The plummeting of euro, technocrats demand an inquest

The plummeting of euro,  technocrats demand an inquest
The plummeting of the European currency, euro, in the Albanian market during the months of May and June this year in Albania, doesn’t seem to have been incidental. Besides the seasonal effects, it may also have been stimulated by illicit acts relating to vote buying, but also other acts as part of the general parliamentary elections of 25 June 2017.

This is the suspicion raised by the technocrat ministers of the government, in the final report that they have drafted and which they have submitted to the Prime Minister while they have officially confirmed their resignation from their respective posts, held for two months as part of the agreement reached between Rama and Basha. The ministers go even further with a concrete demand of launching a special probe to prove with facts the existence of such phenomenon.

“An investigation over the changes in values in the currency market are being recommended, regarding the depreciation of the euro from 19.5.2017 until 27.6.2017, to find out if the changes in the value are connected with its informal use to buy votes or for other criminal electoral offenses”, states among others the report drafted by technocrat ministers.

In fact, during the period in question, the European currency in Albania dropped to its lowest level, namely 131 lek and this is the same value that it had in 2009, when it registered a real drop in the domestic currency market as a result of the immediate effects of the global economic crisis which were felt in Albania.

Experience has shown that every year, at the start of summer, the European currency registers a depreciation due to the increase of supply caused by migrant workers or tourists who chose Albania as their holiday destination. But this year’s fall of the euro was drastic and what’s more, it happened during the election campaign. This seems to have obliged the technocrat ministers of the government to cast suspicions that this depreciation has been stimulated by extra supplies of the euro in the market with the scope of buying votes, but at the same time, to also commit other criminal offenses that relate to the elections.

Xhepa: I don’t rule out cannabis for the euro’s depreciation

 

During a statement for Albanian Free Press,  leading economy expert, Selami Xhepa told the paper when asked if a stimulated depreciation of the euro could have really happened during the pre-election period (like the technocrat ministers allude), he said that nothing can be ruled out.

“This, due to the fact that there are also changes in the monetary aggregates, in money supply. It’s clear that there’s been a bigger supply of currency than there usually is, although in general, during the summer months, euro is in great supply as a result of the arrival of tourists. So, it’s true that there are changes in the currency exchange rate”, he explains.

He adds that the request of the technocrat ministers for an investigation over this issue may be a well-founded request.

“It’s well founded request, because if there have been inflows from the trade of cannabis, then these funds may have been used for political motives. I cannot rule this as a possibility and I have said this several times in TV debates that the issue of cannabis is not just an issue of economic nature, but also of a political nature. So, I don’t rule out the possibility that there may be a strong link between them”, Xhepa further explains.

BoA: The great currency supply caused a drop in the euro value

The high amounts of currency entering the Albanian economy, creating a surplus of supply in the domestic currency market has been the cause of the great depreciation of the euro in this market during the months of April, May and June 2017. This is a fact admitted by experts of the Bank of Albania, while publishing a few days ago the changes in the currency exchange rate in the second quarter of the year, but without offering any concrete motives that have led to this high currency supply.

Nevertheless, they have admitted the fact that lek has continued to strengthen during the second quarter of the year and this strengthening has been more accentuated in the month of May and June, a period which coincides with the election campaign for the June 25 polls. So, the Bank of Albania declared that the annual appreciation of lek was 4.6% during this quarter, as opposed to 3.5% and 3.2% in the first quarter of the year and in 2016.

STANCE

Leading economy expert, Zef Preçi doesn’t rule out the concern that was raised in the report drafted by the technocrat ministers in relation to the depreciation of the European currency during the months of May and June 2017, but he says that this remains to be verified.

“In all the economical analyses carried out in the last 15 years, the most credible factor is the one that relies on the ratio between demand and supply. The sharp fall of the euro is an indicator that the supply of the currency in the market was high. The report of the technocrat ministers doesn’t rule out the hypothesis that this may relate to the use of the currency during the election campaign, but it doesn’t prove it either. I can say that we cannot rule out a strong link existing between criminal activities taken place in the last election campaign and the drastic depreciation of the European currency”, Preçi explains.

Shpërndajeni me miqtë tuaj: