The President: I do not guarantee the companies VEFA, Kamberi and Silva World Bank: We do not finance half-pyramid, half-investment companies “The money will be given to those who need it most, while the others will be pleased to receive savings passbooks,” Berisha said yesterday at the press conference. “Money will be given to those who need it most, while the others will be pleased to receive savings passbooks,” Berisha said yesterday at the press conference. More than ten times the president stressed that the money would be distributed gradually, so that inflation would remain under control, until eventually the idea of savings passbooks suddenly occurred to him. Thus, the passbooks prove that Berisha has no intention of and cannot immediately hand over the frozen money of the foundations to the people. The promised date of 5 February for the start of the distribution of money is only a small gesture to soften the public hatred toward those who stayed silent for four years while the usury schemes flourished, toward those who still continue to regard the Albanians’ money as the cleanest in the world, and toward those who so eagerly accepted sponsorship from the rent-seeking firms. Some banking specialists, who do not wish to be identified, explain Berisha’s passbook idea as follows: The state will provide investors in the pyramid schemes with several savings passbooks. If a citizen has invested 10,000 dollars in Xhaferri and only 9,000 remain, he will not receive them in hand. Instead of cash, the citizen will be given a savings passbook, without the right to withdraw the money immediately from the deposit. According to the specialists, citizens, at monthly or three-month intervals, will be able to withdraw through the passbooks only the bank interest earnings. Given that today the highest bank interest rate is 20% per year, it follows that the investor who receives 10,000 dollars in a passbook will in fact be able to withdraw only 166 dollars a month, or 2,000 dollars a year, from the bank. Otherwise, under the passbook variant proposed by the president, the money for 10,000-dollar deposits could be returned only after five years. Before the collapse of the usury schemes even began, the domestic press had warned Berisha that he would find himself in a vicious circle if he did not intervene in the informal market. Only two paths remain for Berisha and the cabinet he leads: either to give out the frozen money and the money that will be frozen, or to block it through the banks and release it in installments. But Berisha cannot immediately give out either the frozen money or the money that will be frozen. If Berisha were to do this, the money would certainly flood into the market to be converted into foreign currency or goods. The panic that has gripped the foreign-exchange market is the panic of citizens who these days are rushing to convert their money into hard currency. Since 5 February is very near, the release of money into the hands of ordinary depositors, outside the bank counters, would terrorize the foreign-exchange market, leading to a rampant devaluation of the lek, followed by an immediate rise in prices. But it seems Berisha has not chosen this catastrophic path for the country and its economy. Yesterday, almost inadvertently, at a press conference, he floated the idea of savings passbooks instead of real money. (To be continued on page 8) EMIN BARÇI

One of the demonstrators detained during yesterday’s rally in Tirana Photo: Reuter

According to a reliable source inside the “Gjallica” branch in Vlorë, co-president Fitim Gërxhalliu has secured all the money for his creditors and is in the final stages of preparations to begin paying out deposits together with the interest on 6 February. However, it is revealed that “Gjalllica” refused to clarify how, in the first five days of December ’96, nearly 60 million dollars were lost, what responsibility finance director Hysen Velia, general counsel Shefqet Muçi, and the branch’s Vlorë lawyer Xhevdet Hamzaraj bear? “It also refused to clarify Flutura Hasko’s relations with the leaders of ‘Gjalliqa’ in Tirana. In any case, Fitim Gërxhalliu is making the final serious preparations to hand out the money on 6 February. If his promises are carried out, let us see the date of 6 February, the date when creditors should be at the counters of ‘Gjalliqa’ early in the morning. A.N.

The shock of the usury schemes has affected everyone: foundations and companies. Even the strongest are feeling the shivers of late January. As it appears, the month of February will be even colder for the companies as well as for the creditors. The creditors of “Gjallica” and “Sude” apparently have, for now, lost their money for good. At least the government has offered no solution. The creditors of “Gjallica”, “Vefa”, “Silva”, Kamberi, and “Cenaj” remain anxious about the fate of their money, while the “solution” for the creditors of “Xhaferri” and “Populli” was called the handing out on 5 February of passbooks instead of cash. But an original solution is emerging from the companies themselves. A company president, who is also negotiating with the president of the pair of rent-seeking companies, offers a solution to get both sides out of the collapse: both creditors and companies. The proposal, according to him, is: “All creditors should agree to receive their deposits together with only 3% interest per month. For example, if someone has put 10,000 dollars into company X with 8%, in addition to the 10,000 dollars he will receive only 3% interest per month and, over 6 months (as long as such a contract may last), he will receive only 18% interest in total. This is a way out for everyone. Otherwise, we will all be left empty-handed. But this must be done equally for everyone and by a government decision...” M.S.