Remarks by Prime Minister Edi Rama at today’s plenary session of parliament:
I listened with great interest to the speech of Mr. Mediu and I fully agree with him that it would have been in the country’s best interest, in this state’s best interest to speak with one voice when it comes to issues of paramount importance, including the issue raised by Mr. Mediu. Needless to elaborate the reasons why we haven’t sometimes delivered on this, because everyone would cite a long list of various reasons, but given that I would actually like to briefly comment on the normative act, and I would cut it short, if Mr, Mediu takes the initiative to host a joint table with the Democratic Party – in his capacity as elected MP under the ticket of this party – and the Socialist Party I can assure you all that I would take part without asking who is going and who is not going to partake. It would be really a valuable initiative and there is no reason to predict its outcome in advance, even if it fails to produce any.
On the other hand, I would like to highlight some simple things, because after taking notice of your comments, I realized there is a very great misunderstanding regarding the normative act and the Eurobond itself.
The Eurobond is not a new loan.
The Eurobond is a financial mechanism of liquidities of the debt itself. It is not like Mr. Mediu said: “borrow loans to repay the debt.” Instead, the Eurobond is a mechanism that allows us to cope with the rising costs and cope with the whole financing process for the whole amount of loans we have borrowed over the years.
Everything was said here, but the truth is that as you keep reiterating that the 80% debt ratio is the highest ever, and as you seek to tell and convince people that this is actually a new loan and that the situation has allegedly spiralled out of control, I would recall you the fact –and it was not 100 years ago, neither 50, nor 30 or 15 years ago – and it when those who determine the line of the opposition’s speeches today were in office and the country’s debt ratio we inherited upon taking office was 74%.
It is true that the debt level today is higher than 74%, but there is a reason for that and the reason is related to the fact between the time when debt level was 74% and we cut it to 63% and the moment as we speak, two major and very grave events have happened, causing the urgent need to borrow a loan; namely the devastating earthquake and the pandemic. The debt ratio you left Albanians and Albania when you left office stood at 74%, but the country was not hit by an earthquake or a pandemic. However, both the earthquake and the pandemic practically lied in the very foundations of your previous government. Because it is really admirable of your courage to speak and level allegations, while totally forgetting that you have neither landed from the Moon, nor have you landed in Albania on the day when this legislature started.
You have been here, you have governed the country and the protagonists of the previous government are at the helm of your party today. The protagonists are on the double heads of the writhing bird, because it is now formal that DP is a double-headed bird, but not an eagle. It is still unclear what sort of species it would eventually resemble once this fight and scrimmage, but it is for sure it won’t resemble an eagle.
So we have exactly done what every household, every family would do when facing a situation that is much bigger than the family itself, it is much bigger than what it can afford and much bigger than its power to deal with. If the house of a family – God forbid it for all of those watching us now – is suddenly burned down, what is this family supposed to do? They have no other choice, but to ask for a loan. Would that family decide to live under the open sky? No, they would apply for a loan. The same would happen if a family is hit by another disaster, which would require extra financial efforts that the family cannot afford. What would the family do? Such a family would do the same thing here in Albania and everywhere else around the world, be it in the United States, Japan, England or Switzerland. But there is a problem; one can be granted or denied the loan. This would depend on the capacities you have developed and can afford at the time when you apply for a loan and you should demonstrate that you are capable of repaying it. This is because debts, and the Eurobonds in particular, which is issued by the capital markets, are not loans borrowed from fools and banks, and the heads of capital in particular are not a counter that eagerly awaits for state entities or bankrupting states to report at them, as Mr. Mediu said.
There is no bank that would agree to lend money, if you can’t demonstrate that you are capable of repaying it. How would you then test a state to decide whether that state is able to repay what it asks in loans? And more concretely in this case, how can a state demonstrate that it is capable of responding to capital markets which are nameless, faceless, kinship-free, and without party-affiliation? The capital markets know the language of digits through computers and calculators only. What do you think? Would the capital markets trust Albania, because I was told that you are also a professor of economics? Which academy? I will talk about that too. Do not worry. Of course! I will also talk about what you have in mind, namely the academy of shepherds.
Me poshte vijon pjesa e dyte e fjales se KM Rama ne parlament :
The school of shepherds, fishermen and the school of farmers foster new generations of shepherds, fishermen and farmers and train them, regardless of their age, actually operate all over the world and it is not about academies the way you understand the word academy, if you are mocking the idea about such schools. No, they are spaces of continued education and training offered to all categories of people involved in various sectors and who are updated and encouraged through information and training programs to adapt with the new changes and the reality. Therefore, I would invite you not to chuckle and laugh at yourselves, because “talking and laughing at yourselves” has somehow become your party’s motif. But this is not to laugh.
Back to this small academy I hold with you here, I would say it is shameful that I am forced to lecture you, because someone here claims to be a professor of economics. I am just a painter, but I learn something new in the process every day because of my position as the government head, I listen carefully to everyone and I don’t laugh when I talk, but I talk to make others laugh at most. I also dab and draw, but it is okay. What’s your problem with the doodles and scribbles? You should worry about the image of a scribble you convey to the public, not for the scribbles that have their own lives. Their life starts and ends with a piece of paper. They are there to be seen by those who wish to see doodles and scribbles, whereas people should care not to take the shape of the doodles when speaking. This has to worry not you personally, but each and every one of you and that’s why I would invite you to show some more respect for the scribbles and don’t apply the former Party Committee-era censorship, because I have told you that “you tend to call yourselves as rightist politicians, but you have nothing to do with the centre-right.” But we can’t do anything about that. It was not us to elect you, as others have done, we can’t help but just respect and embrace you whenever we can to give you a little love.
