Albanian Republic The Albanian Republic ( ) was the official name of Albania as enshrined in the Constitution of 1925 . Albania became a " de facto " protectorate of the Kingdom of Italy after the signing of the Treaties of Tirana of 1926 and 1927 . Albania was later declared a constitutional monarchy in 1928 . Upon its inception , the republic was under heavy influence of the Kingdom of Italy which demanded in 1925 that the two states be allied . This was done largely to increase Italy ' s influence in the Balkans but also aided both Italian and Albanian security of their interests against Greece and Yugoslavia , with which both countries had territorial feuds . Abolishing the Principality . After defeating Fan Noli ` s government . Ahmet Zogu recalled the parliament , in order to find a solution for the uncrowned principality of Albania . The parliament quickly adopted a new constitution , proclaimed Albania a republic , and granted Zogu dictatorial powers that allowed him to appoint and dismiss ministers , veto legislation , and name all major administrative personnel and a third of the Senate . The Constitution provided for a parliamentary republic with a powerful president serving as head of state and government . Ahmet Zogu was elected president for a term of seven years by the National Assembly , prior to his proclamation King of Albanians . Zogu maintained good relations with Benito Mussolini ' s fascist regime in Italy and supported Italy ' s foreign policy . He would be the only Albanian to hold the title president until 1991 . On January 31 , Zogu was elected president for a seven - year term . Opposition parties and civil liberties disappeared ; opponents of the regime were murdered ; and the press suffered strict censorship . Zogu ruled Albania using four military governors responsible to him alone . He appointed clan chieftains as reserve army officers who were kept on call to protect the regime against domestic or foreign threats . Economy . In early 1925 , began a series of developments for the economy , positive , but also negative . Began to organize a private initiatives in the field of industry , construction and transportation . In the same year was created the first coin of Albania ( Albanian Gold Franga ) . The introduction of foreign capital became the official policy of the governments of Zog I . With this , the Zog in the regim was intended to strengthen personal power , to enrich his supporters . Granting concessions of foreign capital used as a tool for providing income for the regime , in the form of loans and rent , which later was assessed as a means for overcoming the economic crisis . At this time they were created 14 new societys . Their initial capital was 7 . 6 million gold francs , about 28 % more than the capital of the societies of the period ' 21 - ' 24 . In 1928 , the number of enterprises reached 127 . Domestic capital was 6 times greater than in 1927 . In this period was achieved partial stability of the economy . Main feature of this period is the connection between Tirana government agreements with Italian financial groups to invest in the country . Thus , in 1925 between Albanian government of that time , and the Italian financial group loan agreement was signed with Italian society SVEA , where 96 . 4 % of its loans were used by the Foreign Ministry for road construction . This was not just for the country ' s economic needs , but to create the conditions for the penetration of foreign capital in our country . To increase the pace of building Roads , on June 6 , 1927 , the Foreign Ministry stripped activity works in agriculture . In 1928 , fiefdoms occupy an area of 200 , 000 hectares , of which 100 , 000 were private . Berat was the city with the largest surface fiefdoms , about 36 , 000 . At this time , the country ' s most important families were it Shefqet Vërlaci , Ibrahim Pasha , Dervish I do Biçoku , Toptanasit , Vrionasit etc . . Estate Divjaka , Karavasta and another was made Zog ' s gift . Infrastructure situation was deplorable . Roads serve only for the passage of wheelchairs . Missing bridges and had no car transport . After the First World War in Albania came 40 lorries walking speed 20 – 25 km / h . In 1926 , the number of vehicles reached 150 . Maritime transport is mainly realized by foreign companies . And mail air transport in the hands of the Italians . Trade was the main areas of the economy . During this period increased circulation of goods . Mainly exported agricultural raw materials and livestock . Many Italian companies , English , French and American began to be present in the Albanian market and through the provision of concessionary agreements or through direct investment began their activity . Such was the case SISMA Society ( Societa Italiana Sfrutamento Miniere Tanzania ) ; SEIA society ( sociate Electrica