Call for debt cancellation for Albania, Macedonia

France will ask for special debt relief for Albania and Macedonia, Agence France-Presse reported on 9 April. France is also asking the IMF and the World Bank to set up a special economic aid group for Balkan countries affected by the crisis in Kosovo.

French Finance Minister Dominique Strauss-Kahn said he would ask members of the Paris Club of international creditors to consider granting debt relief to Albania and Macedonia, the two countries worst hit by the flood of refugees from Kosovo. Members of the Paris Club would be asked to devise ways of treating the external debt of Albania and Macedonia "to allow them to face up to the brutal and unforeseeable shock which followed the crisis. This could for example involve suspending some of the repayments due in 1999 and 2000."

Albania agreed a three-year $47 million Enhanced Structural Adjustment Facility (ESAF) credit with the IMF last May, designed to boost growth and cement economic reforms, the story notes. Majko has put economic reform and privatisation at the top of his agenda since coming to power at the head of a center-left coalition last October. But the war in neighboring Kosovo threatens to derail his program as foreign investment stalls and exports fall, pointing to a widening of the trade deficit.

The cost of supplying power and water to the camps, as well as transporting refugees from collection points in the north to other sites, may also inflate the budget deficit, which stood at six percent of gross domestic product in 1998.

Meanwhile, the president of the former Yugoslav republic of Macedonia said yesterday that despite US and EU aid over the influx of Kosovo ethnic Albanian refugees, his country needed more help, including debt relief, Reuters says in a separate report.

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