Conclusions on Albania-(Extract from the Communication from the Commission to the European)

Conclusions on Albania



(Extract from the Communication from the Commission to the European Parliament and the
Council "Enlargement Strategy and Main Challenges 2011-2012", COM (2011)666 final)


Albania's domestic political scene has been dominated by the continuation of the political
stalemate and the partial boycott of Parliament by the opposition. This political deadlock
dates back to the June 2009 general elections. The outcome of these elections, which were
considered by OSCE/ODIHR to meet most international standards although marked by
shortcomings, was contested by the Socialist Party. The violent incidents of 21 January 2011,
which led to the death of four demonstrators, exacerbated the climate of mistrust between the
two larger political parties and towards certain State institutions. The local elections of 8
May, as a result of the controversial vote count of misplaced ballots and contested results in
Tirana further accentuated the polarization between ruling majority and opposition. All these
events diverted political attention away from much needed EU policy reforms.
Against this background, the government made some efforts to move ahead with the EU
integration agenda and in particular to prepare an action plan to address the recommendations
of the Commission's 2010 Opinion. These efforts were mirrored by good cooperation between
the ruling majority and the opposition on the Action Plan in the parliamentary committee for
European integration and joint work to achieve agreement on necessary reforms. The efforts,
also to launch working groups on electoral reform, eventually stalled. On 5 September, the
opposition ended its boycott and returned to parliamentary work.
Overall, Albania has made limited progress in fulfilling the political criteria for membership
of the EU. Important EU-related reforms have been hampered by the political stalemate.
Progress in addressing the key priorities1 and the other challenges identified in the Opinion
has been uneven. There has been some progress on implementing measures to combat
organised crime, on improving the treatment of detained persons in prisons, and on children's
rights. However, there was only limited progress regarding the work of parliament, elections,
the judiciary, anti-corruption policy, property rights and improving the living conditions of
the Roma community. Albania will need to make considerable and sustained efforts on all
areas identified in last year's Opinion.
As regards democracy and rule of law, the continuation of the political stalemate, further
confrontational developments and increasing mistrust between majority and opposition have
negatively impacted on Albania's reform agenda. Key reform areas are still work in progress
and important pieces of legislation are awaiting adoption or finalisation.
Despite some improvements in parliamentary rules and practice and some increase of the
parliament's administrative capacities, the performance of the Parliament on legislative and
oversight functions, a key priority of the Opinion, remains insufficient. The political stalemate
has seriously hampered parliamentary work, as well as the need for sustained and constructive
political dialogue. It has also prevented the establishment of a consensus enabling the
implementation of relevant EU reforms. The opposition's partial boycott has obstructed
parliamentary business, including hampering the adoption of laws requiring a three-fifths
majority. The end of the opposition's boycott and their return to parliamentary work on 5
1 The key priorities concern the following areas: the proper functioning of parliament; adopting
reinforced majority laws; appointment procedures and appointments for key institutions; electoral
reform; the conduct of elections; public administration reform; rule of law and judicial reform; fighting
corruption; fighting organised crime; addressing property issues; reinforcing human rights and
implementing anti-discrimination policies; improving the treatment of detainees and applying
recommendations of the Ombudsman. For the full text of the key priorities, please see COM(2010) 680.
September is a positive step towards the normalisation of political dialogue and cooperation.
An inclusive political environment conducive to cross-party consensus needs to be fostered in
Parliament. The climate of polarization and mistrust between the government and the
opposition affected the local elections of 8 May. There are areas where international standards
were met, in the conduct of these elections, a key priority of the Opinion, and areas where this
was not the case. Electoral reform, which is a key priority of the Opinion, has stalled.
Parliament has not yet ensured an orderly hearing and voting procedure for constitutional and
high court appointments, a key priority of the Opinion.
Efforts have been made by the government and by the parliamentary committee for European
integration to advance and coordinate reforms on EU integration including to develop and
conduct consultations on an action plan to address the recommendations in the Commission's
Opinion, and in particular the 12 key priorities. The quality of legislative drafting and
consultation with third parties need to be significantly improved. The decentralisation reform
process was adversely affected by the difficult relationship between central and local
government.
Essential steps in public administration reform, which is a key priority of the Opinion,
including amendments to the civil service law, have not been completed. Despite some reform
measures such as the Council of Ministers' decision on the structure and organisation of
public bodies of June 2011, adoption of essential legislation is still pending and contingent on
overcoming fully and in a sustained way the political stalemate as it requires adoption by
three-fifths majority vote in Parliament. Implementation of existing laws and administrative
acts remains weak. The Department of Public Administration (DOPA) still lacks sufficient
authority in the institutional context to fully assume its role. Establishing an independent,
merit-based and professional civil service free from political interference has still to be
achieved. Appointment of the Ombudsman is still pending.
