In the medium run, investments performance will reflect developments in internal and foreign demand performance. Given the need for a more competitive Albanian economy and its further orientation towards exports, stimulation of investment, increase of production capacities and adoption of more advanced processes and technologies should be priorities of the country’s development policies, in the macro- and micro economic aspects. Public expenditures provided a positive contribution to the aggregate demand of 2011 H1. Following the consolidated behaviour of last year, the fiscal policy was a stimulating one during this period. Public spending increased by 7.4% in annual terms, led primarily by current expenditures, with an added positive contribution of capital expenditures as well. On the other hand, budget revenues were slow, increasing by 1.1% in annual terms. The differences of growth rates for revenues and public spending materialised in the expansion of the public deficit. In GDP terms, budget deficit at the end of 2011 H1 stands at 4.1% or about 1.5 p.p. higher than a year earlier. Expanded fiscal policy was more present during the first quarter of the year, while in the second quarter it was more moderate. Revenue and spending growth rates reduced during the second quarter, leading to the need for the revision of the 2011 budget, in order to retain the parameters of public finance soundness in the short and long run. On the other hand, measures to control budget deficit through reducing public spending implies modelling the fiscal stimulus during the second half of 2011.

This requires designing policies to support the development of markets’ size and scope, removing barriers between EU capital markets, expanding sources of funding for companies, and broadening the role of the non-bank financial sector. Ultimately, a well-developed CMU will increase private risk-sharing, promote financial stability and boost economic growth. Starting in 2015, the European Commission launched a series of initiatives to stimulate the development and integration of EU capital markets. On market development, the Commission adopted a set of harmonised rules on securitisation and published its fintech action plan in 2018. Initiatives on market integration included the review of the European Supervisory Agencies and the covered bond legislative package. The former aimed to make our system of financial supervision more efficient and effective and also gave the European Banking Authority a coordinating role in the areas of anti-money laundering and terrorist financing. The latter should foster the development of covered bonds by creating a harmonised EU framework, providing a source of long-term financing for banks and supporting the real economy across the EU. Despite the efforts of policymakers and market participants, retail investors are far from having embraced investing in capital markets. While the full impact on the real economy may take time to materialise, it is concerning that the initial ambitions of the plan launched by the European 3/5  BIS central bankers' speeches  Commission towards the development of a CMU were significantly lowered to enable colegislators to reach an agreement.