EU  Directive  on 
requirements  for  the  provision  of  safety  and  health  signs  at  the  workplace  was  adopted  in 

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December 2010. Awareness-raising activities have been carried out to disseminate knowledge 
of health and safety at work. The process of transposing EU directives continues to be slow.  

The  State  Labour  Inspectorate  has  stepped  up  its  cooperation  with  other  institutions,  in 
particular the Ministry of Health, with whom it has carried out a series of joint inspections. 
However, the State Labour Inspectorate has not been further strengthened in terms of human 
and  financial  resources,  and  no  progress  has  been  made  towards  establishing  the  24  local 
offices, as there is still only a single local office located in Saranda.  

Some progress can be noted in the area of social dialogue. The National Labour Council was 
convened  in  regular  meetings  with  a  widened  scope  to  cover  more  topics  with  nationwide 
relevance.  The  Council  amended  the  regulation  on  its  organisation  and  functioning  in 
November  2010  and  a  Social  Memorandum  of  Understanding  was  signed  in  February  2011 
between  the  government,  employers'  and  workers'  associations.  However,  the  establishment 
of clear and measurable representativeness criteria for membership in the Council has not yet 
been finalised. Actions were taken to promote sectoral and bipartite social dialogue and a new 
umbrella  organisation  of  employers  has  been  registered.  However,  there  has  been  little 
progress towards developing collective bargaining in the private sector. 

There  has  been  limited  progress  as  regards  employment  policy.  Monitoring  of  the 
employment strategy has started. However, no action plan for employment has been adopted. 
There has been very limited improvement regarding the labour market situation. The level of 
inactivity remains high and the unemployment rate though slightly decreasing, still stands at 
13.7%.  Unemployment  affects  primarily  those  with  lower  skills,  young  people  and  those  in 
remote regions. Although Albania has continued to implement a range of active labour market 
measures,  there  are  still  concerns  over  reported  abuses  of  the  subsidised  employment 
programmes, and expenditure for active labour market measures remains low. Informal work 
arrangements continue to be widespread. Labour market statistics continue to be weak. 

Efforts  to  train  National  Employment  Service  (NES)  staff,  including  in  regional  and  local 
offices,  and  to  develop  guidelines  for  counselling,  have  continued.  The  budget  for  regional 
and  local  NES  structures  was  significantly  increased.  The  "job  vacancies  bank"  system  has 
been completed in order to improve the information available on the NES website. However, 
there  is  an  ongoing  need  for  further  training  of  staff,  computerisation  of  services  across  the 
country,  cleaning  registries,  liaising  with  employers,  formalising  work  and  providing  more 
effective counselling services. 

Preparations  for  the  European  Social  Fund  have  not  advanced.  (See  also  Chapter  22  - 
Regional policy and coordination of structural instruments) 

There has been uneven progress in the area of social inclusion. The first monitoring report on 
the  national  strategy  on  social  inclusion  2007-2013  reflects  the  progress  in  assessing  and 
addressing  risk  factors  that  accompany  economic  growth.  There  has  been  some  progress  in 
poverty  reduction,  however,  pockets  of  persistent  poverty  remain  in  rural  and  mountainous 
areas.  Little  progress  has  been  made  in  the  concrete  implementation  of  the  Strategy  for  the 
improvement of the living conditions of the Roma minority.  

Progress as regards the employment of persons with disabilities has been limited, particularly 
in  the  context  of  labour  market  measures  to  be  implemented  by  the  National  Employment 
Service  at  central  and  local  levels.  Quotas  on  employment  of  persons  with  disabilities  have 

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not  been  enforced.  Furthermore,  the  system  of  indexing  the  disability  allowance  has  been 
changed, resulting in decreased living standards.  

There  has  been  some  progress  as  regards  social  protection.  The  Law  on  Social  Assistance 
and Services has been amended, expanding the categories that are eligible for economic aid. 
The Law on Compulsory Health Insurance was also adopted, establishing a mandatory health 
insurance  scheme  and  transferring  its  management  to  the  Health  Insurance  Fund.  The  law 
divides  insured  persons  into  the  categories  of  economically  active  and  inactive,  with  the 
contribution  of  the  latter  category  being  covered  by  the  state.  Albania  has  been  working 
towards improving the management of the social insurance system, completing the database 
of  pensions  and  re-organising  and  strengthening  the  administration  of  the  social  insurance 
system. A child allowance system was introduced in March 2011 for families benefitting from 
economic  aid.  However,  the  existing  social  assistance  scheme  has  not  been  functioning 
properly, as payments to eligible families are too low to have a positive impact, especially for 
children. The Albanian pension scheme is faced with serious financial problems in terms of its 
deficit  and  the  small  number  of  contributors.  Evasion  of  social  insurance  contributions 
remains  widespread.  The  participation  of  the  economically  active  population  in  the  scheme 
has  been  low.  The  legal  framework  of  the  pension  scheme,  particularly  with  regard  to  the 
differences between genders, has not been revised.  

There has been some limited progress on anti-discrimination. The Law on Protection from 
Discrimination is largely in line with the EU acquis. However, its implementation is making 
slow  progress.  Despite  the  organisation  of  a  series  of  awareness-raising  campaigns  by  the 
Office  of  the  Commissioner  for  Protection  from  Discrimination,  general  awareness  of  its 
provisions  remains  low.  Furthermore,  these  activities  have  focused  primarily  on  the  public, 
and key professional groups remain insufficiently informed about the law.  

There  is  little  progress  to  report  in  the  area  of  equal  opportunities.  There  remains  a  gap 
between  the  legal  framework  and  the  true  level  of  equality  between  men  and  women  in 
relation to employment. Their access to entrepreneurship and loans is also inferior and there 
continues to be a significant pay gap between men and women. 

Conclusion 

Progress has been uneven in the field of social policy and employment. Some steps have been 
taken to implement legislation in the field of health and safety at work and some progress has 
been  made  in  the  areas  of  social  dialogue,  social  assistance  and  protection  reform. 
Sustainability of funding will be key to ensuring successful implementation of these reforms. 
The  labour  market  continues  to  be  characterized  by  inactivity  and  a  high  informality; 
implementation of policies also remains insufficient, particularly as regards vulnerable groups 
and social inclusion. Overall, preparations in the area of social policy and employment are not 
very advanced.  

4.20.  Chapter 20: Enterprise and industrial policy 

There  has  been  progress  as  regards  enterprise  and  industrial  policy  principles. 
Implementation of the Small Business Act advanced. The National Licensing Centre extended 
its  services  network  to  nine  cities.  Procedures  related  to  doing  business  were  further 
simplified  in  the  fields  of  public  procurement  and  taxation.  Work  on  regulatory  reform 
continued,  with  the  establishment  of  a  regulatory  impact  assessment  system  (RIA  Light) 
which was considered more appropriate to the circumstances of the country.  

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A  Business  Innovation  and  Technology  Strategy  for  the  period  2011-2016  was  approved  in 
February  2011.  The  strategy  provides  for  the  establishment  of  a  Business  Relay  and 
Innovation  Centre  (BRIC)  as  part  of  the  Albanian  Investment  and  Development  Agency 
(AIDA).  BRIC  will  serve  as  the  main  mediator  and  facilitator  to  promote  innovation  and 
technology  development  in  business  and  to  liaise  with  the  Technology  and  Innovation 
Agency, the National Agency of Information Society, universities and centres of excellence. 
Both  BRIC  and  AIDA  became  operational  in  June  2011.  There  has  been  no  progress  as 
regards transposition of the directive on late payment. 

In the field of enterprise and industrial policy instruments, progress was made as regards 
access  to  finance  for  SMEs  through  a  credit  support  scheme  financed  by  the  Italian 
government,  the  European  Fund  for  Southeast  Europe  and  the  setting  up  of  the  Credit 
Guarantee  Scheme  for  SMEs.  An  agreement  was  signed  in  April  2011  with  a  group  of  six 
second-tier banks to facilitate the access by businesses to the € 2.5 million Credit Guarantee 
Scheme.  

Albania  participates  in  the  European  Network  of  Female  Entrepreneurship  Ambassadors 
initiative financed under the Competitiveness and Innovation Programme. 

As regards sector policies, the Council of Ministers and the Minister of Economy approved 
new secondary legislation on mining. A new mining strategy was adopted in July 2011. 

Conclusion 

There  was  some  progress  on  simplifying  the  regulatory  framework  for  business  and  on 
facilitating  access  to  finance  for  SMEs.  Institutions  have  been  established  to  facilitate 
innovation and technological development. Preparations are moderately advanced. 

4.21.  Chapter 21: Trans European Networks 

In the area of transport networks, Albania made some progress. It continued to participate 
actively in the South East Europe Transport Observatory and to implement the Memorandum 
of  Understanding  on  development  of  the  South  East  Europe  Core  Regional  Transport 
Network.  

As  regards  road  network  infrastructure,  Albania  is  nearing  the  completion  of  its  major  road 
corridors,  thereby  making  a  major  contribution  to  the  development  of  the  infrastructure 
networks  in  the  Balkans  with  a  view  to  their  future  integration  into  the  Trans-European 
Transport Networks. Work on the north-south corridor of around 400km between the borders 
of  Greece  and  Montenegro  has  progressed.  The  highway  linking  Kosovo  to  the  north-south 
corridor and the port of Durres is now open. However, insufficient road maintenance remains 
a concern. 

As regards rail network infrastructure, there is no progress to report.  

Port infrastructure is currently being improved. The port terminal building in Durres is being 
upgraded and there are preparations for extending the wharfs. The port infrastructure of Vlora 
is being rehabilitated. The port of Durres and the private port of Vlora, Petrolifera, are now 
connected  to  the  rail  network.  There  are  preparations  for  improving  the  wharf  at  Shengjin 
port. A Coastal Ports Strategy has been drawn up which recommends that heavy commercial 
port activities in Durres City should be moved to Porto Romano.  

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As regards energy networks, there remain limitations as regards interconnection. A new 400 
kV  Overhead  High  transmission  Line  (OHL)  for  interconnection  with  Montenegro  became 
operational  in  January  2011.  Preparations  for  the  construction  of  the  OHL  Elbasan-Tirana 
have advanced. There were no developments with regard to the development of a natural gas 
strategy. 

Conclusion 

Overall, some progress was made in the area of trans-European networks. However, the rail 
transport  sector  remains  underdeveloped  and  further  efforts  are  required  as  regards 
maintenance of the transport infrastructure 

4.22.  Chapter 22: Regional policy and coordination of structural instruments 

Limited  progress  has  been  made  as  regards  the  legislative  framework.  Though  it  is  not 
required  by  EU  acquis,  a  law  on  regional  development,  which  is  intended  to  lay  the 
foundation for domestic regional development policy, is under preparation. The government 
adopted  the  division  of  Albania  into  three  regions  for  statistical  purposes  according  to  the 
criteria of the EU's Nomenclature of Territorial Units for Statistics (NUTS 2).  

There are some developments to report in the institutional framework. The bodies involved 
in the implementation of IPA Component I were legally established. They have the minimum 
required  staff  and  have  received  extensive  training.  In  addition  to  the  legal  basis  for  the 
structures of IPA components III and IV adopted in 2010, the Albanian authorities adopted in 
January  2011  a  decision  to  put  in  place  structures  for  IPA  component  II.  As  for  IPA 
component IV preparations, there was very limited progress. A clear definition of the future 
composition of the operating structure is missing. 