As regards the judiciary, limited progress has been made in completing judicial reform, which
is a key priority of the Opinion. The judicial reform strategy and its action plan were adopted
in July. They form a good basis for reform efforts. Implementation will require the allocation
of adequate human and financial resources as well as sound inter-institutional cooperation.
Important legislation requiring adoption by a three-fifths majority vote in Parliament such as
the Law on Administrative Courts is pending adoption. The efficiency of the judicial system
is undermined by lengthy court proceedings leading to backlogs. Budgetary appropriations for
the judiciary remain generally insufficient. The rate of enforcement of decisions is still weak.
No concrete steps have been taken to combat corruption in the judiciary, including through
limiting or abolishing the immunity of judges.
Limited progress was made in the field of anti-corruption policy, which is a key priority of
the Opinion. The legal framework and inter-agency structures are mostly in place, but
implementation of specific actions remains overall ineffective and results are insufficient.
Public awareness campaigns are only starting. The immunity of certain public officials, the
absence of a proactive approach and lack of resources and equipment continue to seriously
obstruct effective investigation. A track record of investigations, prosecutions and convictions
is lacking at all levels. Corruption prevails in many areas and continues to be a particularly
serious problem.
Albania has further enhanced the legal and institutional framework for human rights and the
protection of minorities. There has been progress in certain key priority areas, such as
strengthening the protection of children's rights through the adoption of a comprehensive law
and improvements in the conditions of detained persons in prison and the development of
alternatives to detention. Progress in the field of human rights has nonetheless been uneven
and renewed concerns have emerged in certain areas, such as freedom of media, where
editorial independence continues to be hampered by political and business interests. Effective
implementation and enforcement of legislative and policy tools governing human rights and
protection of minorities needs to be substantially reinforced.
Property rights remain an issue of great concern. There has been little progress towards the
adoption and implementation of a coherent property reform strategy and action plan. This is a
key priority of the Opinion. The fragmentation of responsibilities and lack of coordination
between the various institutions involved hampers effective policy implementation and
creates legal insecurity and a systemic risk of corruption.
There has been partial progress on addressing the key priority which calls for reinforcing the
protection of human rights, notably for women, children and Roma, and the effective
implementation of anti-discrimination policies. There have been developments in this area,
including the adoption of the new National strategy on gender equality and the fight against
domestic violence; the start of implementation of the Law on Protection from Discrimination.
Some important legislative gaps remain, in particular with regard to persons with disabilities,
and Albania needs to ensure the consistent implementation of existing legislative and policy
tools. General awareness of anti-discrimination legislation and the complaints mechanism
needs to be increased. Concerns remain over continued discrimination against certain
vulnerable groups, such as lesbian gay bisexual and transgender persons and Roma. The
Roma community continues to be marginalised and lacks access to social protection and
services.
Some progress has been made towards addressing the key priority on improving the treatment
of detainees and application of the recommendations of the Ombudsman in this field.
Measures have been taken to improve the conditions of detention and to systematise the
follow-up of the Ombudsman's recommendations. However, cases of ill-treatment are still
being reported, notably during arrest and police custody. The treatment of mentally ill
offenders still needs to be improved. The lack of a permanent appropriate solution for the
placement of those under obligatory treatment remains a serious concern.
Regarding regional issues and international obligations, Albania has continued to contribute
to regional stability by fostering positive relations with neighbours and regional partners. It
now has a visa-free regime in place with all Western Balkan countries. The country has
continued to participate actively in regional cooperation initiatives, including the South East
European Cooperation Process (SEECP), the Regional Cooperation Council (RCC) and the
Central European Free Trade Agreement (CEFTA).
As regards the International Criminal Court, the bilateral immunity agreement with the United
States does not comply with the EU Common Positions and guiding principles. The country
needs to align with the EU position.
The economy of Albania maintained macroeconomic stability and positive growth during and
in the aftermath of the global crisis. However, the political stalemate hampered the capacity of
the government to implement necessary structural reforms. The economy grew by 3.8% in
2010, thanks to exports, while domestic demand was muted. Monetary policy has successfully
assisted in keeping inflation stable, also against heightened international commodity prices.
Shortcomings regarding the enforceability of contracts and the rule of law, together with weak
infrastructure and human capital and the informal economy continue to hinder economic
development.
