Speech of Prime Minister Edi Rama at today’s parliamentary session:

It happens every year, on a regular basis, that when the budget draft needs to be discussed, the prime minister says how good the new budget draft is, and how good it is compared to previous ones.

Today, I’m not going to tell you how good this budget draft is, or how good it is compared to previous times.

I just want to put in front of those who want to see, a faithful mirror of the reality of these two years.

Where we were two years ago, before we brought here the first budget draft of this ruling majority, and where we are today, this year submitting the draft of the third budget year of our governing mandate.

I know there are people who don’t like to hear about where we were two years ago. There are some others who want to hear about where we stand with our commitments, not in comparison with our predecessors. There are even some who want to hear about where we are going at this rate, and above all when will we reach the point we want to reach. But, all these are connected with one another, and if someone tries and focus just on one aspect, will never succeed in drawing a conclusion, somehow true, in order to judge the present and imagine the future. So, I will try to connect things in this mirror, and then everyone is free to judge the faithfulness of this mirror.

Of course, there are plenty of people who do want to hear nothing, and neither I nor anyone else can deny them this right. How can we actually deny our opponents the right to lie about the debt, slander about income, accuse about employment, invent things on the poor, or talk nonsense about those who are gone? But of course, they cannot use the propaganda of those who do not want to refer to the truth to give the necessary depth of the mirror of the reality of things, facts and figures.

How can we deny someone, let’s say, the right to tell Albanians: “Stand up for a revolution, for customs and tax agencies stole 1 million dollars this year.”? But, of course, we cannot help but use this call to show Albanians the truth that this year collected revenues were far more than last year, and even more than those collected all the years of governance of our opponents put together. In fact, revenues collected last year were more than the 5 preceding years gathered together.

It is also a fact that this year we expected to collect more than what we are collecting. But, why did we not meet the expectations?

First, the average tax revenue in relation to the Internal Domestic Production for the period 2006-2013 is 23.3% and 23.1% if we don’t include the famous year 2008, when the huge hole in the Albanian state coffers was opened, with that procedure that still today needs to be judged by the judiciary, and which led to the construction of the National Road.

In the 2009-2013 period the indicator goes to 23%, reaching in 2013 a minimum of 22.2% of the Internal Domestic Product.

In the years 2014 and 2015 tax revenue in relation to the internal domestic production is 24% of this production. I believe it is more important in order to get closer to the truth than the nominal figures, more than in all years of the previous government altogether.

In the years 2014-2015 the additional revenue compared with 2013 is $ 598 million, i.e. more than half a billion dollars. If from 2008 to 2013, revenues have increased by about 359 million dollars, it is very simple to make a comparison.

Revenues from taxes and customs for the period 2014-2015, 2015 meaning so far, are 330 million dollars more.

Comparison is quite clear.

On the other hand, once again we owe Albanians an explanation why the expectations weren’t met. There is a number of factors I am going to list, who have no connection with the government or the administration of tax or customs.

– Decline in fuel prices in international markets. That happened this year, and no one can delegate the responsibility to the government or the ruling majority in Parliament which did not foresee a decline of the fuel price in the market.

– Decline in revenues from royalties and revenues from Value Added Tax on the import of fuel and liquefied gas had an impact on our forecast of 42 million dollars.

– Halving of the energy import, which had a significant impact of 16 million less in revenue in the period from January to October, but which is certainly positive in terms of good administration of our energy resources.

– Decline of cigarettes import, higher than our previous forecast when we consciously decided to increase excise taxes to discourage smoking, and its impact is $ 35 million less in comparison with the forecast.

– Our policy for the growth of exceptions to stimulate entrepreneurship after the abolition of taxes on imports of machinery, pharmaceuticals, as well as refunds of excise duty with an impact on the fishing industry of $ 13 million.

-Decline in imports of fruits and vegetables because of domestic production growth beyond our expectations, as a result of the process of changing our economic model that stimulates the growth of the manufacturing economy, and it has a considerable impact on budget revenues, but it has a significant positive effect on our economy.

Add to these factors during the last 2 months the impact of the decline of the exchange rate Euro/ALL, which will bring less revenue per unit for goods imported from countries of the Euro area.

So, overall, you should find a better reason to play war with the government. Surely, there is more than one reason to do so with this government, but it is not my duty to find out the reasons. I can just can tell you which they are not, and this unrestrained propaganda of slander and lies to tell Albanians a great untruth that revenues have decreased because the money has been stolen, according to our opponents, who do not tell the concrete fact that revenues have increased significantly also this year.

We cannot deny anyone the right to harass us crying and blaming the alleged debt increase on us, as if they were bearing the burden of Albania’s debt, but obviously cannot be moved by such crocodile tears, while the facts speak bluntly to anyone who has the desire to listen.

Facts show that the debt taken in these two years has been significantly reduced, compared to the 4 or 8 years that preceded our government.