With regard to administrative capacity, some progress has been made and most of the key 
staff dealing with IPA Components III and IV are also involved in the implementation of IPA 
component  I.  Nevertheless,  there  is  a  need  to  build  up  further  adequate  administrative 
capacity, particularly in line ministries. A workload analysis in line ministries has still to be 
carried  out  in  order  to  assess  the  staffing  requirements  for  the  implementation  of  IPA 
components  II,  III  and  IV.  The  Central  Contracts  and  Finance  Unit  (CFCU)  has  not  yet 
recruited the minimum number of staff required for the implementation of IPA component I. 
A  workload  analysis  has  yet  to  be  carried  out  in  order  to  assess  the  necessary  staffing 
requirements  within  the  CFCU  as  regards  their  involvement  in  the  implementation  of  IPA 
components II, III and IV.  

Training events on financial management, procurement, irregularities and audit were held for 
staff of the CFCU, National Fund and the Audit Authority. Harmonisation of the procurement 
legislation  with  EU  requirements  regarding  the  tendering  process  is  a  precondition  for  an 
effective financial control. A training needs' assessment has been initiated which is designed 
to lead to the drawing up of training plans for 2011 and 2012.  

On  programming,  some  progress  was  made.  The  draft  Strategic  Coherence  Framework 
document  was  prepared  and  was  submitted  to  the  European  Commission  for  comments  in 
February 2011. The draft Operational Programmes for IPA components III and IV have been 
prepared and were sent to the European Commission for comments in April 2011. An ex-ante 
evaluation of these Operational Programmes is ongoing. The quality of the draft programming 
documents does not fulfil yet the IPA III and IV requirements. Involvement of social partners 

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in  the  process  and  implementation  of  the  partnership  principle  have  been  limited  for 
component IV. Efforts to establish and develop a related pipeline of projects should overall be 
strengthened. 

With regard to monitoring and evaluation, there is limited progress to report, given that the 
national  systems  and  mechanisms  to  measure  the  quality  and  impact  of  development 
programmes are currently being put in place. 

Some  progress  can  be  reported  in  the  area  of  financial  management  and  control.  The 
Minister  of  Finance  approved  the  Regulations  of  the  Audit  Authority  (AA).  The  approved 
recruitment  plan  of  the  AA  provides  for  the  recruitment  of  5  additional  inspectors  in  2011. 
The current audit staff of the AA are either certified or going through the certification process.  

Conclusion 

Overall, there has been limited progress in the area of regional development and coordination 
of  structural  funds.  Considerable  efforts  are  needed  in  order  to  establish  the  necessary 
institutional  and  administrative  capacity  and  to  develop  a  mature  pipeline  of  projects  in  the 
area of regional development. Preparations in this area are still at an early stage. 

4.23.  Chapter 23: Judiciary and fundamental rights (see also Political criteria) 

There has been some limited progress in completing the legal framework for judicial reform. 
A Judiciary Reform Strategy and Action Plan, consulted with a broad group of stakeholders 
were  adopted  in  July.  They  form  a  good  basis  for  reform  efforts.  Implementation  is  only 
starting;  it  will  require  the  allocation  of  adequate  human  and  financial  resources  as  well  as 
sound inter-institutional cooperation.  

Regarding the independence of the judiciary, no progress was made. The independence of the 
High  Court  needs  to  be  guaranteed,  including  through  a  revision  of  the  current  system  of 
appointments  in  order  to  avoid  politicisation.  The  neutrality  and  independence  of  the 
Constitutional  Court  needs  to  be  guaranteed,  including  through  a  proper  process  for  the 
appointment and hearing of judges in Parliament, free from political influences.  

In relation to accountability in the judiciary, the full immunity enjoyed by judges remains one 
of the main factors obstructing investigation into possible cases of corruption in the judiciary. 
Widespread  corruption  is  a  key  factor  hampering  the  accountability  of  the  judiciary.  The 
Ministry  of  Justice  (MoJ)  and  the  High  Council  of  Justice  (HCJ)  have  adopted  a 
Memorandum of Understanding to address the overlap of inspection competences between the 
inspectorates of the two institutions, as a transitory measure before a new HCJ law is adopted. 

Regarding  the  efficiency  of  the  judiciary,  some  limited  progress  was  made.  The  HCJ 
introduced  changes  to  the  system  of  evaluating  judges  and  made  improvements  in  the 
reasoning of appointment decisions; in addition, the Commission on transfers, promotion and 
appointments of judges was created. However, the effectiveness of the new evaluation system 
needs  to  be  verified  in  practice.  Reforms  of  the  law  on  the  High  Court  aimed  at  improving 
efficiency  are  delayed.  Working  conditions  in  courts  are  generally  still  poor  and  hearings 
often  take  place  in  judges'  offices,  which  hampers  transparency  and  efficiency.  The  yearly 
budget for the judiciary remains insufficient.  

Court management remains poor due to a lack of human and financial resources, in particular 
in first instance district courts. The backlog of court cases is still problematic. Unreasonable 

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delays  in  court  cases  due  to  postponement  of  court  proceedings  because  of  the  absence  of 
lawyers  or  judges  remain  a  matter  of  serious  concern.  A  computerised  case  management 
system and random allocation of cases in criminal and civil procedures are in place in most – 
but not all – judicial offices. 

A  new  law  on  'mediation  in  conflict  resolution'  and  relevant  by-laws  in  line  with  the  EU 
standards  were  approved  in  February  2011.  However,  important  legislation  –  requiring  a 
three-fifths  majority  vote  in  Parliament  -  is  pending  adoption,  such  as  the  law  on 
administrative  courts  and  amendments  to  the  criminal  code.  Further  important  legislation 
requiring a three-fifths majority vote such as the law on judicial administration and the law on 
the National Judicial Conference still need to be prepared and brought to Parliament. 

Enforcement of court decisions is weak, in particular in cases where state institutions are the 
defendants. The new private bailiff system has started to function but improvements to case 
management for bailiffs are needed. 

Some  progress  was  made  with  regard  to  the  government's  policies  to  fight  corruption.  In 
June  2011,  a  new  anti-corruption  action  plan  for  the  period  2011-2013,  which  includes 
improved  individual  action  plans  for  government  ministries  and  agencies,  was  adopted. 
Implementation of previously adopted action plans has continued. 

As  regards  the  legal  framework,  there  was  some  progress  made  in  implementing 
recommendations of the Group of States against corruption (GRECO) related to the issue of 
incriminations and political party financing. Recommendations regarding incriminations were 
partly  implemented  and  all  but  one  of  the  recommendations  regarding  political  party 
financing were implemented. 

In  June  2011,  rules  of  procedures  on  the  functioning  of  the  inter-ministerial  working  group 
(IWG), the inter-ministerial Technical Group and the Technical Secretariat of the IWG were 
adopted by the IWG with the aim of defining a clearer distribution of responsibilities between 
relevant bodies and improving the coordination of the anti-corruption strategy. A new internal 
control department was established in the General Directorate of Customs. In addition, inter-
institutional  cooperation  was  improved  by  the  signing  of  memoranda  of  understanding 
between both the Department of Internal Control and Anti-Corruption (DIACA) and the High 
Inspectorate for Declaration and Audit of Assets (HIDAA) with the High Council of Justice 
(HCJ) and an Anti-Corruption NGO. Some limited awareness raising measures were initiated. 

There are shortcomings in the proposed mechanisms as well as in the administrative capacity 
of relevant institutions which should ensure proper monitoring of the implementation of the 
anti-corruption action plans. The DIACA, in particular, was not sufficiently strengthened and 
its  ability  to  effectively  coordinate  anti-corruption  policies  remains  limited.  Corruption 
reporting and statistics in particular remain insufficient. 

A  number  of  investigation  and  law  enforcement  agencies  continue  to  suffer  from  a  lack  of 
human resources and technical infrastructure. Joint Investigative Units, although continuing to 
be  useful  instruments  for  investigating  and  prosecuting  corruption  cases,  have  insufficient 
human  resources  and  technical  equipment.  HIDAA,  as  an  important  player  in  combating 
corruption,  has  limited  resources  to  undertake  extensive  inspections  and  full  audits  of  asset 
declarations  by  officials.  Although  there  have  been  further  improvements  in  cooperation 

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between  different  agencies,  including  joint  training,  the  effective  and  timely  exchange  of 
relevant information is often lacking. 

Proactive  investigation  as  part  of  systematic,  targeted  and  threat-based  investigations  into 
possible  corruption  areas  and  cases  is  largely  insufficient  in  Albania.  A  serious  obstacle  to 
effective  and  successful  investigation  remains  the  full  immunity  of  high  level  officials. 
Immunity of high level officials is only rarely lifted and the lack of confidentiality in a case 
following the lifting of immunity seriously impedes effective and successful investigation. In 
line  with  the  recommendations  of  the  Venice  Commission,  the  limitation  of  immunity  for 
both  judges  and  MPs  requires  an  amendment  to  the  relevant  constitutional  provisions. 
Investigation into possible corruption cases is also hampered by the lack of access to different 
registries (e.g. car registry and land register) by investigation and law enforcement agencies 
and by the absence of a central register of bank accounts.  

Implementation  of  anti-corruption  measures  remains  insufficient  and  the  corruption  that  is 
present in many sectors remains a particularly serious problem. Little progress was made in 
developing  a  solid  track  record  of  proactive  investigations,  prosecutions  and  convictions  in 
corruption cases at all levels. Investigation of high level corruption cases, in particular, is rare. 

In  the  past  year,  Albania  has  further  enhanced  the  legal  and  institutional  framework  that 
regulates fundamental rights, in particular with the adoption of the Law on Protection of the 
Rights of the Child. Some important gaps remain nonetheless, particularly as regards persons 
with  disabilities  and  juvenile  justice.  In  2010,  the  number  of  complaints  received  in  the 
Ombudsman's  Office  amounted  to  1651,  which  represents  a  fall  of  54%  compared  to  the 
previous  year,  with  the  majority  of  cases  referring  to  the  Albanian  judicial  system  (10%). 
Operation of human rights institutions is hampered by the continuing vacancy of the post of 
Ombudsman  and  the  still  ongoing  recruitment  in  the  Office  of  the  Commissioner  for 
Protection from Discrimination. Moreover, the allocation of sufficient resources to ensure full 
independence of these bodies has not been guaranteed.  

As  regards  the  prevention  of  torture  and  ill-treatment,  some  progress  has  been  made  in  the 
penitentiary system, but concerns remain as regards arrest and police custody. Amendments to 
the  manual  on  the  rules  and  treatment  of  arrested  and  detained  persons  in  police  units  have 
been  drafted.  However,  the  application  of  procedural  safeguards  against  excessive  use  of 
force  by  police  officers  has  not  been  guaranteed  and  cases  of  ill-treatment  during  arrest, 
interrogation  and  police  custody  continue  to  be  reported.  The  treatment  of  mentally  ill 
offenders  still  needs  to  be  improved.  The  lack  of  a  permanent  appropriate  solution  for  the 
placement of those under obligatory treatment remains a serious concern. 