As regards the economic criteria, Albania made some progress towards becoming a
functioning market economy by reducing the fiscal and external deficits and keeping inflation
expectations anchored thereby reinforcing macroeconomic stability. Albania should be able to
cope with competitive pressures and market forces within the Union in the medium term,
provided that it steps-up structural reforms, including by reinforcing the legal system and
strengthening physical and human capital.
Despite a more polarised political landscape, a broad agreement on the key essentials of a
market economy was maintained. The Albanian economy continued to grow, albeit at a
slower pace and notwithstanding the weak economic conditions in important trading partners.
Monetary policy remained sound, maintaining price stability while inflation stayed within the
target range. The current account deficit and the fiscal imbalance declined in 2010. State
involvement in the economy is low and subsidies remain limited. The banking sector remains
well-capitalised and liquid. Some progress was made to further facilitate market entry. The
EU continues to be Albania's main trade and investment partner.
However, a lasting reduction of the relatively high public debt has not been achieved. Further
narrowing of the external imbalances may prove challenging especially if the decline in
workers' remittances persists. Labour market performance deteriorated in 2010, while
unemployment remains high. Implementation of bankruptcy procedures remains incomplete,
while the weak rule of law hampers the enforceability of contracts and the business
environment in general. The issue of property rights remains unaddressed. The high level of
non-performing loans in the banking system continues to be an issue of concern. Investment
in human capital and infrastructure remain inadequate. The informal sector remains a
challenge. The concentration of the production in terms of sectors and export markets leaves
the economy vulnerable to external shocks.
Albania has made some progress in improving its ability to assume the obligations of
membership, in particular in the areas of free movement of goods, enterprise and industrial
policy, justice, freedom and security, external relations and financial control. Progress has
been limited in other areas such as free movement of workers, public procurement,
intellectual property law, information society and media as well as energy, environment and
air transport. Overall, sustained efforts are needed to strengthen administrative capacity for
the implementation and enforcement of legislation. Additional efforts are required to ensure
the timely implementation of commitments under the Stabilisation and Association
Agreement.
In the area of free movement of goods there has been good progress in standardisation. An
adequate market surveillance structure needs to be established. In the area of freedom of
movement of workers, there was little progress and preparations are at an early stage. There
was some progress in the area of right of establishment and freedom to provide services,
mainly in the area of postal services. There was some progress in the area of free movement of
capital as regards the legislative framework on payment systems and combating money
laundering. Further efforts are required to effectively implement the national strategy to
combat money laundering and financial crime.
Little progress was made in the area of public procurement. Institutional capacity remains
weak and there is a lack of a clear definition and distribution of competencies in all public
procurement institutions. Preparations in this field are moderately advanced. There was some
progress in the area of company law. However, the capacity of the National Accounting
Council and the operational independence of the Public Oversight Board remain weak. There
was limited progress in the area of intellectual property law, and preparations are not very
advanced. Effective enforcement of intellectual and industrial property rights remains poor.
Albania has not succeeded in meeting on-time its SAA obligation of guaranteeing a level of
protection similar to that in the EU, including as regards enforcement. There was moderate
progress in the area of competition, in the fields of both antitrust and State aid. However, the
responsible authorities lack the appropriate administrative capacity. The operational
independence of the State Aid Commission must be safeguarded. Preparations in this area are
on track.
There was some progress in the area of financial services. The regulatory framework on risk
management and capital adequacy improved. Supervisory capacity in the non-banking sector
remains weak.
There has been uneven progress in the field of information society and media. Alignment with
the acquis and market liberalisation on electronic communications are improving. However,
media legislation is not yet aligned with the Audiovisual Media Services Directive and the
capacity of the radio and television regulatory authority remains weak. Preparations in this
field are not very advanced.
Some progress was made in the area of agriculture and rural development. Progress in setting
up the structures for the implementation of rural development was made. However, the
capacities to carry out analyses, as well as to design and implement rural development
policies remain weak. There has been some progress, albeit uneven, in the area of food safety,
veterinary and phytosanitary policy. The operational capacity of the National Food Authority
was significantly enhanced and there were improvements in the legislative framework on food
safety and veterinary issues. Overall capacity and inter-service cooperation and definition of
competencies remain weak. There was some progress in the field of fisheries, particularly as
regards inspection and control. Enforcement of the regulatory framework remains poor due to
lack of physical and financial resources and poor inter-institutional cooperation.
