to slower private consumption in the early months of 2010. private investments have provided a negative contribution to economic growth. the historical low of the free capacity utilization, the worsened figures of business confidence, the contraction of the import of intermediate and capital goods and the slowdown in credit suggest that investments were low during this period. on the other hand, the slight recovery of credit for investment purposes and the increase in the imports of intermediate goods in the first months of the second quarter of 2010 may signal a possible shift of this aggregate demand component in the second quarter of the present year. the public sector continued to pursue a stimulating fiscal policy in the first five months of 2010. budget deficit amounted to all 11. 6 billion, owing to the annual growth of budget revenue by 4 percent and the annual contraction of public spending by 3 percent. after careful monitoring of the current and expected economic performance and its implications for fiscal indicators, the bank of albania considers that fiscal policy should be watchful at keeping the budget deficit and public debt levels in check. keeping the budget deficit within sound parameters increases confidence in the long - term sustainability of public debt, hence lowering the risk premiums in the financial markets. in addition, the lowering of pressures in the domestic financial markets helps to keep the longterm interest rates in check, hence facilitating the private sector access to the credit market. therefore, the projected revision to the 2010 state budget needs to be based on a realistic budget revenue plan, making at the same time projections of the required correction measures for the reduction of public spending and control of budget deficit. net exports increased their positive contribution to aggregate demand in the first four months of 2010. this performance was triggered by the annual increase of exports by 47 percent, while imports were comparable to the previous year. hence, in the first four months of the present year, trade deficit narrowed further by 14 percent y - o - y. in addition to the positive impact on economic growth, this necessary correction aided the stability of the national currency. lek ’ s exchange rate was more stable and less volatile during this period. the performance of other balance of payments items in the first quarter of the present year attests to the significant reduction of foreign financing. remittances declined 6. 7 percent, hence financing only 40. 6 percent of the trade deficit. despite the positive performance of foreign direct investments, posting an annual growth of 26 percent, the surplus in capital and financial account financed only 41. 2 percent of the current deficit.

clarifying the operational cooperation protocols, in a series of central bank fields. this memorandum elevates the relations between our two countries to a new dimension. it confirms the will to elevate the level of cooperation and consolidate the ties between the two countries, providing for both institutions the necessary space for the intensification of mutual exchange of information and expertise in various fields of central banking, such as : supervision, financial stability, research, and financial education, and the regular dialogue at technical and political level. it is an important step for obtaining maximum benefits from the positive effects of integration and minimising the negative ones. 2 / 3 bis central bankers'speeches lastly, i would like to underline that the bank of albania will make maximum efforts for the cooperation in the framework of this agreement to be concrete and have a direct impact. concluding, on behalf of the bank of albania, allow me to thank once again the central bank of the republic of turkey for the continuous fruitful cooperation ; i would also like to thank, in particular, governor cetinkaya, who has honoured us today with his presence at the ceremony of signing the common memorandum. thank you! 3 / 3 bis central bankers'speeches