Some progress has been made in the prison system and several penitentiary centres are being 
constructed  or  refurbished  with  a  view  to  approximating  with  European  standards.  Efforts 
have  been  made  to  strengthen  the  capacity  of  staff  and  increase  their  knowledge  of  human 
rights, particularly in the treatment of vulnerable groups. The probation service continues to 
be  developed  but  its  resources  to  deal  with  the  increasing  case  load  remain  limited.  Some 
older penitentiary facilities are in very poor condition; there is often no heating, even in some 
refurbished wings. Additionally, there are concerns over the fact that procedures for medical 
examinations  upon  entry  and  confidentiality  measures  for  medical  files  are  not  consistently 
followed.  

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There was limited progress regarding access to justice. The legal aid commission was set up, 
by-laws  have  been  adopted,  but  the  law  remains  to  be  fully  implemented.  Adequate 
mechanisms for the objective assignment of lawyers to the cases are still to be developed. 

There has been very limited progress in the field of freedom of expression. The application of 
the principle of proportionality of fines in cases involving media outlets or journalists is not 
systematically respected. Key legislation fostering media freedom has not been adopted and 
editorial independence continues to be hampered by political and business interests.  

Freedom of assembly and association has generally been respected but the violence which led 
to the killing of four demonstrators in January is a cause for serious concern. The Agency for 
civil society has started disbursing funds to civil society organisations. However, the capacity 
of  most  organisations  remains  weak  and  they  are  highly  dependent  on  donors.  Freedom  of 
thought, conscience and religion continues to be respected and Protestantism was recognised 
as the fifth official religion. 

There  has  been  some  progress  in  the  field  of  women's  rights  and  gender  equality.  On  the 
policy side, there have been a number of developments with the adoption in June 2011 of the 
new  national  strategy  on  gender  equality  and  the  fight  against  domestic  violence,  and  the 
establishment of the national referral mechanism on domestic violence in 17 municipalities. 
However, Albanian women continue to be discriminated against in access to certain fields and 
to be under-represented in the labour market and politics. During the local elections in May 
2011, the gender quota was not respected throughout the country.  

An important legislative step was taken to enhance the protection of children's rights with the 
adoption  of  the  Law  on  Protection  of  the  Rights  of  the  Child.  This  law  remains  to  be  fully 
implemented through effective functioning of bodies provided for in the law. Progress in the 
treatment  of  socially  vulnerable  and/or  persons  with  disabilities  is  insufficient.  The  legal 
framework  has  not  been  completed  and  implementation  of  the  national  strategy  for  persons 
with disabilities continues to be slow. 

Some  limited  progress  can  be  reported  as  regards  implementation  of  anti-discrimination 
policies. The Office of the Commissioner for Protection from Discrimination has organised a 
number  of  awareness-raising  activities  and  training  events  to  disseminate  information  about 
the  Law  on  Protection  from  Discrimination  and  the  possibilities  of  appeal  to  the 
Commissioner.  However,  the  number  of  cases  brought  before  the  Commissioner  is  low  and 
the capacity of the Office still needs to be strengthened. Additionally, overall awareness of the 
provisions  of  the  law  among  citizens  and  professionals  is  low,  especially  at  local  level. 
Albania  collects  data  on  hate  crimes  and  hate-related  incidents  but  does  not  make  it  public. 
There  were  no  convictions  for  for  crimes  related  to  racism  and  xenophobia  in  the  reporting 
period.  

Labour  and  trade  union  rights  have  generally  been  respected  and  there  have  been  efforts 
made to improve the functioning of the National Labour Council. However, clear membership 
criteria still need to be adopted. 

While  the  adoption  and  implementation  of  a  coherent  national  strategy  and  action  plan  on 
property  rights,  a  key  priority  of  the  Opinion,  is  still  pending,  fragmentation  of 
responsibilities and lack of coordination between the different institutions hampers effective 
policy implementation and creates legal insecurity and a systemic risk of corruption. 

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The legal framework for respect for and protection of minorities and cultural rights has not 
been  enhanced.  Although  inter-ethnic  relations  remain  good  overall,  there  has  been  some 
deterioration  in  the  climate  for  minorities,  which  can  be  linked  to  the  preparations  for  the 
upcoming  population  census,  which  will  include  optional  questions  on  ethnic  origin  and 
religious  affiliation.  The  State  Committee  for  Minorities  remains  weak  and  the  distinction 
between  different  defined  groups  still  leads  to  some  differentiation  in  practice.  There  have 
been  positive  initiatives  to  foster  education  of  Roma,  although  this  community  continues  to 
face  very  difficult  living  conditions  and  frequent  discrimination.  Implementation  of  policy 
tools in this field is slow. 

New Internal Rules for Data Protection and Public Security were approved by the Ministry of 
Interior aiming define the procedures for the protection of personal data managed by the State 
Police.  The  Commissioner  for  Data  Protection  has  continued  implementing  the  Law  on 
Protection  of  Personal  Data.  The  Commissioner  for  Data  Protection  has  approved  several 
instructions,  including  on  protection  of  personal  data  in  the  media.  It  has  also  signed 
cooperation agreements with the Ministries of Justice and Education and Science as well as 
the  Agency  for  Electronic  and  Postal  Communications.  However,  the  role  of  the 
Commissioner for Data Protection is undermined by the lack of systematic consultations on 
some key pieces of legislation.  

There have been no developments in relation to EU citizens'  rights; the Law on foreigners 
has not been amended to give priority to EU citizens as regards demand on the labour market. 

Conclusion  

Overall, although Albania has made some efforts to develop legislation in this field, there are 
still  significant  gaps.  Furthermore,  an  important  challenge  for  Albania  lies  in  the 
implementation  of  its  legislative  and  policy  tools,  which  remains  insufficient  overall. 
Albania's  alignment  with  European  standards  and  the  acquis  in  the  field  of  judiciary  and 
fundamental rights is at an early stage. 

4.24.  Chapter 24: Justice, freedom and security 

As regards migration, some progress has been achieved. The smooth implementation of the 
readmission  agreement  is  continuing.  In  2010,  52,919  return  cases  were  recorded,  mostly 
from  Greece.  The  Strategy  and  action  plan  for  returned  migrants  is  being  implemented 
successfully,  but  risk  analysis  and  monitoring  of  migration  flows  still  need  to  be  improved. 
The National Migration Strategy has not been fully implemented until the end of 2010. The 
legislative framework still needs to be fully aligned with the acquis. Preparations in this area 
are moderately advanced. 

In the area of asylum, some progress has been made. Until September 2011, 78 refugees and 
30  asylum  seekers  were  recognised.  The  institutional  and  legal  frameworks  are  in  place. 
However,  legislation  is  not  fully  in  line  with  acquis,  and  the  ongoing  revision  of  relevant 
legislation has not been completed. No ID documents have been provided so far to refugees 
and  persons  granted  complementary  protection.  Preparations  in  this  area  need  to  be  stepped 
up. 

Some progress has been made in the area of visa policy. Albania continues to apply a visa-
free  arrangement  for  citizens  of  certain  non-EU  countries  included  in  the  negative  list  of 

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Regulation  539/2001.  The  Albanian  visa  regime  is  not  fully  aligned  with  the  EU 
requirements. Preparations in this area need to continue. 

Visa  liberalisation  for  Albanian  citizens  was  granted  as  of  15  December  2010.  It  applies  to 
holders  of  biometric  passports  travelling  to  the  Schengen  area.  This  decision  was  based  on 
substantial progress in the area of justice, freedom and security and fulfilment of the specific 
conditions  set  out  in  the  roadmap  for  visa  liberalisation.  Implementation  of  the  visa  free 
regime  has  been  smooth  so  far.  However,  relatively  small  numbers  of  asylum-seekers  and 
irregular  migrants  were  detected  in  the  Schengen  area.  In  order  to  ensure  ongoing 
implementation  of  the  commitments  taken,  a  post  visa  liberalisation  monitoring  mechanism 
has been established. The  Commission presented its first monitoring report to the European 
Parliament and the Council in June 2011.  

There has been progress in the area of external borders and Schengen. Agreements, which 
enable  joint  and  synchronised  patrols  of  borders  by  the  police,  have  been  signed  between 
Kosovo  and  Albania  and  the  former  Yugoslav  Republic  of  Macedonia.  The  Border  and 
Migration Police (BMP), which is now a clearly structured department within the State Police 
with sufficient resources and technical equipment, has continued to receive training. Standard 
Operating  Procedures  are  now  in  place.  The  upgrading  of  infrastructure  at  Border  Crossing 
Points  (BCPs)  has  continued.  Eleven  new  BCPs  were  taken  over  by  Border  Police  and 
Customs between November 2010 and January 2011. All 24 BCPs are connected in real time 
to  the  Total  Information  Management  System  (TIMS),  providing  access  to  the  national 
database  on  travel  documents  and  wanted  persons and to the Interpol database. Albania has 
also made some progress in setting up risk assessment capacity. 

The  development  of  inter-institutional  surveillance  of  the  blue  borders  has  continued 
smoothly. A ban on speedboats is still in force. Full coverage of coastline surveillance needs 
to  be  implemented.  The  Inter-institutional  Maritime  Operations  Centre  needs  the  relevant 
financial allocations to ensure its operation. 

The BMP has limited access to the MEMEX criminal intelligence information system. Further 
deployment  of  this  system  to  BCPs  is  necessary  in  order  to  increase  the  development  of 
intelligence-led  policing.  BMP  threat  assessment  capacities  also  need  to  be  strengthened. 
Further joint efforts are needed to combat all types of cross border crime, including trafficking 
of  stolen  vehicles.  Capacities  for  green  border  surveillance  and  inland  control  need  to  be 
improved. Preparations in this area are on track. 

There  has  been  some  progress  in  the  area  of  judicial  cooperation  in  civil  and  criminal 
matters. As regards judicial cooperation in criminal matters, Albania signed and ratified the 
Third  Additional  Protocol  of  the  European  Convention  "on  Extradition",  which  sets  out  the 
rules  for  a  simplified  extradition  procedure.  Cooperation  with  Eurojust  has  been  good. 
Albania  needs  to  focus  its  efforts  in  particular  on  data  protection,  in  order  to  be  able  to 
conclude a cooperation agreement with Eurojust. Preparations in this area are advancing. 

There  has  been  some  progress  in  the  field  of  police  cooperation  and  the  fight  against 
organised  crime,  the  latter  being  among  the  key  priorities  of  the  Commission's  Opinion. 
Cooperation  agreements  on  exchange  of  information  were  signed  with  the  UK  and  Italy. 
Albania has increased the confiscation of criminal assets. The Agency for the management of 
confiscated assets has started to auction such assets. The use of undercover agents and special 
investigative  measures  has  also  increased.  The  legal  framework  in  place  needs  to  be 
implemented, in particular since the entry into force of the so-called "anti-mafia" law.  

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The police need to increase their capacity to provide reliable evidence for tracking suspicious 
transactions. Common standard operating procedures between police and prosecution need to 
be developed in order to further enhance cooperation and trust between them. By-laws of the 
judicial police law are adopted and need to be implemented.  