There was some progress, albeit uneven, in the area of transport policy. Although alignment
advanced in the areas of road transport and air traffic management, air safety remains a
concern. The rail and maritime transport sectors require further efforts. There has been limited
progress on energy. Security of supply improved slightly, but market reform in the electricity
sector has not yet been effectively achieved and ensuring its economic viability will require
further efforts. The capacities and institutional independence of the electricity, gas, and
radiation protection regulatory authorities need strengthening. Preparations in this field are
advancing slowly.
Although some progress was made in aligning taxation legislation with the acquis, and
preparations are advancing, further efforts are required in the administrative and technical
capacity, including in the area of tax fraud and avoidance. There is no progress to report in the
area of economic and monetary policy. Progress was made in the field of statistics,
particularly as regards classifications and statistical infrastructure. Progress as regards sector
statistics was uneven.
Progress in the area of social policy and employment has been uneven. Although there were
some positive developments in the fields of health and safety at work, social dialogue, and
social protection, high levels of informality and inactivity continue in the labour market.
Overall implementation of policies also remains insufficient, particularly as far as social
inclusion is concerned. Preparations in this field are not very advanced.
There has been progress in the field of enterprise and industrial policy, particularly as regards
improving the regulatory framework for business and on access to finance to SMEs.
Institutions have been established to facilitate innovation and technological development.
Preparations in this field are advancing.
Some progress was made in the area of trans-European networks. Completion of road
corridors advanced and a new electricity interconnection became operational.
There has been limited progress in the area of regional policy and coordination of structural
funds. Considerable efforts are needed to establish the necessary institutional and
administrative capacity and to develop a mature pipeline of projects in the area of regional
development. Preparations in this area are still at an early stage.
As regards judiciary and fundamental rights, there are still some important gaps despite some
efforts to develop legislation in line with European standards. Furthermore, the
implementation of legislative and policy tools remains insufficient overall and presents a
major challenge. Albania's alignment with European standards and the acquis in the field of
judiciary and fundamental rights is at an early stage.
Albania has made progress in the area of justice, freedom and security. Visa-free travel to the
Schengen area entered into force in December 2010 for citizens holding biometric passports.
Progress has been made on fighting organised crime, notably through good international
cooperation and implementation of the 'anti-mafia' law including confiscation of criminal
assets. Nevertheless, organised crime remains a challenge. Efforts need to be maintained for
the effective implementation of the legislative framework and in strengthening the fight
against organised crime, which is a key priority of the Commission's Opinion. This includes
the building up of a credible track record of proactive investigations, prosecutions and, where
appropriate, convictions. Measures to increase the expertise and empowerment of
investigators and the cooperation of law enforcement agencies should be actively pursued.
The fight against drug trafficking, money laundering, trafficking in human beings and
protection of its victims must be intensified and conducted systematically, and the legal
framework for the confiscation of criminal assets systematically enforced.
There is progress to report as regards the capacity to implement the acquis in the area of
science and research. Administrative capacity relating to participation in the 7th EU Research
Framework Programme improved, although national research capacity remains low. Some
progress was made in the areas of education and culture, in particular as regards Vocational
and Educational Training.
There was little overall progress as regards legislative alignment in the field of environment.
Overall implementation and enforcement of legislation remains weak. Strengthening
administrative capacity and inter-institutional cooperation require further efforts. Regarding
climate change, Albania has made no progress overall and institutional capacities remain very
weak.
Some progress has been made in the area of consumer and health protection. There was also
progress in consumer protection regulation and enforcement. The legislative framework
improved overall. As regards public health, advances were made in legislation on health care
insurance and there were positive developments in the fields of communicable diseases and
mental health. However, inequalities on access to primary health care remain.
In the area of customs union there was some progress on legislative alignment and
preparations in this field are advancing. However, the use of reference prices in customs
valuation remains high by EU standards and further efforts are required as regards simplified
procedures and trade facilitation. Enforcement capacity and management of human resources
remain weak.
Some progress was made in the area of external relations, in particular as regards the
common commercial policy. Strengthening the institutional and administrative capacity is
needed. There has been progress in the area of foreign, security and defence policy. The
country aligned with most EU declarations and common positions, and continued to
participate in CSDP operations.
There was progress as regards financial control. The primary legal framework for Public
Internal Financial Control and centralised budget inspection improved. Administrative
capacity in the field of internal control requires strengthening. Preparations in the area of
protection of EU's financial interests are at an early stage.
In the field of financial and budgetary provisions, the basic principles and institutions for the
underlying policy areas affecting the own resources system are in place. The administrative
Framework for the application of the own resources rules is not yet in place.