This uncertainty is multidimensional and affects the private sector decisions intricately, hence making consumers and businesses reluctant to spend and invest. The uncertainty is not only related to domestic developments, but a significant part of it also originates from there. Several above-mentioned incentives – concrete-term recommitment to preserving the soundness of public finances and enhancing balance-sheet transparency in the Albanian economy – are the appropriate steps in this regard. Other incentives to reduce uncertainty would be to: •  strengthen the contingency plans and relations with international financial institutions;  •  enhance transparency and consistency of development programs, both at national and intersectoral levels;  •  strengthen the legal, regulatory and fiscal framework, and minimise their volatility;  •  improve the business climate in its relations with the tax administration and the judicial system. Taking these steps would be a significant progress towards development. 3. Third pillar: Structural reforms  The third pillar of development, i.e., the structural reforms in economy, should be stronger and deeper. Sticking to today’s agenda, I would like to say that these reforms would open the way to a healthier and more competitive economy, with a balanced development across sectors. Our resolution and success in implementing these reforms would determine the long-term development of the Albanian economy. 4. Fourth pillar: Convergence with the European Union  I think that the identification, design and implementation of the structural reform package by closely cooperating with the specialised international institutions would be productive.

The Bank of Albania, being an independent institution, responsible for the monetary policy and for the supervision and regulation of the banking system, has taken concrete actions to boost demand in the economy. We have lowered the key interest rate to record lows and are considering other spaces available in this regard. We have also supplied the banking system with the liquidity needed for a smooth functioning of the financial markets. Finally, we have introduced a new regulatory package to boost lending. Our policies have been successful in maintaining macroeconomic balances, which is also the Bank of Albania’s goal. However, their transmission to boosting economic activity requires better reflection by the banking system. The banking system has worked well to preserve its soundness. It has supported the Albanian economy in its expansion phase and has shared a part of the economic slowdown costs with it. Unlike many other experiences, the Albanian banking system succeeded in withstanding the global crisis without using any public funds. On the contrary, at the peak of the crisis, many banks managed to bring fresh capital in the country, against the setting of fiscal contraction and funds withdrawal by the European banking groups and higher non-performing loans. However, we deem that the banking system is capable of boosting lending. First, the banking system should intensify its efforts to cleanse its balance sheets through collateral enforcement and realistic assessment of borrowers’ creditworthiness.