Italo - Albanese ) ; society ALBA ( Azienda LAVORI Boschi Tanzania ) ; EIAA society ( Ente Italiano Attivita Agraria ) ; SESA society , who got the concession electricity in 7 cities in Albania ; Anglo - Persian society " Oil Company " ; U . S . society " Standard Oil Company " ; Franco - Albanian union of kerosene ; German society INAG for exploitation of forests etc . . During the period 1925 - 1926 , 23 % of the territory of Albania included in the concessions granted foreign capital from the governments of King Zog . This gave a further impetus to the country ' s economy , which introduced some modest development , those were in the period 1925 - 1928 . In 1925 was created the Albanian National Bank , which was awarded the concession Italians . In the same year was established SVEA society ( Society for the Economic Development of Albania ) which would give Albania a loan worth 50 million gold francs . In 1927 , the fund was estimated at 65 million gold francs . Annual interest rate of this loan was 7 . 5 % too high and should be settled within 40 years . Guarantee that the Albanian state has to give was 8 . 5 million gold francs , or about 24 % of the state budget for the year ' 25 - ' 26 . Under these conditions Italia gained a very strong position in Albania . National Commercial Bank had anticipated capital amounted to 125 million gold francs . In this bank , the Albanian state had 49 % share , while Italy 51 % . During the ' 25 - ' 28 period , the Albanian government also significantly increased its costs . Another aspect that Italy ' s position was strengthened Maritime Trade Treaty , which gave the state the status of " most favored nation " . This legalized the Italian monopoly on foreign trade . In the period 1925 - 1928 the Albanian capital accounted for 7 - 8 % of monetary accumulations , calculated approximately . Italian penetration . In return for aiding Zogu ' s invasion , Belgrade expected repayment in the form of territory and influence in Tirana . It is certain that Zogu promised Belgrade frontier concessions before the invasion , but once in power the Albanian leader continued to press Albania ' s own territorial claims . On July 30 , 1925 , the two nations signed an agreement returning the monastery of Saint Naum on Lake Ohrid and other disputed borderlands to Yugoslavia . The larger country , however , never reaped the dividends it hoped for when it invested in Zogu . He shunned Belgrade and turned Albania toward Italy for protection . Advocates of territorial expansion in Italy gathered strength in October 1922 when Benito Mussolini took power in Rome . His fascist supporters undertook an unabashed program aimed at establishing a new Roman empire in the Mediterranean region that would rival Britain and France . Mussolini saw Albania as a foothold in the Balkans , and after the war the Great Powers in effect recognized an Italian protectorate over Albania . In May 1925 , Italy began a penetration into Albania ' s national life that would culminate fourteen years later in its occupation and annexation of Albania . The first major step was an agreement between Rome and Tirana that allowed Italy to exploit Albania ' s mineral resources . Soon Albania ' s parliament agreed to allow the Italians to found the Albanian National Bank , which acted as the Albanian treasury even though its main office was in Rome and Italian banks effectively controlled it . The Albanians also awarded Italian shipping companies a monopoly on freight and passenger transport to and from Albania . In late 1925 , the Italian - backed Society for the Economic Development of Albania began to lend the Albanian government funds at high interest rates for transportation , agriculture , and public - works projects , including Zogu ' s palace . In the end , the loans turned out to be subsidies . In mid - 1926 , Italy set to work to extend its political influence in Albania , asking Tirana to recognize Rome ' s special interest in Albania and accept Italian instructors in the army and police . Zogu resisted until an uprising in the northern mountains pressured the Albanian leader to conclude the First Treaty of Tirana with the Italians on November 27 , 1926 . In the treaty , both states agreed not to conclude any agreements with any other states prejudicial to their mutual interests . The agreement , in effect , guaranteed Zogu ' s political position in Albania as well as the country ' s boundaries . In November 1927 , Albania and Italy entered into a defensive alliance , the Second Treaty of Tirana , which brought an Italian general and about forty officers to train the Albanian army . Italian military experts soon began instructing paramilitary youth groups . Tirana also allowed the Italian navy access to the port of Vlorë , and the Albanians received large deliveries of armaments from Italy .