Someone here asked, “Why was the amount increased to 700 million euros, as you had previously planned a Eurobond of 500 million euros.” I know such a statement is to allege accusations and tell people: “Look how they steal. They plan a certain amount, but as soon as they start distributing the money they realize everything has been miscalculated and address again to the capital markets to get whatever they can.”
Many years have passed, but you are still failing in your attempt to get and grab whatever you can as you were used to previously and you are now carefully watching to find out what is going on. However, nothing that used to happen when you were in office is happening now, but you are not to be blamed when thinking that it is allegedly happening precisely what used to happen back then. This is what you were used to doing.
An academy for poetry has yet to be launched. If you want me to focus on today’s agenda, call on your colleagues not to refer to … Who do I have to deal with, if not with you? If I am not going to deal with you, I better leave. You can think about Albanians once you take office and take my seat here, because they are the ones I bear always in mind anytime I take the floor here. I have already told you this. No one outside this hall can be fooled by you. You have been thinking that you can fool them and anytime you have tried to do so, on Mondays after the election day you have always been waking up claiming that “the elections were stolen again.”No, this is not the case. Therefore I would urge you to keep in mind the citizens anytime you seek to tell them nonsense. If you don’t want me to deal with you, it suffices for you to make a request and I would stop doing so. I don’t mind it at all, since I am meeting Albanians every hour and every day.
The professor of economics claimed that the government has issued a Eurobond at high interest rates. The Eurobond has yet to be issued, but memory is again the key, because it is worthy, and since you don’t work with the memory, you find yourself entrapped due to the lack of memory, because if otherwise, things could have gone better for you. Do you remember the interest rate of the last Eurobond you issued when you were in office? The interest rate was 12%.
Verify this claim. You issued it at a coupon of 7.5 and the interest rate rose to 12%. I speak responsibly and not based on the charts you show here.
The government debt rate stood at 63% before the country was hit by the devastating earthquake. These are the official figures and figures are not opinions. Your arithmetic is nothing else but just an opinion and this is a universally known fact. The last Eurobond was issued at a 3.5 interest rate during the pandemic. Why did it happen? It happened exactly for the abovementioned reasons. The market capitals don’t know Edi Rama, neither the opposition, nor the Socialist Party or the Democratic Party. What they know are figures alone and they work by resorting to the calculator only. That’s why the yield stood at 12.5 percent the last time you issued the Eurobond, and at 3.5% when our government issued the Eurobond during the pandemic. This is because the capital markets make a very simple assessment. They are asking for liquidity so that they can keep financing their debt. But which is their capacity assuring us that they will repay the debt? Such a capacity is found among the figures. I would tell something else to the professor of economics. You used to borrow high-interest loans and for one lek in loans you used to invest 1.28, whereas we invest 1.69 for one lek in loans, which means that we use loans to support economic growth and if your claims were to prove right, then issuing Eurobonds to the capital markets would mean bankruptcy, or the interest rates would be extremely high. But since your claims are not right, the capital markets respond based on facts and figures and the latter are not opinions. You can of course take the floor here and claim that 50% of Albanian citizens live in extreme poverty. You can certainly make such a claim. You can even pretend that 60% of them live in poverty. Even 70%! But such a claim would be reflected in figures, if it was the case. It would be reflected at the consumption index. It would have been reflected in exports. It would be reflected in the entire value chain of the economy. How come you issue such statements? This is just for you to name a certain figure? That’s why it is not a surprise that Albanian citizens say the opposition knows nothing about us anytime you try to reach out to the citizens.
Last but not least, I would say something about debt again. The new Eurobond is again within the target. Which target? Our target to cut the debt in the process again after its forced and unavoidable rise, because you consider Albania’s case only, but I would invite you to take a look at other countries too. Take a look at what has happened with the government debt in other countries, which were not hit by an earthquake, which for Albania and given Albania’s size it would have been translated into a blow to many sectors of their economy, but which were equally hit by the Covid-19 pandemic. What did many powerful countries actually lead the world? What is the United States doing now? What is the U.S. Congress and the Senate discussing now? They are mulling ways to build up the largest liquidity plan in the history of the United States of America since the Great Depression era. This is about what the debate is taking place there. Why is the U.S. doing so? Because it is not a normal time and the pandemic there has been considered a war and they are doing exactly what they did in the post-Vietnam war era in terms of planning an unprecedented liquidity ever unveiled in decades. What the neighbouring countries did? In the meantime, don’t forget something else. The U.S. has its Federal Reserve that issues and prints dollar bills. The EU member states that receive loans have a common fund that supports them and this was actually the case when they launched the response against the pandemic and we here used to draw examples showing what other countries are doing. But I would invite you all to take a look and find out how the liquidity were directly transferred to the budgets of all EU member states and how much state budget money did these countries earmarked to the efforts against the pandemic. I would invite you to take a look at them. Where did Albania find such liquidity? So, keep telling people such stories and I am sure you would do so because it is merely a matter of recording. As long as the recording of the phonograph player is not changed, it will keep replaying the same old tune since the 2013 music festival. I would invite you to update your recording and play some new tunes.
Thank you very much for your attention and the help you granted me without asking for it.
