Albanian Society of the Study of English (ASSE)

On the edge
Jul 6th 2009
From The Economist Intelligence Unit ViewsWire

Albania's ruling coalition looks shaky

Albania’s centre-right Democratic Party (DPA), led by Sali Berisha, has forged a coalition to keep it in power
following the parliamentary election. However, the new rules under which the election was held have resulted
in a near-even split in parliament between the DPA and its rival, the Socialist Party of Albania (SPA), for the
first time since the collapse of communism. With the DPA enjoying only a slender majority, it is potentially only
one crisis away from losing its grip on power. Thus for the first time since a popular uprising in 1997, the new
government may not survive a full four-year term.

Albania now finds itself in sight of a new government, one week after the holding of a general election. Partial
counts gave the DPA a very narrow lead over the SPA, by around 46% to 45%, which on July 1st encouraged
DPA officials to claim that the party would have 71 seats—and thus a wafer-thin majority—in the 140-seat
parliament. These claims were initially rejected firmly by the SPA. On July 3rd, however, the electoral
authorities confirmed the result: 46.7% for the DPA, giving it 71 seats, and 45.4% for the SPA, giving it 65
seats. Soon after, it was announced that the Socialist Movement for Integration (SMI), which took about 5.6%
of the vote and has four seats, would join the DPA in a governing coalition. With 75 seats to 65, Mr Berisha will
have a working majority.

Not as planned

Although the DPA and SPA have long dominated Albanian politics, governments have tended to be coalition
affairs, given that several small parties have tended to gain representation in parliament. In an effort to
squeeze out the small fry, the big two co-operated to rewrite the electoral code.

This effort nearly succeeded. At present, however, it has had two consequences that the DPA and SPA
probably were not counting on when they agreed to collaborate on electoral reform.

First, it has resulted in a virtual tie in parliament. All previous Albanian elections have delivered a clear victory
to either the left or the right. In 1997 the SPA and its allies claimed two-thirds of the seats in parliament; in
2001 the SPA and its affiliates won 60% of the seats; and in 2005 the DPA-led alliance won 73 seats compared
with the SPA-led alliance’s 58. In the new parliament, the DPA and its allies have 71 seats while the left have
69.

Second, one small party has survived—and has become kingmaker. The SMI, which was founded and is led by
a former SPA prime minister, Ilir Meta, has given Mr Berisha a working majority in parliament. The response of
the SPA to this turn of events has been predictable: the party’s leader, Edi Rama, has described Mr Meta as
“Berisha’s crutches” and the deal as the most shameful in the last 18 years of Albanian political life.

Rama’s no Obama

The SPA’s bitterness towards Mr Meta, who is arguably the party’s best-ever prime minister, is probably
intensified by a perception that the election has slipped through its fingers. At the start of this year, opinion
polls showed 39% support for the SPA versus 30% for the DPA. By mid-May the SPA’s rating had slipped to
36% while the DPA’s had risen to 38%, boosted in part by accession to NATO in April. The later poll, by US

Albanian Society of the Study of English (ASSE)

 Albanian Society of the Study of English (ASSE)

agency Zogby International, showed that 42% of voters under age 35 supported the DPA, against only 34%
for the SPA. This ran counter to the long-held belief that Mr Rama, who at 45 is nearly 20 years younger than
Mr Berisha, had a greater appeal among younger voters.

Fatos Nano, the SPA’s founder, continues to cast a long shadow over the party. He and his supporters
dominated the party throughout the 1990s and until 2005, when Mr Rama became SPA leader. He sought to
oust the party’s old guard from prominent posts and to bring ex-SPA figures back into the party. However he
failed to secure Mr Meta’s return and seems to have expected that the electoral law would reduce the SMI to
impotence or irrelevance. Instead, it put Mr Meta into a pivotal position—and he has put his support behind Mr
Berisha.

Clear course

From a policy perspective, there is little to choose between the DPA and SPA. Both ran on a platform of
furthering European integration. The only substantive difference concerns the IMF, as the SPA openly favoured
a deal with the Fund to stabilise the public finances.

Mr Berisha applied for EU candidate status for Albania at the end of April. At the time the EU sat on the
request, pending the outcome of the election. The fact that the OSCE has noted shortcomings in the poll,
despite progress compared with 2005, may persuade the EU heads of government to wait a little longer before
requesting that the European Commission issue an opinion on Albania’s suitability. This might wait until
September or perhaps until the regular annual progress report is issued in November. Nevertheless, the
Commission is likely to be asked for its opinion at some point within the next six or seven months, after which
Albania will be given a voluminous questionnaire that will take 12-18 months to complete.

On the public finances, a budget revision seems inevitable because-in common with nearly all its neighbours-
Albania adopted its 2009 budget just before the economies of eastern Europe entered a sharp downturn. As a
result, the GDP forecast is too optimistic and the revenue projections are too high. There is a strong chance
that Mr Berisha will approach the IMF for a loan before the end of this year to cover the revenue shortfall in
the budget. In return, the Fund will demand spending cuts.

Berisha’s shaky position

With a working majority, there is little reason to believe that Mr Berisha will struggle with these issues. His
record in government is good: 2008 was the first year that Albania experienced no power blackouts; the
country’s road network has recently been upgraded, to the benefit of business and ordinary citizens; NATO
accession has been achieved; and economic growth has generally been a healthy 6% per year. However,
corruption allegations have been a persistent source of trouble for the DPA. A major scandal in the next
parliament could have serious implications, for if Mr Meta were to withdraw his support from the DPA, Mr
Berisha’s government would be left exposed. Corruption is by far from the only potential trigger for the SMI to
pull out; a policy disagreement or cabinet change could just as plausibly provide a trigger.

The DPA decided to seek SMI support not in order to boost the government’s legitimacy, but to reduce the risk
that it would be held to ransom by one of its own deputies or that the SPA would capture a single DPA defector
and so deprive the party of its majority. If Mr Meta were to pull out of the government, these fears would
come to the fore.

Another aspect of the electoral changes will work to Mr Berisha’s advantage: only constructive votes of no-
confidence are permissible in the new parliament, meaning that the chamber must back an alternative prime
minister at the same time as renouncing the current one. This undoubtedly gives Mr Berisha a measure of
protection. Nevertheless, given the balance in parliament, there must be a good chance that the incoming DPA
government will not last a four-year term. This was probably not the outcome that the party’s leaders
envisaged when they signed up to a series of winner-takes-all reforms to the electoral code in league with the
SPA.

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Albanian Society of the Study of English (ASSE)