Albania: Political Infighting Threatens Economy

The resignation of Prime Minister Meta last week was provoked by an inconclusive power struggle in the ruling Socialist Party that's threatening to deprive Albania of much needed foreign investment.

Meta announced his resignation on January 29, claiming party leader Fatos Nano had put "destructive" pressure on him to support his election as Albanian president later this year.

"For months, my government and I have faced a campaign of attacks, slander, and irresponsible and immoral slurs initiated by the Socialist Party chairman," Meta said. He described the attacks as "unprecedented in the democratic world".

The Socialists won the last general election on June 24, 2001. The rift between the two leaders, which has polarised party divisions, started last October, a month after parliament voted to make Meta premier.

Soon after, it emerged that Nano wanted to be the president - but didn't have the complete backing of party members. Meta supporters were not keen to back the Socialist leader's candidacy, prompting Nano to launch a vicious smear campaign against them.

He accused some ministers of corruption and even described the premier's method of governing as "fascist". Nano also said Meta was appointing his supporters to top government posts to tighten his grip on power. The attacks culminated last week with Meta's resignation.

The president, who is elected by the parliament, will be voted next June. The Socialists govern in coalition with four other minor parties, whose support is necessary to find the 84 votes needed to elect the next head of state. With about 27 Socialist deputies supporting Nano and 42 backing Meta, they may hold the key.

The tensions between Nano and Meta have escalated over the last week. Their rivalry meant that the party leadership council, made up of 110 officials, couldn't agree on Meta's successor.

Meta's supporters wanted defence minister, Pandeli Majko, while Nano's faction preferred economics minister Ermelinda Meksi. Meanwhile, a third name was thrown into the ring; that of Kastriot Islami, a prominent party official close to Nano. The council will decide today, Wednesday, which of the candidates will be the new prime minister.

It's expected that Majko will be chosen as Meta has more supporters than Nano in the leadership council.

The political crisis has struck at a sensitive moment. Last June, the

European Union, EU, said negotiations on a Stabilisation and Association Agreement, SAA, would start in the first half of this year, probably in March.

But last week Brussels warned it could not fix a date until Albania had settled its political troubles.

At a recent European parliament session on Albania, MEPs poured scorn on the country's quarrelsome politicians. One Austrian MEP said they were an "an expired political class" and that "a new generation is needed".

A Belgian colleague said he would not endorse the SAA with Albania "because I would be ashamed to look my electorate into the eyes if I did so".

Austrian MEP Johan Swoda concluded ominously, "We made a mistake with

Macedonia and I do not intend to rush to make a second mistake with

Albania." The EU council of ministers did not fix a starting date for the negotiations.

To add to the country's woes, the IMF postponed a planned board meeting

this week to approve a 30 million US dollar loan over three years. This was also put on hold until the politicians resolved the deadlock.

The World Bank is additionally threatening to withhold a 70 million dollar package targeted at the energy sector, poverty schemes and financial reform. The bank's representative in Tirana, Eugene Scanteie, said, "If there is any slip-up in the preparation of these projects because of the government crisis, the funding will be in danger."

In spite of these threats, local observers hold out little hope of an

imminent end to Albania's political in-fighting. Genc Ruli, of the Institute of Contemporary Research and former finance minister, blamed Albania's "institutional weakness" for the fact that "the party crisis will continue".

The fallout from the crisis, he added, has already affected the economy. Albania's GDP in the second half of last year slowed to seven per cent - half a per cent down on anticipated growth - and the trend is expected to continue. "The first signs of inflation and monetary destabilisation are apparent," Ruli said.

Even before the political crisis peaked, the country was already in the

throes of an energy crisis. "The energy crisis remains an open problem and will have a significant impact on economic development in 2002," said Shkelqim Cani, governor of the Central Bank of Albania, said last week.

The country's best-known writer, Ismail Kadare, applauded the fact that politicians were starting to address the problem of corruption but added that "corruption, drug trafficking and violations of democracy did not all start four weeks ago".

On Monday, President Rexhep Meidani urged the Socialist Party to nominate a new premier without delay.

Meta agreed, though the broadside he aimed at his rival held out little hope of an end to Albania's internal convulsions. "It is a week since we had a government and the country needs to proceed with its reforms," he said. "Fatos Nano created this crisis, so he should leave aside his personal interests."

Llazar Semini is IWPR's editor in Albania.