FROM

Dritan Gremi

A strong lek, a weak economy: only the euro as the sole currency can protect Albanian businesses

An invisible crisis destroying the economy

Shqipëria është futur në një krizë që nuk duket me sy të lirë, nuk shfaqet në rrugë me protesta e as në ekrane me grafiqe të kuqe alarmante, por është një krizë që po ndodh çdo ditë në xhepat e sipërmarrësve, në buxhetet e bizneseve dhe në planet e të rinjve që mendojnë emigracionin si zgjidhje.

Në katër vitet e fundit, kursi i këmbimit euro/lek ka ndryshuar në mënyrë dramatike:
1 janar 2021 → 1 € = 123.37 lekë
3 tetor 2025 → 1 € = 96.78 lekë

Pra, në vetëm katër vite, euro ka humbur mbi 21.6% të vlerës. Kjo nuk është më një statistikë për librat e ekonomisë. Është një tatim i padukshëm që po u merret çdo ditë bizneseve që punojnë me valutë.

The hard facts: table of real losses

Two Strikes That Destroy Businesses

1. Decline in revenue in lek: every euro earned today is worth 21% less.
2. Increase in costs in lek:
  – Salaries have risen not only to reflect inflation but also to slow down the massive emigration of workers abroad.
  – Insurance contributions and taxes have increased, further adding to the costs.
  – Market expenses (rent, energy, materials, transport) have risen significantly.

This is cold math: a normal business rarely achieves more than 15–20% net profit on gross turnover. With a 21% drop in revenue and rising expenses, profit has disappeared. Many businesses are now operating at an operational loss.

So this is no longer a matter of management or strategy. It’s an impossible equation.

Why Can’t We Raise Prices?

Many might say: “Raise your prices in euros.” But that’s not a solution.

Here I take dental tourism as an example — the field I know best:
– Regional competition is relentless: Zagreb, Budapest, Bucharest, and Belgrade offer similar services at lower prices.
– Tirana is not perceived as a premium European center: foreign patients and tourists expect more favorable prices.
– Demand elasticity: every strong price increase leads to fewer clients and loss of market share.

So Albanian businesses are trapped: they cannot raise prices, yet they lose money every day because of the exchange rate.

The First Solution: The Euro as the National Currency

Albania cannot continue to destroy the most vital sectors of its economy. The only long-term solution is to remove the lek and adopt the euro as the sole national currency.

The benefits are clear:
– Financial and monetary stability – the exchange rate will no longer be a risk.
– Investor confidence – a stable and predictable market.
– Protection for tourism and exports – restoring competitiveness.
– Opportunity for higher wages – businesses free from exchange rate pressure can genuinely increase employee incomes.

The Second (Emergency) Solution: Intervention by the Bank of Albania

If full euroization does not happen immediately, then swift monetary measures must be taken.

– Until 2019, second- and third-level banks held 25% of their reserves in foreign currency as a mandatory reserve.
– After 2019, this rate was reduced to 15%, releasing an oversupply of euros and causing an artificial strengthening of the lek.
– In the current situation, restoring the 25% rate is not enough. It must be increased to 30% to curb the excessive currency supply and stabilize the exchange rate.

This is a simple and direct instrument that the Bank of Albania can and should use immediately.

Conclusion: Between action and collapse, I would never stand idly by — I would choose the first a thousand times over.

Every day that passes, Albanian businesses lose revenue solely because of the exchange rate. Every month, wages increase and costs rise. Every year, hundreds of companies move silently toward bankruptcy.

Today, Albania faces a historic choice:
– Either it adopts the euro as the sole currency and puts an end once and for all to this monetary absurdity.
– Or the Bank of Albania intervenes urgently with strong policies, setting foreign currency reserves at the 30% level.

Any other alternative is simply the prolongation of agony.

The euro is the only weapon against collapse.