ardian fullani : promoting a public debate around the new economic growth model speech by mr ardian fullani, governor of the bank of albania, at the meeting with agrobusiness and banking sector representatives, lushnja, 13 march 2014. * * * dear guests, it is a great pleasure for me to be here today to discuss one of the most important sectors of the albanian economy – agriculture. moreover, the fact that this meeting takes place in one of the areas with extraordinary potential for the development of this sector – i am referring here not only to lushnja, but the entire fier district – is very significant. i do not think i am surprising anyone, particularly those engaged daily with entrepreneurship, when i state that the recent years ’ global economic crisis had an easily recognisable impact on the albanian economy as well. the pace of economic growth has slowed markedly, particularly in the past two years. according to the latest forecasts, the albanian economy is expected to pick up slightly in the next few years due to improved monetary and financial conditions, and the fact that our trading neighbours are, similar to albania, showing the first signs of recovery after several years. however, we expect growth to remain weak for a while yet compared to the pre - crisis period. under these circumstances, the bank of albania has been promoting a public debate around the new economic growth model, even before this global financial crisis took hold. the central bank ’ s stance has been clear and transparent to the public. we have constantly stated that the main sources of economic growth in the two decades of transition are reducing markedly, and the albanian economy needs to be re - oriented towards new sectors in the very near future. the bank of albania sees agriculture – and, in a broader sense, the entire agro - business – as one of the main sectors standing at the front of this re - orientation. my presence here today, and bank of albania ’ s presence, should serve as a confirmation of our commitment to discussing the new growth model and the primary role that agriculture should play in it. * * * the albanian economy had a very difficult year in 2013. domestic demand, and consequently economic growth, hit one of the lowest levels in history. the inflation rate hit the lower bound of the bank of albania ’ s target tolerance band, while budget deficit and public debt increased considerably. the economic performance was also accompanied by uncertainties surrounding the external economy – albania ’ s trading partners in particular –,

the commitments made will be honoured ; they are convinced that the necessary measures will be taken in order to release the pledged funds. the ecb does not take a political stance on the matter. it follows rules which are transparent and public. portugal, for its part, has plunged into a political crisis following the ousting of the pro - austerity government. could it become a new greece? those two countries can't be compared. each has its own experiences. at the ecb, we respect all existing governments, as long as they implement the commitments they have made on behalf of their countries. that applies to portugal and to all the other euro area countries. bis central bankers ’ speeches is france going far enough when it comes to reforms? france is committed to implementing reforms, although i must say that the laws which have passed through parliament are often somewhat removed from what was originally announced. the macron reforms, for example, concern a much lower number of professions than initially envisaged. it's noteworthy that other european countries which are also on the path to economic reform, such as italy, are implementing institutional reforms in parallel with structural reform. is the situation in the euro area fragile enough to justify new measures by the ecb? we are waiting to see the outlook for 2017 in the updated eurosystem staff macroeconomic projections. at the last meeting in october, the governing council of the ecb agreed on the need to re - examine, in december, the degree of monetary policy accommodation. we will examine the effects of measures taken so far and decide if there is a need for further action or not. the discussion will be very detailed, and it is important that proper preparations are made. that work is currently being done by several committees made up of representatives of the national central banks and of the ecb. those experts are studying all the options. it is possible that their work could lead to recommendations being made. however, the governing council is independent and has sole authority. several central bank governors have spoken in favour of the adoption of new measures. of course, but nothing has been decided on! the discussion will take place within the governing council, not in the public arena. it is conceivable that one of the recommendations for supporting growth and inflation would be to expand the asset purchase programme launched in march, in other words, qe – a measure which can by nature be extended. however, it seems that the governing council is divided on the subject.