The increased use of the MEMEX criminal intelligence system has improved data exchange 
within the Albanian State Police. There has been progress on the encoding of archive data. At 
the same time, it remains incomplete. The system contains police data, but not information on 
investigations  led  by  the  prosecution  service.  However,  line  intercepts  and  the  use  of 
undercover agents are limited to the central level. Intelligence gathering capacities need to be 
increased in order to improve the quality of evidence. A reliable system for reporting statistics 
is  needed.  There  is  no  reliable  call-handling  system  in  place.  A  sound  case  management 
system needs to be developed for the law enforcement bodies.  

The  operational  capacities  of  the  forensic  laboratory,  covert  policing  and  witness  protection 
services need to be further supported. Regarding public order, it is necessary to develop the 
reporting  capacities  of  front-line  officers  and  to  further  empower  inspectors  and  chief 
inspectors in order to increase the number of proactive investigations.  

Regarding  human  resources,  a  diversity  strategy  has  been  approved.  The  number  of 
policewomen  occupying  high  ranking  position  was  however  not  increased.  Transfers  lack 
transparency and  are  often not  merit-based. The Resource Management Information System 
needs to be further exploited and its maintenance needs to be guaranteed. The link between 
career development and training events across police services needs to be strengthened.  

Trafficking  in  human  beings  is  still  an  area  of  concern.  The  Office  of  the  National  anti-
Trafficking Coordinator has increased its commitment, and policy and operational measures 
have  enhanced  the  identification  and  protection  of  trafficking  victims.  In  February  2011,  a 
National  Action  Plan  for  combating  human  trafficking  was  adopted.  Moreover,  the 
government  has  started  providing  some  financial  support  to  shelters  supporting  victims. 
Albania remains a country of origin for trafficking for the purposes of sexual exploitation and 
forced labour. 

A multidisciplinary approach to address trafficking in human beings has to be implemented. 
Identification of victims needs to be improved, and all actors likely to come in contact with a 
victim  of  trafficking  need  to  be  properly  trained.  An  effective  and  functioning  National 
Referral Mechanism to protect, assist and support victims of trafficking, especially children, is 
crucial in this regard. Overall progress has been achieved in this area, but the capacity of the 
law enforcement agencies and international cooperation need to be considerably reinforced. 

An  amendment  to  the  law  against  money  laundering  was  adopted  in  March,  taking  into 
account important MONEYVAL recommendations, and improving the capacity for detection 
of  suspicious  bank  transactions.  Cooperation  in  combating  money  laundering  needs  to  be 
enhanced between the institutions, and further efforts are needed in order to address the low 
level  of  reporting  of  suspicious  transactions  by  the  banking  and  non-banking  sectors. 
Implementation  of  the  existing  legal  framework  has  to  be  stepped  up  and  the  IT  tools  and 
expertise  of  the  relevant  agencies  need  to  be  strengthened.  The  quality  of  Suspicious 
Transaction  Reports  continues  to  present  a  challenge.  The  capacities  of  law  enforcement 
authorities to investigate and sanction money laundering and financial crime remain weak.  

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Albania  has  been  active  in  international  police  cooperation.  Cooperation  with  Europol  has 
been good. A secure line between Albania and Europol has been put in place since June 2011. 
Further  efforts  on  personal  data  protection  are  needed,  in  order  for  Albania  to  be  able  to 
conclude  an  operational  agreement  with  Europol.  Overall,  preparations  in  this  area  are 
advancing, but increased efforts are needed in order to develop threat assessment techniques, 
proactive  investigations,  and  to  build  up  a  consistent  track  record  of  investigations, 
prosecutions and convictions. 

There  has  been  some  progress  in  the  fight  against  terrorism.  In  January  2011,  Albania 
became a member of the regional initiative for international police cooperation for the fight 
against terrorism. Preparations in this area are moderately advanced.  

There has been some progress in the cooperation in the field of drugs. Cooperation with the 
European Monitoring Centre for Drugs and Drug Addiction has improved, with the launch of 
a survey on drugs and alcohol consumption.  

Some efforts have been made in the investigation and prosecution of drug trafficking cases, 
and the authorities are attentive to the issue of drug cultivation. Cooperation with foreign law 
enforcement agencies is good. The production and trafficking of drugs continue to be issues 
of  concern.  Albania  is  still  the  main  producer  of  cannabis  in  the  region.  There  is  concern 
about  the  decrease  in  drug  seizures  compared  to  previous  years.  Further  development  of 
investigative  methods  is  required  in  order  to  conduct  complex  investigations.  The  national 
drug  strategy  expired  at  the  end  of  2010.  Administrative  capacity  to  implement  the 
forthcoming strategy needs to be further developed. Preparations in this area are moderately 
advanced. 

There has been some progress in the area of customs cooperation. The Directorate General 
for Customs continued its good cooperation and exchange of information with its counterpart 
structures in the region, in the EU and elsewhere. There has been an increase in the capacity 
to  detect  and  prosecute  fraud  and  smuggling  of  illegal  goods.  More  systematic  use  of 
performance indicators and  risk assessment  needs to be  developed. Preparations in this area 
are progressing. 

For measures against counterfeiting of the euro, see Chapter 32 - Financial control.  

Conclusions 

Albania has made progress in the area of justice, freedom and security. Visa-free travel to the 
Schengen area entered into force in December 2010 for citizens holding biometric passports. 
Progress  has  been  made  on  fighting  organised  crime,  notably  through  good  international 
cooperation  and  implementation  of  the  'anti-mafia'  law  including  confiscation  of  criminal 
assets.  Efforts  need  to  be  maintained  for  the  effective  implementation  of  the  legislative 
framework and in strengthening the fight against organised crime, which is a key priority of 
the  Commission's  Opinion.  This  includes  the  building  up  of  a  credible  track  record  of 
proactive  investigations,  prosecutions  and,  where  appropriate,  convictions.  Measures  to 
increase  the  expertise  and  empowerment  of  investigators  and  the  cooperation  of  law 
enforcement agencies need to be actively pursued. The fight against drug trafficking, money 
laundering, trafficking in human beings and protection of its victims must be intensified and 
conducted  systematically,  and  the  legal  framework  for  the  confiscation  of  criminal  assets 
systematically enforced.  

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4.25.  Chapter 25: Science and research 

In the area of research policy, the Business Innovation and Technology Transfer Strategy for 
the period 2011-16 was approved with the aim of increasing the capacities of Albanian SMEs 
to  develop,  use,  adapt  and  commercialise  technology  which  contributes  to  the  Innovation 
Union. The Agency for Research, Technology and Innovation (ARTI), established in 2010, is 
now operational.  The level of investment in research is still very low (estimated at 0.2% of 
GDP in 2010).  

With regard to Albania's participation in the 7th EU research framework programme (FP7), 
ARTI  has  increased  its  capacities  and  also  raised  awareness  and  shared  information  on 
participation in research programmes with the EU and other international partners. ARTI has 
organised  training  sessions,  workshops  and  FP7  information  days,  and  e-communication 
channels have also been used for dissemination purposes.  

Administrative  capacity  has  been  improved  by  the  appointment  of  National  Contact  Points 
(NCPs) and representatives in most FP7 management committees. The NCPs have taken part 
in several network events and training sessions organised by the European Commission.  

The number of submissions has increased, but the number of successful FP7 projects funded 
is  still  low.  Albania  should  continue  its  efforts  in  implementing  the  Memorandum  on 
Association to the FP7 and in closely monitoring its participation. Further efforts are required 
in  particular  with  respect  to  human  capital  building  (Marie  Curie  Actions),  involvement  of 
SMEs in research and innovation, and scientific excellence in general.  

ARTI  became  a  member  of  the  Central  and  South-Eastern  Europe  Network  for  Research 
Innovation and Business that aims to encourage and facilitate cooperation among private and 
public  institutions  focusing  on  research  and  development  within  and  outside  the  EU.  ARTI 
also  became  a  member  of 
the  European  Association  of  Research  Managers  and 
Administrators  (EARMT).  As  part  of  the  European  Research  Infrastructure  Consortium 
(ERIC), Albania is establishing the LIFE-WATCH national centre.  

As regards integration into the European Research Area (ERA), the implementation of the 
National  Strategy  on  Science,  Technology  and  Innovation  (STI)  2009–2015  has  been  rather 
slow.  The  establishment  of  centres  of  excellence  is  still  under  consideration  and  only  very 
limited  action  has  been  taken  to  improve  mobility  of  scientists.  The  database  of  scientists 
working  in  the  country  has  been  updated,  but  the  database  of  Albanian  scientists  working 
abroad still needs to be set up. Albania has nominated its observer delegates to all the ERA 
governance  bodies,  but  is  not  attending  on  a  regular  basis  due  to  lack  of  administrative 
capacity.  The  amount  of  investment  in  research  is  difficult  to  monitor  due  to  the  lack  of 
reliable statistics on science and technology. 

Conclusion 

Overall, Albania has done a great deal to increase research cooperation with the EU and other 
stakeholders,  but  has  not  taken  sufficient  measures  to  strengthen  the  research  capacity  at 
national  level.  With  the  establishment  of  ARTI,  the  necessary  administrative  capacity  to 
participate  in  FP7  has  been  improved.  Concerted  efforts  are  required  in  order  to  facilitate 
Albania's integration into the European Research Area by, amongst others, increasing public 
and private sector investment in research and strengthening human capital. A start should be 
made on preparations to contribute to the Innovation Union. 

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4.26.  Chapter 26: Education and culture 

There has been some progress in the area of education, training and youth. There have been 
further developments in the area of teacher training, with the accreditation of certified training 
agencies.  The  National  Inspectorate  for  Pre-university  Education  has  begun  to  carry  out 
inspections  of  pre-university  education.  A  National  Examination  Agency  was  established  to 
provide  assistance  and  evaluate  the  management  of  the  national  examinations.  It  is  also 
responsible  for  the  collection  of  data  for  the  2012  Programme  for  International  Student 
Assessment  (PISA).  Albania's  participation  in  the  latest  PISA  helps  to  identify  gaps  in  the 
education reform.  

The  amendments  to  the  Law  on  Vocational  Education  and  Training  (VET)  were  adopted, 
aiming  to  approximate  EU  standards  regarding  formal  and  non-formal  VET,  life-long 
learning,  teacher/trainer  licensing,  and  post-secondary  education.  The  newly  developed 
curricula for VET provide for increased flexibility, geared to the specific needs of vulnerable 
categories of students.  

The  law  on  the  Albanian  Qualification  Framework  was  adopted  and  some  measures  were 
taken  to  implement  it.  The  National  Council  was  mandated  to  be  an  advisory  body  for  the 
the  Qualification  Framework 
implementation  of 
Implementation  Unit  was  established.  There  has  been  some  progress  as  regards  the 
institutional framework for the accreditation of private higher education institutions.  

the  Qualification  Framework  and 

Albania  began  participating  in  the  EU  Programme  "Europe  for  Citizens".  It  organized 
information  days  and  workshops  in  order  to  increase  the  so  far  limited  participation.  The 
promotion of opportunities under the Youth in Action Programme has been stepped up. There 
has  been  increased  dissemination  of  information  for  EU  programmes  in  the  field  of  higher 
education, namely Erasmus Mundus, Jean Monnet, Marie Curie and Tempus. Further capacity 
building is necessary to increase the number of successful applications for Tempus funds. 

In the area of culture, a new strategy on cultural heritage has been adopted.  

