3 FEB 15IMF Releases 53 million Euro Loan to Albania
The Ministry of Finance says that the IMF has approved the release of the loan after several months of difficult negotiations and increases in tax and electricity prices.
The Ministry of Finance announced on Sunday that the International Monetary Fund board of directors approved the second and third review of the Extended Fund Facility (EFF), allowing the disbursement of two tranches of an IMF loan worth 53 million euros.
“The Excecutive Board of IMF approved the review on 20 February 2015,” the Ministry of Finance said in a press release.
Albania signed a three-year agreement with the IMF on December 2013, promising to consolidate the country’s fiscal position and curb its public debt in exchange for a 330 million euro loan from IMF and further support from the World Bank. The loan is scheduled to be disbursed in nine tranches.
Albania got its first tranche on February 2014 and the second tranche in June. After the second tranche, relations between Albania and IMF soured. On September 2014, the second review of the agreement was postponed while the government had to change its budget law by substituting the missing tranche of IMF loan with debts issued in the domestic market.
In December, the IMF announced that agreement had been reached after the government of Albania approved increased taxation on fuel, tobacco and personal income, raises worth about 112 million euros per year.
Albania also changed its pension scheme by increasing the retirement age, while the Energy Regulatory Authority increased electricity prices.