Development of free-market economy in Albania

Development of free-market economy in Albania

Development of free-market economy in Albania

Development of free-market economy in Albania

The indicator of economic freedom is designed, starting from four economic pillars, consisting of a total of ten factors that affect the economy:
1. the rule of law (property right, freedom from corruption);
2. Government restrictions (fiscal space, government spending);
3. Regulatory efficiency (freedom of enterprise, freedom of labour, monetary freedom);

4. Free market (market freedom, investment freedom, financial freedom).
The constitution is the actual act that defines the organizational structure of the state, the relations between state bodies with each other, both local and foreign, and fundamental human rights and freedoms. In terms of importance and hierarchy, this act is considered the highest among the state’s legal norms. The constitution itself determines its reputation by predicting the manner of its implementation and the standard value it will have about other legal acts. In this way, the society organized in the state through the constitution’s approval establishes the basic rules that structure this structure’s organization with the community.

Regarding the relationship that the constitution creates with business, it should be said that Article 11 of the Constitution provides: “The economic system of the Republic of Albania is based on private and public property, as well as the market economy and freedom of economic activity. Private and public property are equally protected by law. “Restrictions on the freedom of economic activity can be imposed only by law and only for important public reasons.”
By affirming the fundamental pillars, on which the domestic economy is based, the constitution offers the necessary guarantees to the entrepreneurial activities that take place in the country, whether by local or foreign entities. This means that there is no legal difference in treatment between domestic or foreign entrepreneurs; what is essential is that the law is equal for every enterprise and entrepreneur regardless of nationality.

Trade exchange liberalization
Article 11 of the Republic of Albania stipulates that the Republic of Albania’s economic system is based on public and private property, as well as on the market economy and the freedom of economic activity. Private and public property are equally protected by law. In this sense, according to the Stabilization and Association Agreement, on the issue of implementing the rules of free trade, as a matter of economic nature, Albania should also refer to the interpretative instruments used by the Community institutions.

Under the standstill clause, the agreement prohibits in principle the introduction of any new customs duty, quantitative restriction or measure having the same effect on trade relations between the community and associated state. Existing restrictive measures at the time of entry into force of the agreement may not be added or tightened. Similar provisions are provided in the fiscal field, which requires compliance with the principle of non-discrimination between the contracting parties’ products.
The Stabilization and Association Agreement shall not preclude the safeguarding or establishment of customs unions, free-market areas or different border trade regimes established by associated countries with other countries, with the sole limitation of non-infringement exchange regime provided for in the Stabilization and Association Agreement.

The latter does not prohibit the implementation of agreements previously concluded by one or more EU member states and the associated state. However, this freedom is limited because the contract provides for consultation within the Stabilization and Association Council on the above agreements to ensure that the Stabilization and Association Agreement parties are not affected by their interests. From the deal’s content, we can understand that it indirectly refers to the principle of community loyalty, which is one of the regulatory principles of the EU competencies and requires abstention from taking measures, which jeopardize the realization of the goals of the European Union. The Recipients Stabilization and Association’s trade protection measures as protective instruments of the economies of the contracting parties are safeguards and anti-dumping measures.

Exporting a product at a lower price than the price of this product or a similar product in the domestic market would allow exporting countries to compete unfairly with importing nations, thus threatening the development in these countries’ economic field. A party who is considered a victim of dumping practices may take appropriate action against those practices but notify the Stabilization and Association Council. Stabilization and Association Agreement are available to the community and the associated State trade safeguards.

The parties may take protective measures when imports cause or threaten to cause significant damage to domestic producers or severe concerns to a sector of the economy or a region of the importing country. It should be noted that these measures must respect the principle of proportionality and must not go beyond what is needed to deal with the difficulties. Finally, the state taking these measures must notify the Stabilization and Association Council. The latter must decide to end the problems or find a satisfactory solution within a period beginning on the notification date. The agreement37 determines its duration.

Otherwise, the importing party may take appropriate measures to resolve the problems. In case of urgency, the interested party may take the necessary steps without prior control, but it must immediately inform the other party and the Committee. The provisions concerning the Stabilization and Association Agreement’s safeguards are similar to those governing Community trade, and the general Community principle of proportionality applies to the application of such measures.
Article of the agreement provides justifications for some restrictions on the free movement of goods. These justifications are the same as those provided in Article 30 of the Treaty on European Community regarding public order, public security, public health, etc.
Also, free market means free competition, freedom of investment and financial freedom.
Free competition in Albanian legislation
The concept of free competition in the Albanian legislation is a very new institute, but, of course, in some pictures, it has existed since the creation of the Albanian state.

After independence from the Ottoman Empire, most property and trade relations continued to be regulated by Ottoman legislation until the entry into force of the Civil and Commercial Code in 1929 and 1932, respectively. Coherent with the Albanian feudal reality. In Albania, the transformations and construction of economic and legal systems that took place after 1945, were based on:
• first, building the socialist system with the planning economy by the end of the 1980s.
• second, the construction of a democratic and pluralistic system in the political framework and the market economy of private property after the beginning of the 90s.

From the above, the Albanian civil code provides for three cases of unfair competition that are associated with civil liability, which are: When an entity uses names and distinctive signs which are similar and confused with those of another commercial entity ( this may appear in the content of labels, trademarks or labels) when an entity presents as its own the qualities of the products of another competing entity as well as when an entity uses directly or indirectly a trading tool that does not comply with the principles of professional honesty, and that harms the activity of another entity.

The Law on Protection of Competition has created the institution responsible for protecting competition, which is the Competition Authority. abusive practices such as the Court of Tirana and the Competition Authority is a permanent collegial body, which bases its work on three main pillars, which are:
• Prohibited agreements (cartels);
• Abuse of a dominant position;
• Mergers or concentrations of enterprises.
As can be seen, Albania has also aligned its competition practice with the EU practice and respectively with Articles 101, 102, 107 of the Lisbon Treaty, for more see Chapter 2 on EU competition law. Albanian legislation is low in the definition of state-owned enterprises and the purpose of agreements, and for this reason, it refers to EU case law.

As an agreement, under EU law does not the relationship between the parent and the subsidiary is considered, as the latter act as members of the parent firm. In contrast, the parent’s subsidiary or branch is regarded as an agreement, as they exercise their economic activity in complete independence from the parent firm. Like European law in this field, the Law “On Protection of Competition” and mainly its article 5 point 2 have provided for agreements that are not considered a violation of competition.

Freedom of Investment
Market freedom is closely linked to free competition. At the same time, free competition is a positive element for increasing the possibility of investment release. For this indicator, our country ranks first in the region and Montenegro, and Serbia is estimated at 70.0 per cent. This indicator shows how easy it is to invest in a country; so the higher the rating, the fewer restrictions there are on investments.

Financial freedom
Business is an economic activity. Trade that is, the movement of selling and buying, is often understood as a business, while other economic activity areas, which are business activities, go unnoticed.
The business activity includes services, production, production of goods, production of goods, and distribution activities: anything one can produce or sell to make a profit. Business activity adds value to factors of production. This added value brings money, which is used to pay suppliers, employees, lenders, government (through tax payment) and landlords. Any particular business’s success will be judged if all these participants in the industry are satisfied.

In a market economy, the needs of customers are primary. If there is no one to buy, then there is no market, no business. A business must provide a product or service that meets its customers’ needs in the first place.
Successful businesses seek to meet the wants and needs of their clients. Environmental factors affect a business. Therefore the company may be more or less important at a given time. Business leaders need to be vigilant about changes in the environment and need to know when one or more environmental factors become critical.

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