Conclusion 

Overall,  some  progress  was  made  in  aligning  with  European  Standards  in  the  area  of 
education, in particular in the framework of the development of VET. Efforts are still needed 
to maximise the benefits that can be drawn from the programmes opened to Albania to further 
reforms,  in  particular  in  higher  education.  Good  governance  capacity  continues  to  need 
attention, in order to ensure efficient management of decentralised programmes in the field of 
education and training.  

4.27.  Chapter 27: Environment 

As regards environment, there has been some progress in the area of horizontal legislation. 
The Law  on Environmental Protection and the new Environmental Impact Assessment Law 
have been adopted. The Law on Environmental Permitting was also adopted, but the referral 
to some provisions under the National Licensing Centre raises concern as to the conformity to 
European  Standards.  Transposition  of  the  legislation  on  strategic  environmental  assessment 
has not progressed. There was no progress in the areas of access to justice and facilitation of 
public participation, which remains rather weak. 

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There has been no progress as regards air quality. Air quality is monitored in all main cities, 
but  poor  methods  and  equipment  do  not  provide  consistent  data.  A  new  Tirana  air 
management  plan  has  been  prepared  with  the  help  of  an  EU  project  for  the  Ministry  of 
Environment, but has not yet been adopted by the Municipality of Tirana.  

Some  progress  was  made  on  waste  management.  A  National  Waste  Strategy  was  adopted. 
However, the Law on Waste Management is not yet adopted. There is no procedure in place 
for the management and control of landfills and uncontrolled dumpsites remain the main place 
for  waste  disposal.  The  implementation  of  the  decision  to  allow  the  import  of  waste  for 
recycling purposes will have to be carefully monitored by the authorities. 

There has been no progress in the area of water quality. Transposition and implementation of 
key  EU  water  legislation  is  at  an  early  stage.  The  National  Strategy  for  Water  Supply  and 
Sewage and the Water Law has not yet been adopted. Centralised wastewater collection only 
exists  in  bigger  cities.  There  are  only  two  operational  wastewater  treatment  plants  in  the 
country  at  the  moment.  Four  new  plants  have  been  completed,  but  are  not  yet  operational. 
There is still no plan to identify sensitive areas and assess their water quality, including the 
quality of waste water discharged by industrial plants.  

A modest progress can be reported in the field of nature protection. Two new protected areas 
were  established  in  2010,  increasing  the  proportion  of  total  national  territory  covered  by 
protected areas from 12.57% to 13.17%. No new developments however can be reported on 
transposition  and  implementation  of  the  EU  nature  legislation  and  on  preparations  for  the 
establishment of the NATURA 2000 network. 

There was some progress in the area of industrial pollution control and risk management. The 
transposition of the Integrated Pollution Prevention Control and the Large Combustion Plants 
Directive progressed with the new Law on Environmental Protection. 

There is no progress to report as regards environmental noise policies.  

There has been some progress regarding civil protection, where Albania is working with the 
support of a number of donors on the introduction of a central emergency call number, as well 
as on flood prevention and control measures. 

Regarding  climate  change,  Albania  made  limited  progress  on  general  policy  development. 
Albania  does  not  have  a  National  Climate  Change  Strategy  to  address  mitigation  and 
adaptation challenges. Climate awareness at all levels is poor.  

At  the  international  level,  Albania  has  aligned  with  the  Copenhagen  Accord  but  did  not 
formulated pledges for greenhouse gases (GHG) emissions' reduction. Albania is preparing its 
third  National  Communication  to  UNFCCC.  The  country  did  not  associate  with  the  EU 
position  at  the  16th  session  of  the  Ad-Hoc  Working  Group  on  Further  Commitments  under 
the  Kyoto  Protocol  and  the  14th  session  of  the  Ad-Hoc  Working  Group  on  Long-Term 
Cooperative  Action  under  the  UNFCCC.  Albania  is  continuing  to  implement  the  Montreal 
Protocol on ozone-depleting substances, although further steps to align with the EU legislation 
are still required. The country has actively participated in the climate work under the Regional 
Environmental Network for Accession. 

As  regards  the  preparation  and  adoption  of  the  climate  change  acquis,  Albania  is  at  a  very 
early  stage  and  the  government  is  currently  conducting  a  gap  analysis.  There  have  been  no 

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concrete steps to gradually take a GHG reduction/limitation target with a view to implementing 
the acquis, especially the EU Emissions Trading Scheme, and to joining the EU Effort-Sharing. 
Furthermore,  efforts  are  required  towards  convergence  with  the  EU  Monitoring  Mechanism 
Decision. 

As  regards  administrative  capacity,  the  Air,  Water  and  Climate  Change  Sector  was  set  up 
within the Ministry of Environment, with one staff member covering climate change issues. A 
system of environmental permitting  and inspection  is in place.  However, the system does not 
yet  meet  the  requirements  of  the  acquis.  Administrative  capacity,  as  well  as  technical  and 
financial  resources  for  aligning  with  and  implementing  EU  environment  and  climate  change 
policy and legislation policy and legislation, are poor.  

Conclusion 

Overall,  there  has  been  little  progress  in  legislative  developments  and  alignment  with  the 
environment acquis. Implementation and enforcement need to improve across all sectors. As 
regards climate change there was no progress on alignment and further efforts are required to 
strengthen  administrative  capacity.  Lack  of  public  awareness  and  proper  consultation  on 
legislative  initiatives  hampers  transparency  and  enforcement.  Inter-institutional  cooperation 
on  environmental  protection  and  climate  change  issues  remains  poor.  The  more  systematic 
integration of environmental aspects into other sectors, including through a process of sound 
environmental assessments at the strategic and project level, remains poor. Preparations in the 
area  of  environment  are  still  at  an  early  stage  whereas  preparations  in  the  area  of  climate 
change are at a very early stage.  

4.28.  Chapter 28: Consumer and health protection 

Some progress has been made in the field of consumer protection. The criteria governing the 
organisation and management of consumer advice centres by the consumer associations have 
been defined, while the Bank of Albania has taken decisions on transparency for banking and 
financial  products  and  services,  and  on  consumer  and  mortgage  credit.  As  regards 
enforcement  of  legislation,  the  Consumer  Protection  Commission  (CPC)  has  been  assessing 
cases of potential infringements and has taken administrative steps. Most CPC decisions have 
been enforced by operators, and the CPC has been informed of the payment of their fines. 

In  the  area  of  product-safety  related  issues,  the  Law  "On  the  general  safety  of  non-food 
products",  approximating  the  relevant  provisions  of  General  Product  Safety  Directive,  is 
under discussion in the Albanian Parliament. As regards non-safety related issues, the Law on 
consumer  protection  has  been  amended,  aiming  to  regulate  certain  aspects  of  the  consumer 
protection  area,  to  reinforce  the  independence  and  impartiality  of  the  Consumer  Protection 
Commission and to increase the level of fines.  

There has been some progress in the area of public health. The Law on Compulsory Health 
Insurance has been adopted, with the aim of improving standards of health financing.  

Some progress has been made on tobacco. An awareness raising campaign has been organised 
by the Institute of Public Health (IPH) and training curricula for family physicians have been 
prepared. A new service to encourage people to quit smoking and counselling on the risks and 
harm to alcohol users has been introduced within the Tirana Regional Health Authority. The 
current Law banning smoking in public places is still not fully implemented.  

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There  has  been  good  progress  regarding  communicable  diseases.  Immunisation  with 
pneumococcal  vaccination  has  begun,  aimed  at  reducing  childhood  infections  and  infant 
mortality. Two workshops have been organised on HPV and Rotavirus introduction vaccines, 
and the respective action plans have been prepared. Paediatricians, epidemiologists and other 
doctors  throughout  the  country  have  been  trained  on new  vaccines.  The  programme  and 
database  of  web  based  national  electronic  vaccination  registry  has  been  prepared,  including 
vaccination coverage, stock management and adverse reactions. The Influenza Lab has been 
upgraded  and  the  plan  for  vaccination  of  risk  groups  against  influenza  has  been  prepared. 
Albanian  microbiologists  have  been  trained  on  biosafety  and  biosecurity.  Hospital  infection 
control guidelines have been prepared by the Institute for Public Health in October 2010.  

As regards the International Health Regulations (IHR) implementation, the Albanian Institute 
of  Public  Health  (IPH)  has  been  established  as  a  focal  point  and  a coordinating  institution. 
Country-wide, epidemiologists, public health professionals and physicians have been trained 
on emergencies and IHR. Adoption of secondary legislation to ensure the right to health for 
persons and children living with HIV/AIDS and persons at risk is still pending. 

A  Law  for  the  transplantation  of  tissues,  cells  and  organs,  aiming  to  guarantee  quality  and 
safety standards during transplantations, has been approved.  

Progress  has  been  made  in  the  area  of  mental  health.  Administrative  capacity  has  been 
strengthened  with  the  establishment  of  specialised  units  in  all  regional  health  departments. 
Several  fully  operational  supported  houses  and  daily  centres  have  been  created  in  Tirana, 
Shkodra  and  Vlora,  and  institutional  mental  health  care  has  also  improved.  Training  of 
general practitioners on mental health is continuing. However, more skilled staff and financial 
support will be necessary to ensure community based mental health services of high quality 
that are focused on recovery.  

Despite  a  number  of  alleviating  measures,  health  inequalities  persist.  Health  authorities  in 
Tirana  have  supported  immunisation  activities,  including  door  to  door  screening,  for  Roma 
families  and  children  as  well  as  capacity  development  of  health  care  providers  to  reach 
vulnerable  population  groups  with  immunisation  and  other  child  health  services.  However, 
there  are  still  no  reliable  data  with  regard  to  the  health  care  of  Roma  newborns  and 
breastfeeding mothers. Primary health care in general has not been accessible for all groups, 
especially marginalised and young people (young people with HIV/AIDS, young drug users 
and the Roma minority).  

The  National  cancer  control  strategy  has  been  drafted  and  reviewed  by  all  stakeholders 
involved in cancer control. IPH has performed activities in the field of assessment of primary 
health care needs, mapping of services, strengthening public health sections at local levels to 
include reproductive health, cancers and awareness raising materials. The National strategy on 
preventing and minimising the damage from alcohol and the action plan for 2011-2015 have 
been  approved.  The  Clinic  for  the  treatment  of  alcohol  addiction  has  begun  to  provide 
therapeutic  services,  and  the  first  centre  for  treatment  of  alcoholics  has  been  established  in 
Tirana. Albanian professionals operating in the addictive treatment network have been trained 
in drug demand reduction. In addition to the publication of the national drugs mapping report, 
the national centre for drug information has been reactivated.  

Conclusion 

EN 

63 

   EN 

 
Overall, some progress has been made in acquis approximation and strengthening consumer 
protection  activities,  as  well  as  in  the  area  of  public  health,  in  particular  as  regards 
communicable  diseases  and  mental  health  infrastructure.  In  general,  Albania  needs  to 
persevere with its efforts in the areas of capacity building and enforcement of legislation, as 
well as in aligning its legislation with the acquis in both areas. In the area of public health, 
further efforts are also required in order to tighten up measures against tobacco and to address 
health inequalities.  

