Denada Jushi
Juli has spent years working hard to build his family's pastry shop in Shkodra. But when asked what he expects from Albania's membership in the European Union, uncertainty is evident in his eyes.
"We've heard a lot. The children who live in Padua tell me that everything will be better and more orderly, but I'm worried that I won't be able to cope with these new rules," he says.
Juli's anxiety is a reflection of a more complex reality: European integration in Albania has for years remained a political monologue in the capital, without yet reaching businesses and citizens on the ground. While officials cheer record tourism and economic growth figures, citizens complain about the parallel increase in prices that makes this progress invisible to them.
The question that arises today is whether we are building a sustainable economy according to EU standards and which model awaits us across the border: the industrial success of the Czech Republic or the path of Bulgaria.
The growth paradox and the "bells" of Brussels
Beyond the official enthusiasm, the European Union is calling for deep reforms that touch the roots of our economic system. In its latest Progress Report, the European Commission issued a clear warning: “A large informal economy hinders the business environment and competitiveness.”
Although fiscal revenues have increased and the construction sector continues to expand at a rapid pace, Brussels notes that this growth is not being accompanied by sufficient structural reforms. The report points to weak competition, limited financial intermediation and unfinished reforms.
Economist Ornela Liperi says that European integration in Albania has been wrongly treated as a primarily political and electoral process, overshadowing market preparation.
"So far, the integration process has been seen more from two perspectives. The first, the political one, as a tool that parties and the government use as an argument to gain public trust and get votes. Second, from the perspective of individuals who are attracted by advantages such as free movement or opportunities for employment and study," says Liperi.
According to her, the main actor that will bear the brunt of this process, local business, has been left out of the spotlight.
"EU integration does not just mean opening chapters and approximating laws. It means profound transformation: a competitive economy, products that meet European standards, food safety, environmental protection, financial transparency and the fight against informality."
Between informality and oligopoly
Challenges on the ground remain chronic. The Progress Report highlights that informal employment increased again, especially in key sectors such as construction, tourism, Services and tailoring.
Economist Zef Preçi argues that high informality, which is estimated to fluctuate between 28% and 32% of Gross Domestic Product in recent years, along with the lack of competition, are the biggest mines on our European path.
“Informality includes undeclared activities, undeclared wages, turnover without invoices and employment without contracts. It reduces the tax base, distorts statistics and makes it impossible to design policies according to EU standards,” says Preçi. “Informal businesses compete at artificially lower costs, harming serious firms and reducing the motivation for long-term investment.”
In addition to informality, another concern is related to market concentration, a problem frequently raised in Parliament by MPs from both political wings, including Jorida Tabaku and Erion Braçe.
Preçi cites the fuel market as an example, where the Herfindahl-Hirschman index, which measures market concentration, reaches levels that signal oligopoly.
"In some key markets, a few players dominate and keep prices high. When businesses believe that even public tenders are not conducted on the basis of real competition, serious companies withdraw. A vicious circle is created where a few companies connected to power reinforce their dominant position," he explains.
Model: construction & tourism?
The pillars that keep the current economy afloat — construction, tourism, and remittances — are being viewed with skepticism by experts in terms of long-term sustainability.
"The current model is relatively stable in the short term and stems from conjunctural factors, but remains fragile and not convergent with EU standards in the long term," argues Preçi.
He adds that construction is the most cyclical sector and most exposed to fluctuations.
“Increasing construction without increasing productivity creates the risk of a bubble in property prices and channels financial resources away from production and innovation.”
At the same time, tourism remains exposed to external crises, while the massive emigration that generates remittances is simultaneously emptying the country of human capital and a skilled workforce.
Lessons from Prague and Sofia
To understand where Albania could go, it is enough to look at the history of the two countries of the former communist bloc that joined the EU.
Czech Republic member state (2004); over 50 billion euros in infrastructure, scientific research, innovation, digitalization.
GDP per capita above 90% of the EU average; unemployment among the lowest in Europe; fully integrated economy.
On the other side stands Bulgaria, which joined (2007)
Around 20-25 billion euros in infrastructure investments and major support for agriculture But today Bulgaria still remains the poorest country in the EU; chronic problems with corruption; funds frequently suspended by the EC; massive loss of population through emigration. |
This comparison proves that European funds are not automatically a guarantee of development. What makes the difference is the seriousness of the institutions and the ability of local businesses to face the competition of the common market.
"You don't know what strawberries you're eating"
According to Ornela Liperi, Albania is already late in preparing for the real economy. She recalls conversations with European officials raising the alarm about the lack of basic standards, such as traceability of food products.
"You don't know what strawberries you're eating," was the blunt comment of a senior European Commission official.
"If we want to be part of Europe, it is unacceptable not to have functional laboratories and guarantees for the origin and safety of products. Many Albanian businesses fear that they will not have the financial capacity to meet these standards and risk bankruptcy," says Liperi, adding that the government must urgently turn its attention from the ground to make the transition as painless as possible.
At the end of the day, billions in European funds are not magic; they are simply a tool. The Czech Republic showed that with strong institutions and vision, the EU can serve as a catalyst for economic development. Bulgaria proved that, without fighting corruption and informality, Brussels money can improve infrastructure, but not necessarily transform the economy.
Albania cannot see integration simply as a political trophy or as an opportunity for emigration. If institutions do not start today to prepare local businesses for the standards and competitiveness of the European market, EU accession may prove more challenging than expected.
Conversely, when Albania officially enters the European Union, pastry chef Juli in Shkodra and thousands of entrepreneurs like him may not find the large European market they expect, but the difficulty of surviving in it.acqj.al