Only 2.8% of the gross national product has been borrowed in these 2 years. The facts show that in none of the 8 years preceding our government, the debt was reduced below 3% of the gross national product. The average of those 8 years is 4.2%, excluding arrears that became a hidden debt, and including hidden debt the average debt reaches 4.6% annually in relation to the gross national product. It’s more than double the fact which the opponents are harassing with the purpose of creating resentment, even panic.

Whereas, with this project that we are going to adopt for 2016, debt will drop to a historical minimum of 2.2% of the gross national product. With prices of 2014 this means concretely that we owe only 280 million Euros a year, on average 460 million Euros per year that were borrowed in 8 years.

8 years during which the serious threat to the macroeconomic stability reached its climax and the fiscal mishmash mish-mash we inherited 2 years ago was created.

This year, in 2015, the cost of debt decreased to 2.8% of the gross national product compared with an average cost that in 8 years has been 3.2%. These are stubborn figures that speak for themselves, for all those who have done everything put pull out their own hair in public to give the maximum emphasis to their doomsday propaganda on the debt, are just a group of speculators that have only one purpose: “keep on slandering, lying and accusing for something will remain”. But, of course, that the mark for the serious work we have done with the debt and the control of state accounts, cannot be given by the opponents thirsty for power, nor by us who actually have no reason to be bothered to give ourselves a mark, because suffice it to refer to international rating agencies who have given Albania a higher mark, and also refer to the evidence for the authenticity of this positive mark which turned in the high interest of investors for the Eurobond.

I must also underline the importance of what we will do with debt, – not that this will silence the long-winded people who sleep on the right side, wake up on the left side and after lunch cannot leave the feasts, either left or right-winged, which end with social and economic talks in a square where you just need a glassed eye to seem a visionary man among the blind who observe the affairs of the economy – but because there is a figure that speaks bluntly, shouting out that we have spent on public investments double the debt that we have received, or about 5% of the gross national product.

You do not need a degree in economics to understand that unlike 8 years in a row when Albania and Albanians lived with debts they couldn’t pay, today’s debt is not only under control, but the amount of public investments is double the debt taken.

To see investments, you need eyes, not glasses instead of the eyes.

Our policy opponents claim that the level of debt in September 2013 was somewhat 64.6% of the gross national product. But they forget – or pretend to forget, because in general they only pretend, not just about the debt but about everything they talk here and are paid with the taxes of the people, two tiny details, but with a great weight: 99.8 million dollars of recorded bills in the Treasury system, which have remained unpaid because of insolvency – which they faced badly in the last period of their rule devastating for the economy, and 720 million dollars of hidden debt. With the focus on these two details, the real level of debt in September 2013 was not 64.6% as they used to say and declare, but it was 70.5%.

We did not increase the debt from 64.6% to 70.5%, we legalized it, because we could not continue with the oppressive policy in relation to contractors. We could not embark on a state-building process, the one we have embarked on, asking Albanians to pay dues without settling the debts that the state had to those who in 2013 found themselves trapped, after they went to the banks with the contracts received for works and services, and financed even public services by taking loans from banks, and came to the point where the level of bad loans reached a threatening ceiling of 25%, and when most banks did not give loans anymore.

So, the whole chain of the economy and of its financing crashed. So, the calculation of increased debt is very simple. The debt increase is a result of the recognition of the debt by a government that established since the first day the principle of working and serving by the strength of the example, and not the example of strength. The strength of example should necessarily materialize primarily in the payment that the state owed to companies or individuals who until September 2013 was treated as hostages. Usually, they are organizations of another kind who take someone hostage, not governments. The behaviour of the government as an organization of another kind has nothing to do with a Republic that operates under the Constitution, laws and the free choice of its people.

A few words about the past and the future in this aspect.

The 8 infamous years of the chaos in the accounting ledgers of the state brought the debt level – and I would like to highlight this – from 468.1 billion it was in 2005 to 956 billion in 2013. So, the debt increased by 103%. On that 103% debt, the entire edifice of the Albanian economy was threatened by collapse.

The level of debt in relation to the gross national product went from 57.4 in 2005 to 70.5% in 2013. 13% of growth of debt in 8 years. It takes a lapidary effrontery that after you did this you go in the main square of the city and call to account for what you have done yourself. There is only one difference, because from hidden it came to light. We are not responsible why shed light on a sin that you kept hidden.

While the cost of debt interest from 26 billion in 2005 jumped to 43.3 billion in 2013. So, the cost of debt interest, which is another part of the problem, jumped to 66%.

So, it would take only that kind of insolence that only a policy conceived as a force for lying, slandering, and accusing, and as a means to hit, destroy and raze can have, with the only purpose to let things be destroyed and then, here our turn on the relics.

It takes the same effrontery to cry today about debt increase, when until yesterday they brought the debt to the limit of threat to the macro-economic stability of the country, with the risk of destroying the prospects of sustainable economic and social growth.

But this is the past, as it is the party that has taken the place of the opposition in this room. Our policy and our debt project for the period 2016-2019 is a permanent reduction of debt to the level of 60%.

(… to be continued)