4.29.  Chapter 29: Customs Union 

Progress  was  made  on  customs  legislation.  Albania  adopted  its  2011  customs  tariff  in  line 
with  the  SAA  obligations  and  with  the  changes  in  the  EU  Combined  Nomenclature. 
Preparations for accession to the Harmonised System Convention are ongoing. However, the 
customs  code  and  its  implementing  provisions  are  not  yet  in  line  with  EU  legislation.  The 
procedures for clearance of goods by travellers were improved, but overall further efforts are 
needed  as  regards  the  use  of  simplified  procedures  and  on  trade  facilitation,  including 
introducing  the  concept  of  authorised  operator.  The  Directorate  for  the  Protection  of 
Intellectual Property Rights (IPR) started its activities and prepared and published an on-line 
manual  and  instructions  on  IPR  protection.  However,  implementation  of  IPR  law  remains 
poor and capacity in this area is weak. The use of the transaction method in customs valuation 
rose to 85%, but further efforts to reduce the use of reference prices are still needed.  

There  was  some  progress  as  regards  administrative  and  operational  capacity.  Inter-
institutional  cooperation  improved,  particularly  with  the  police  on  stolen  cars  and  with  the 
national  agency  for  export  countries  on  dual  use  goods.  The  exchange  of  information  with 
neighbouring  countries  through  the  Systematic  Electronic  Exchange  of  Data  System  was 
introduced. There were some improvements in the IT area with the upgrading of the Asycuda 
World  system  and  with  the  purchase  of  servers  to  build  a  new  operational  centre. 
Nevertheless,  efforts  will  be  still  required  in  order  to  make  the  IT  system  fully  compatible 
with  EU  requirements.  The  infrastructure  at  border  crossing  points  improved,  but  further 
efforts are needed  in this  area. There was  a slight increase in inspections at the premises of 
economic  operators,  but  there  is  a  need  for  the  systematic  development  of  post-clearance 
controls.  

Two  new  Directorates  were  established:  one  in  charge  of  debt  and  anti-smuggling  and  the 
other  focused  on  internal  investigation  and  anti-corruption.  The  Directorate  General  for 
Customs approved an Integrity Plan and its staff received training on ethics, but further efforts 
are  still  needed  as  there  continues  to  be  a  strong  public  perception  of  corruption  in  the 
customs  administration.  A  Business  Change  Management  Plan  has  not  yet  been  adopted 
Further  efforts  are  required  in  the  field  of  human  resources  management  to  increase 
transparency  and  implement  a  system  of  formal  appraisal.  No  progress  has  been  made  as 
regards granting civil servant status to customs administration staff. The Training Academy of 
the Tax and Customs Administration is still not operational, which hinders training activities. 
The strengthening of the intelligence capability requires further attention. Risk profiles were 
updated and the rate of physical checks rate dropped to from 14% to 13%. However, there is a 
need  to  better  target  risk  profiles  and  to  improve  risk-based  controls  and  simplify  the 
procedures  applied  in  order  to  facilitate  legitimate  trade  by  reducing  physical  inspections. 
Work is in progress on implementing the development plan for the Customs Laboratory.  

EN 

64 

   EN 

 
Conclusion 

There was some progress in the area of customs union. Positive developments can be reported 
on  legislative  alignment  and  administrative  capacity,  particularly  as  regards  operational 
capacity and IT. However, further efforts are required on alignment with the EU, including on 
valuation  and  the  use  of  simplified  procedures  and  trade  facilitation.  Enforcement  capacity 
and  management  of  human  resources  remain  insufficient  and  IT  systems  are  not  fully 
compatible with EU requirements. Overall, preparations in this area are moderately advanced. 

4.30.  Chapter 30: External relations 

There  has  been  some  progress  in  alignment  with  the  acquis  in  the  area  of  common 
commercial policy. Albania continued to reduce duties in accordance with the provisions of 
the SAA and, on 1 January, full liberalisation was achieved.  

The  country  has  generally  continued  to  coordinate  with  the  European  Commission  and  to 
align with the policies and positions of the EU towards third countries and with international 
organisations,  in  particular  the  World  Trade  Organisation.  There  has  been  good  progress  in 
the implementation of WTO commitments.  

There  were  no  particular  developments  to  report  as  regards  export  credits.  Albania  made 
progress  in  the  approximation  of  the  EU  acquis  by  passing  legislation  in  February  to  allow 
full implementation of the list of dual use goods and technologies. Modest progress has been 
achieved  in  strengthening  human  resources  and  administrative  capacities  in  the  area  of 
commercial  policy.  Implementation  of  the  training  plan  on  trade  policies  and  the  EU's 
Common Commercial policies is behind schedule.  

In  terms  of  bilateral  agreements  with  third  countries,  Albania  ratified  the  additional 
protocol  for  full  liberalisation  of  trade  in  agricultural  products  within  the  Central  European 
Free  Trade  Agreement  (CEFTA).  A  free  trade  agreement  with  EFTA  entered  into  force  in 
November 2010 for Albania. In June 2011, Albania signed the Pan-Euro-Med convention on 
diagonal  accumulation  of  rules  of  origin.  Diagonal  cumulation  of  the  rules  of  origin  with 
Turkey became effective in August.  

There is no progress to report in the areas of development policy and humanitarian aid.  

Conclusion 

There has been some progress in the area of external relations. Albania signed a Free Trade 
Agreement  with  EFTA  and  Albania  plays  a  constructive  and  active  role  within  CEFTA.  It 
coordinates its position with the EU in the WTO. Institutional capacity in external relations is 
not yet sufficient. Overall, preparations in this area are moderately advanced.  

4.31.  Chapter 31: Foreign, Security and Defence Policy 

The  regular  political  dialogue  between  the  EU  and  Albania  has  continued  to  cover  foreign 
policy issues. (Concerning relations with other enlargement countries and Member States, see 
Political criteria 2.3 – Regional issues and international obligations). 

As  regards  the  common  foreign  and  security  policy  (CFSP),  during  the  reporting  period, 
Albania  aligned  itself,  when  invited,  with  64  out  of  the  67  relevant  EU  declarations  and 
Council decisions (95 % alignment).  

EN 

65 

   EN 

 
As  regards  restrictive  measures,  Albania  aligned  itself  with  most  restrictive  measures 
introduced by the Council's Decisions. 

No additional development can be reported concerning conflict prevention. 

Concerning  non-proliferation,  Albania  aligned  itself  further  with  the  acquis  by  passing 
legislation  in  February  to  allow  full  implementation  of  the  list  of  dual  use  goods  and 
technologies.  Albania  currently  holds  the  Presidency  of  the  UN  "Convention  on  the 
prohibition  of  the  use,  stockpiling,  production  and  transfer  of  anti-personnel  mines  and  on 
their  destruction".  As  regards  small  arms  and  light  weapons,  there  have  been  no  new 
developments.  Work  is  ongoing  in  order  to  establish  an  online  registry  of  weapons  and 
ammunition under the management of the State Police. The government endorsed an Action 
Plan for the Elimination of Excess Ammunition in the Albanian Armed Forces.  

The  country  continued  to  engage  actively  in  cooperation  with  international  organisations 
(UN, OSCE, Council of Europe, etc.). Albania held the Presidency of MARRI (the Migration, 
Asylum and Refugees Regional Initiative) until May. 

On  security  measures,  Albania  has  not  yet  concluded  a  security  agreement  with  the  EU  on 
exchanges and mutual protection of classified information.  

The  country  is  demonstrating  a  continuing  commitment  to  participation  in  civilian  and 
military  crisis  management  operations  in  the  framework  of  the  common  security  and 
defence policy (CSDP). The country continued to participate in the EUFOR/Althea mission 
in Bosnia and Herzegovina (71 military personnel and an 11-person explosive and ordinance 
disposal team). At the end of 2010, Albania completed its participation in the EU NAVFOR-
Atalanta Operation in Somalia.  

Conclusion 

Albania has progressed in its bilateral and multilateral relations and continues to align itself 
with the EU acquis in the field of common security and defence policy. Overall, preparations 
in this field are on track.  

4.32.  Chapter 32: Financial control 

Good progress can be reported in the area of public internal financial control (PIFC). The 
primary  legal  framework  for  PIFC  and  centralised  budget  inspection  is  now  in  place.  The 
Financial Management and Control (FMC) Law and amendments to the Internal Audit Law 
came  into  force  at  the  beginning  of  2011.  The  implementing  legislation  is  being  prepared. 
Also, the Law on Financial Inspection came into force at the beginning of 2011. The setting 
up  of  the  Public  Financial  Inspection  Directorate  within  the  Ministry  of  Finance  and 
recruitment of ad-hoc budget inspectors is under way.  

The  implementation  of  FMC  is  still  at  an  early  stage.  The  Central  Harmonization  Unit  for 
Financial Management and Control (CHU/FMC) has developed a FMC implementation plan 
for  the  public  sector  with  expert  support.  Several  awareness  and  information  seminars 
regarding  the  new  concepts  of  FMC  were  organised  at  regional  level.  Further  high-level 
awareness-raising  for  managers  and 
the 
training 
implementation  of  PIFC  are  needed.  Efforts  must  be  made  to  strengthen  the  administrative 
capacity  of  internal  audit,  the  use  of  various  audit  methodologies  and  follow-up  of  audit 
findings by management. 

initiatives  for  civil  servants  on 

EN 

66 

   EN 

 
Progress has also been made as regards external audit. The amendments to the Law on the 
State  Audit  Institution  (SAI)  to  bring  it  fully  in  line  with  INTOSAI  standards  are  under 
preparation.  The  SAI  is  gradually  moving  away  from  inspection-type  audit  work  to  proper 
financial and performance audit in line with the INTOSAI standards. A training programme 
of the SAI staff for 2011 has been prepared and several training sessions have been delivered. 
Further  improvements  are  needed  as  regards  reporting  to  the  Parliament  and  efficiency  of 
parliamentary follow-up to SAI's audit reports.  

With regard to the protection of the EU's financial interests, there is very little progress to 
report. The Public Financial Inspection Directorate which was established by the Decision of 
Council of Ministers in February 2011 will also act as the Anti Fraud Coordination Service 
and as a contact point for the European Anti-Fraud Office.  

With regard to the protection of the Euro against counterfeiting, the Albanian authorities 
continue  to  cooperate  with  OLAF,  by  actively  participating  in  the  Pericles  programme.  In 
particular  they  hosted  the  "2010  Euro  South  East  Conference"  in  Tirana  and  participated  in 
one meeting of the Euro Counterfeiting Experts Group in Brussels. 

Conclusion 

Overall,  progress  has  been  made  in  the  area  of  PIFC  and  external  audit.  Further  substantial 
efforts  are  needed  in  order  to  strengthen  the  administrative  capacity  of  all  institutions 
responsible for internal control. Amendments to the SAI Law have still to be adopted in order 
to  bring  the  legal  framework  fully  into  line  with  INTOSAI  standards.  There  is  limited 
progress in the areas relating to the protection of EU's financial interests. 

4.33.  Chapter 33: Financial and budgetary provisions 

There  have  been  no  particular  developments  as  regards  traditional  own  resources,  VAT 
resources and GNI resources. For progress in the underlying policy areas, see chapter 16 – 
Taxation, 18 – Statistics, 29 – Customs union and 32 – Financial control. .  

As regards administrative  infrastructure, institutions are in place in the underlying policy 
areas  that  indirectly  affect  the  own  resources  system.  However,  in  addition  to  further 
strengthening these institutions, a fully operational coordination structure will be required in 
order  to  ensure  the  correct  calculation,  forecasting,  collection,  payment  and  control  of  own 
resources, and reporting to the EU concerning implementation of the rules on own resources.  

Conclusion 

There is no particular progress to report under this chapter. Overall, there are no significant 
differences  between  the  systems  in  Albania  and  the  EU  in  terms  of  basic  principles  and 
institutions  for  the  underlying  policy  areas  affecting  the  correct  application  of  the  rules  on 
own  resources.  In  due  course,  a  coordinating  body  will  have  to  be  set  up  to  streamline  and 
steer pre-accession preparations in the own resources field. 

EN 

67 

   EN 

 
STATISTICAL DATA (as of 30.09.2011) 
Albania 

Basic data 
Population (thousand) 
Total area of the country (km²) 

National accounts 
Gross domestic product (GDP) (million national currency) 
GDP (million euro) 
GDP (euro per capita) 
GDP (in Purchasing Power Standards (PPS) per capita) 
GDP per capita in PPS (EU-27 = 100) 
Real GDP growth rate (growth rate of GDP volume, national currency, % change 
on previous year) 
Employment growth (national accounts, % change on previous year) 
Labour productivity growth: GDP growth per person employed (% change on 
previous year) 
Real unit labour cost growth (national accounts, % change on previous year) 
Labour productivity per person employed (GDP in PPS per person employed, 
EU-27 = 100)  
Gross value added by main sectors (%) 

Agriculture and fisheries 
Industry 
Construction 
Services 

Final consumption expenditure, as a share of GDP (%) 
Gross fixed capital formation, as a share of GDP (%) 
Changes in inventories, as a share of GDP (%) 
Exports of goods and services, relative to GDP (%) 
Imports of goods and services, relative to GDP (%) 

Industry 
Industrial production volume index (2005=100) 

Inflation rate 
Annual average inflation rate (CPI, % change on previous year) 

Balance of payments 
Balance of payments: current account total (million euro) 
Balance of payments current account: trade balance (million euro) 
Balance of payments current account: net services (million euro) 
Balance of payments current account: net income (million euro) 

EN 

Statistical Annex 

Note

2000 
3 058 
28 750 

2001 
3 063 
28 750 

2002 
3 084 
28 750 

2003 
3 103 
28 750 

2004 
3 120 
28 750 

2005 
3 135 
28 750 

2006 
3 149 
28 750 

2007 
3 153 
28 750 

2008 
3 170 
28 750 

2009 
3 185 
28 750 

2010 
: 
28 750 

Note

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 

2008 

2009 

523 043  583 369  622 711  694 098  751 022  814 797  882 209  967 670  1 089 293 1 151 020p 

3 945 
1 289 
: 
: 

4 541 
1 477 
: 
: 

4 705 
1 521 
: 
: 

5 048 
1 622 
: 
: 

5 883 
1 881 
: 
: 

6 561 
2 088 
5 000 
22 

7 168 
2 275 
5 500 
23 

7 828 
2 476 
5 800 
23 

8 870 
2 788 
6 500 
26 

8 716p 
2 728p 
6 500 
28 

4.2 
: 

7.7 
: 

: 

23.4 
6.9 
12.0 
57.6 
86.0 
37.9 
0.8 
19.6 
44.3 

2002 
: 

2002 
1.7 

5.8 
: 

7.6 
: 

: 

23.5 
8.7 
13.7 
54.0 
86.1 
40.5 
-1.8 
20.4 
45.1 

2003 
98.2 

2003 
3.3 

2002 
-444 
-1 218 
-8 
116 

2003 
-350 
-1 177 
-72 
132 

5.7 
: 

10.8 
: 

: 

22.3 
10.0 
13.9 
53.8 
89.0 
37.2 
-3.8 
22.0 
44.4 

2004 
100.2 

2004 
2.2 

2004 
-340 
-1 277 
-41 
138 

5.7 
: 

8.1 
: 

: 

20.6 
10.6 
13.8 
55.0 
88.9 
37.0 
-1.2 
22.8 
47.5 

2005 
100.0 

2005 
2.0 

2005 
-589 
-1 477 
-140 
131 

5.4 
: 

7.8 
: 

: 

19.4 
11.1 
14.3 
55.2 
87.4 
39.0 
-2.8 
24.9 
48.5 

2006 
104.4 

2006 
2.5 

2006 
-471 
-1 659 
-32 
209 

5.9 
: 

-9.4 
: 

: 

19.0 
9.4 
14.8 
56.8 
90.4 
38.7 
-2.4 
28.1 
54.8 

2007 
90.8 

2007 
3.1 

2007 
-831 
-2 104 
13 
217 

7.5 
: 

19.0 
: 

: 

18.7 
9.8 
14.9 
56.6 
89.5 
38.1 
-0.9 
29.4 
56.0 

2008 
117.9 

2008 
2.2 

2008 
-1 370 
-2 431 
69 
55 

3.3p 
: 

4.4 
: 

: 

18.8 
9.9 
14.2 
57.1 
: 
: 
: 
: 
: 

2009 
116.5 

2009 
2.3 

2009 
-1 346 
-2 304 
121 
-101 

6.7 
: 

8.0 
: 

: 

25.5 
7.8 
8.3 
58.5 
86.0 
31.7 
2.4 
17.9 
38.1 

2000 
: 

2000 
4.2 

2000 
-185 
-897 
12 
115 

7.9 
: 

30.3 
: 

: 

23.6 
7.3 
10.4 
58.6 
80.9 
38.4 
1.3 
18.4 
39.0 

2001 
: 

2001 
3.5 

2001 
-316 
-1 149 
100 
150 

68 

Note

Note

Note

2010 
: 
: 
: 
: 
: 

3.9p 
: 

: 
: 

: 

: 
: 
: 
: 
: 
: 
: 
: 
: 

2010 
139.6 

2010 
3.6 

2010 
-1 056 
-2 083 
182 
-77 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
  
  
  
  
  
  
  
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance of payments current account: net current transfers (million euro) 

of which government transfers (million euro) 
Net foreign direct investment (FDI) (million euro) 
Foreign direct investment (FDI) abroad (million euro) 

of which FDI of the reporting economy in EU-27 countries (million euro) 

Foreign direct investment (FDI) in the reporting economy (million euro) 

of which FDI of EU-27 countries in the reporting economy (million euro) 

Public finance 
General government deficit/surplus, relative to GDP (%) 
General government debt relative to GDP (%) 

Financial indicators 
Gross foreign debt of the whole economy, relative to GDP (%) 
Gross foreign debt of the whole economy, relative to total exports (%) 
Money supply: M1 (banknotes, coins, overnight deposits, million euro) 
Money supply: M2 (M1 plus deposits with maturity up to two years, million euro) 
Money supply: M3 (M2 plus marketable instruments, million euro) 
Total credit by monetary financial institutions to residents (consolidated) (million 
euro) 
Interest rates: day-to-day money rate, per annum (%) 
Lending interest rate (one year), per annum (%) 
Deposit interest rate (one year), per annum (%) 
euro exchange rates: average of period - 1 euro = … national currency 
Effective exchange rate index (2000=100) 
Value of reserve assets (including gold) (million euro) 

External trade 
Value of imports: all goods, all partners (million euro) 
Value of exports: all goods, all partners (million euro) 
Trade balance: all goods, all partners (million euro) 
Terms of trade (export price index / import price index) 
Share of exports to EU-27 countries in value of total exports (%) 
Share of imports from EU-27 countries in value of total imports (%) 

Demography 
Natural growth rate: natural change (births minus deaths) (per 1000 inhabitants) 
Infant mortality rate: deaths of children under one year of age per 1000 live births 
Life expectancy at birth: male (years) 
Life expectancy at birth: female (years) 

Labour market 
Population (15-64): total of population aged 15-64 (thousand) 
Population in economic activity (15-64): total of population aged 15-64 that is 
economiclly active (thousand) 

586 
105 
157 
0 
: 
157 
: 

2000 
-7.6 
60.2 

2000 
17.0 
94.9 
936 
1 995 
2 475 

175 
: 
24.0 
8.0 

583 
31 
231 
0 
: 
231 
: 

2001 
-6.9 
58.5 

2001 
17.2 
93.1 
1 113 
2 376 
3 069 

217 
: 
11.9 
7.8 

667 
41 
141 
0 
: 
141 
: 

2002 
-6.1 
63.9 

2002 
22.1 
112.5 
1 102 
2 430 
3 083 

302 
: 
15.0 
8.5 

767 
53 
157 
0 
: 
157 
: 

2003 
-4.9 
61.5 

2003 
25.1 
103.5 
1 033 
2 555 
3 225 

381 
: 
12.2 
8.3 

839 
61 
267 
-11 
: 
278 
: 

2004 
-5.1 
58.3 

2004 
23.4 
106.0 
1 332 
3 080 
3 942 

566 
: 
15.5 
6.6 

897 
61 
209 
-3 
: 
213 
: 

2005 
-3.5 
56.8 

2005 
25.1 
110.0 
1 801 
3 434 
4 614 

1 007 
: 
12.4 
5.1 

1 011 
43 
250 
-8 
: 
259 
: 

2006 
-3.3 
56.8 

2006 
26.2 
105.0 
1 969 
3 879 
5 415 

1 590 
: 
12.9 
5.2 

1 043 
60 
470 
-11 
: 
481 
: 

2007 
-3.5 
54.8 

2007 
26.7 
95.0 
1 963 
4 094 
6 129 

2 377 
: 
11.7 
5.7 

132.580  128.470  132.360  137.510  127.670  124.190  123.080  123.620 

: 
654 

: 
834 

: 
800 

: 
800 

: 
1 024 

: 
1 209 

: 
1 368 

: 
1 477 

2000 
1179.6 
283.1 
-896.5 
100.2 
93.1 
80.6 

2001 
1485.7 
340.5 
-1145.3 
101.5 
91.2 
80.3 

2002 
1590.2 
349.2 
-1240.9 
99.9 
92.7 
77.0 

2003 
1648.1 
395.4 
-1252.7 
98.2 
93.8 
74.3 

2004 
1849.2 
484.5 
-1364.7 
99.0 
90.9 
70.5 

2005 
2101.4 
529.1 
-1572.3 
80.3 
89.4 
67.2 

2006 
2435.0 
631.3 
-1803.7 
100.6 
88.6 
65.5 

2007 
3065.0 
786.3 
-2278.7 
98.1 
83.1 
59.9 

2000 
11.4 
11.9 
: 
: 

2000 
: 

2001 
12.5 
10.8 
: 
: 

2001 
: 

2002 
9.5 
10.2 
: 
: 

2002 
: 

2003 
9.3 
8.4 
: 
: 

2003 
: 

2004 
8.1 
7.8 
: 
: 

2004 
: 

2005 
7.2 
7.6 
: 
: 

2005 
: 

2006 
5.5 
7.4 
: 
: 

2006 
: 

2007 
5.9 
6.2 
: 
: 

2007 
: 

937 
31 
620 
-55 
: 
675 
: 

2008 
-5.5 
53.9 

2008 
34.8 
118.0 
2 303 
4 520 
6 643 

3 227 
: 
11.8 
6.9 
122.800 
: 
1 694 

2008 
3569.4 
921.1 
-2648.3 
96.0 
79.7 
60.7 

2008 
6.3 
6.0 
: 
: 

2008 
: 

Note

Note

1) 

2) 
3) 

Note

Note

Note

938 
27 
680 
-26 
: 
706 
: 

2009 
-7.0 
: 

2009 
38.3 
134.0 
2 154 
4 378 
6 599 

3 335 
: 
12.5 
6.8 
132.060 
: 
1 650 

2009 
3260.7 
779.8 
-2480.9 
97.6 
84.7 
64.9 

2009 
: 
: 
: 
: 

2009 
: 

922 
45 
818 
-10 
: 
827 
: 

2010 
-3.0 
: 

2010 
41.4 
128.0 
1 999 
4 387 
7 114 

3 506 
: 
11.3 
6.4 
137.790 
: 
1 904 

2010 
3471.7 
1169.2 
-2302.6 
98.4 
70.0 
64.6 

2010 
: 
: 
: 
: 

2010 
: 

4) 

1 283.3  1 101.1b

1 092.5 

1 089.3 

1 088.2 

1 085.4 

1 084.5  1 373.1b

1 271.4 

1 331.9 

: 

EN 

69 

EN 

 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total employment (15-64): total of population aged 15-64 that is employed 
(thousand) 
Economic activity rate (15-64): share of population aged 15-64 that is 
economically active (%) 
* Employment rate (15-64): share of population aged 15-64 in employment (%) 

Employment rate male (15-64) (%) 
Employment rate female (15-64) (%) 

Employment rate of older workers (55-64): share of population aged 55-64 in 
employment (%) 
Employment by main sectors (%) 

Agriculture 
Industry 
Construction 
Services 

Unemployment rate: share of labour force that is unemployed (%) 

Share of male labour force that is unemployed (%) 
Share of female labour force that is unemployed (%) 

Unemployment rate of persons < 25 years: share of labour force aged <25 that is 
unemployed (%) 
Long-term unemployment rate: share of labour force that is unemployed for 12 
months and more (%) 

Social cohesion 
Average nominal monthly wages and salaries (national currency) 
Index of real wages and salaries (index of nominal wages and salaries divided by 
the CPI/HICP) (2005=100) 
* Early school leavers - Share of population aged 18-24 with at most lower 
secondary education and not in further education or training (%) 

Standard of living 
Number of passenger cars per 1000 population 
Number of subscriptions to cellular mobile telephone services per 1000 
population 

Infrastructure 
Density of railway network (lines in operation, per 1000 km²) 
Length of motorways (thousand km) 

Innovation and research 
Spending on human resources (public expenditure on education in % of GDP) 
* Gross domestic expenditure on R&D in % of GDP 
Percentage of households who have Internet access at home (%) 

Environment 
* Greenhouse gas emissions, CO2 equivalent (tons, 1990=100) 
Energy intensity of the economy (kg of oil equivalent per 1000 euro GDP) 

4) 

1 068.2 

920.6b 

920.1 

926.2 

931.2 

932.1 

935.1 

1 188.3b

1 103.5 

1 147.8 

4) 
4) 
4) 
4) 

66.2 
55.1 
66.0 
44.1 

62.1b 
51.9b 
64.0b 
39.6b 

61.8 
52.1 
63.9 
39.7 

59.7 
50.7 
62.6 
39.1 

58.8 
50.3 
61.2 
38.9 

57.8 
49.7 
60.0 
38.8 

53.6 
46.2 
58.8 
38.1 

65.2b 
56.4b 
63.6b 
49.3b 

61.9 
53.8 
63.0 
45.6 

: 

: 

: 

: 

: 

: 

: 

46.6 

44.0 

4) 5)
4) 5)
4) 5)
4) 5)
6) 
6) 
6) 

6) 

6) 

71.8 
5.4 
1.2 
21.5 
16.8 
14.9 
19.3 

: 

: 

57.7b 
7.7b 
6.1b 
28.5b 
16.4 
14.2 
19.9 

: 

: 

57.7 
7.6 
6.1 
28.6 
15.8 
13.6 
19.1 

26.8 

: 

58.2 
7.2 
6.0 
28.5 
15.0 
12.9 
18.2 

: 

: 

58.5 
8.1 
5.5 
27.9 
14.4 
12.4 
17.5 

: 

: 

58.5 
7.9 
5.5 
28.1 
14.1 
12.1 
17.2 

: 

: 

58.0 
8.0 
5.7 
28.3 
13.8 
11.8 
16.8 

: 

: 

47.9 
10.4 
8.2 
33.5 
13.5b 
14.4b 
12.2b 

44.6 
9.3 
8.5 
37.6 
13.0 
12.5 
13.5 

20.1b 

27.2 

9.4b 

8.5 

61.9 
53.4 
64.3 
43.6 

48.9 

44.1 
10.0 
9.9 
36.0 
13.8 
12.2 
15.9 

27.2 

9.1 

: 

: 
: 
: 
: 

: 

: 
: 
: 
: 
: 
: 
: 

: 

: 

Note

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 

14 963.0 17 218.0 19 659.0  21 325.0 24 393.0 26 808.0 28 822.0 33 750.0

2008 
36 537.0 

2009 
40 874.0 

2010 
: 

: 

: 

11.6 

21.1 

27.8 

42.8 

53.3 

60.9 

83.1 

91.7 

109.8 

: 

: 

: 

: 

: 

: 

42.0 

39.0 

: 

: 

: 

Note

2000 
37.4 

2001 
43.6 

2002 
48.2 

2003 
56.4 

2004 
60.9 

2005 
62.2 

2006 
71.4 

2007 
75.2 

2008 
83.3 

2009 
88.2 

2010 
: 

: 

120.8 

259.4 

370.6 

403.6 

488.0 

606.5 

736.5 

935.0 

1 306.9 

: 

Note

Note

Note

2000 
13.9 
: 

2000 
3.1 
: 
: 

2000 
: 
400.5 

2001 
14.3 
: 

2001 
3.3 
: 
: 

2001 
: 
386.5 

2002 
15.0 
: 

2002 
3.0 
: 
: 

2002 
: 
356.3 

2003 
15.0 
0.0 

2003 
3.1 
: 
: 

2003 
: 
370.6 

2004 
15.0 
0.0 

2004 
3.2 
: 
: 

2004 
: 
384.0 

2005 
15.1 
0.0 

2005 
3.2 
: 
1.5 

2005 
: 
366.5 

2006 
15.0 
: 

2006 
3.1 
: 
: 

2006 
: 
328.9 

2007 
13.9 
: 

2007 
3.2 
: 
: 

2007 
: 
306.6 

2008 
13.9 
: 

2008 
3.5 
: 
3.4 

2008 
: 
: 

2009 
13.9 
: 

2009 
3.4 
: 
: 

2009 
: 
: 

2010 
13.9 
: 

2010 
: 
: 
: 

2010 
: 
: 

EN 

70 

EN 

 
  
 
 
  
  
  
  
  
  
  
  
  
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Electricity generated from renewable sources in % of gross electricity 
consumption 
Road share of inland freight transport (% of tonne-km)  

Energy 
Primary production of all energy products (thousand TOE) 
Primary production of crude oil (thousand TOE) 
Primary production of hard coal and lignite (thousand TOE) 
Primary production of natural gas (thousand TOE) 

Net imports of all energy products (thousand TOE) 
Gross inland energy consumption (thousand TOE) 
Electricity generation (thousand GWh) 

Agriculture 
Agricultural production volume index of goods and services (producer prices, 
previous year=100) 
Total utilised agricultural area (thousand hectare) 
Livestock: cattle (thousand heads, end of period) 
Livestock: pigs (thousand heads, end of period) 
Livestock: sheep and goats (thousand heads, end of period) 
Production and utilisation of milk on the farm (total whole milk, thousand tonnes) 
Crop production: cereals (including rice) (thousand tonnes, harvested production)
Crop production: sugar beet (thousand tonnes, harvested production) 
Crop production: vegetables (thousand tonnes, harvested production) 

Note

: 
: 

2000 
987 
314 
20 
12 
858 
1 845 
4.7 

: 
: 

2001 
933 
335 
15 
8 
1 001 
1 934 
3.7 

: 
: 

2002 
896 
308 
5 
8 
965 
1 861 
3.2 

: 
: 

2003 
1 012 
359 
19 
12 
1 043 
2 055 
4.9 

: 
: 

2004 
1 178 
443 
19 
9 
1 080 
2 258 
5.5 

: 
: 

2005 
1 149 
418 
15 
10 
1 130 
2 279 
5.5 

: 
: 

2006 
1 237 
500 
15 
10 
826 
2 156 
5.6 

: 
: 

2007 
1 080 
564 
15 
16 
1 020 
2 130 
3.0 

: 
: 

2008 
1 159 
578 
20 
8 
1 033 
2 119 
3.9 

: 
: 

2009 
: 
: 
: 
: 
: 
: 
5.2 

: 
: 

2010 
: 
: 
: 
: 
: 
: 
: 

Note

2000 

2001 

2002 

2003 

2004 

2005 

2006 

2007 

2008 

2009 

2010 

: 
1 144 
728 
103 
3 045 
948 
566 
42 
620 

: 
1 139 
708 
106 
2 933 
984 
503 
39 
677 

: 
1 140 
690 
114 
2 773 
1 010 
519 
39 
669 

102.9 
1 121 
684 
132 
2 919 
1 060 
489 
50 
675 

105.1 
1 122 
654 
143 
2 739 
1 064 
499 
40 
678 

101.2 
1 077 
655 
147 
2 701 
1 076 
511 
40 
685 

102.5 
1 120 
634e 
152e 
2 770e 
1 102e 
508 
: 
688 

100.4 
1 121 
577 
147 
2 729 
1 016 
494 
: 
672 

107.4 
1 146 
541 
161 
2 620 
1 040 
609 
: 
715 

: 
1 164 
494 
160 
2 540 
1 045 
: 
0 
730 

: 
: 
493 
164 
2 581 
1 070 
662 
0 
860 

7) 

: = not available 
p = provisional 
e = estimated value 
b = break in series 
* = Europe 2020 indicator 
The  balance  of  payments  sign  conventions  are  used  for  FDI.  For  FDI  abroad  a  minus  sign  means  investment  abroad  by  the  reporting  economy  exceeded  its  disinvestment  in  the  period,  while  an  entry 
without sign means disinvestment exceeded investment. For FDI in the reporting economy an entry without sign means that investment into the reporting economy exceeded disinvestment, while a minus 
sign indicates that disinvestment exceeded investment. 
Footnotes: 
1) 

Debt Outstanding Disbursed (DOD) cumulative stock covering external public debt and external publicly guaranteed debt, but excluding IMF credit. Total exports are calculated according national 
accounts concepts. 
Average weighted rate applied on new 12-month loans over the respective month, on 12-month maturity. 
Deposit interest rate represents the average weighted rate for newly accepted deposits over the respective month, on 12-month maturity. 
Change of data source in 2001 due to the change of data source; 2001-2006, administrative data (information only for the male population aged 15-59 and for the female population aged 15-54); 
from 2007 onwards, Labour Force Survey data. 
Data are provided according to Nace rev 1.1 
2000-2006, administrative data; from 2007 onwards, Labour Force Survey data. 
Including melons. 

71 

EN 

2) 
3) 
4) 

5) 
6) 
7) 

EN