The government rejects the accusations of “The indipendent” The editors are to immediately retract the lies against the Albanian Government Page 4

Address by President Berisha at the meeting with the citizens of Tirana - The long tolerance of usury has been an element of the general tolerance of free initiative, commerce and business. First, in Albania usury is a legal activity, entirely private, unlicensed by the state and guaranteed by the Albanian Civil Code. Second, laws and regulatory boards for foundations have been lacking. Third, overall, these were companies investing in various fields. - I call on all Albanians not to agree with or accept that absurd mentality, which has nothing in common with our morality and civilization, and which seeks to shift onto or blame others for individual responsibility for the loss of money lent in the hope of making a profit. I make this appeal not to defend one or five governments, but because if we Albanians submit to the primitive mentality of blaming others for the individual responsibility each of us bears, we will go off the tracks of human morality, justice and our foundations, and we will face tumbling consequences of... The free individual is responsible for his property In our dialogue with people, while accepting the responsibility that is ours, we must agree and establish that those who voluntarily entrusted their money were directly and primarily responsible for this phenomenon. In no democratic country is this responsibility assigned to others, to third parties, much less to the government. No civilized person can blame a third party for a debt he gave of his own decision, for his own interest and profit. In the ethical and moral code of every civilized person, of every Albanian, and of over 95% of those who lost money, private debt is an intimate private matter, regulated by the laws of all countries as a matter between the contracting parties. Our position on this issue is vitally important for the present and future of democracy, capitalism and Albania as a whole. If we are not on the right side of this issue, we will never build democracy, the free market and capitalism, but deception and nothing but deception. If an individual does not accept responsibility for his money, profits and initiative, he will never have a secure future. If the state does not stand by this principle, it cannot be a state governed by law, but a state of deception. In all this, I do not wish to blame or burden anyone, but it is neither consistent with our integrity and morality as Albanians, nor with that of civilized people, to shift the blame onto others instead of honestly and calmly drawing the lessons and accepting the responsibilities that are ours. There can be no compromise here. For free initiative, property... First, in Albania usury was an entirely private activity, - The government has not supported and does not support pyramid-scheme activities. It is determined to punish them severely, as well as any other fraud against citizens. This is also our open response to all the immoral accusations that the Government is involved in these activities. We have gathered today at this meeting in a situation in which Albania needs our calm, wisdom and determination to assess and overcome its consequences. Today, when hundreds and thousands of Albanian families are experiencing the despair of losing their savings and profits in fraudulent pyramid schemes, a minority made up of a mixed group of extremists—many of whom have not lost a single penny in these schemes—and the forces behind them are seeking, for their nefarious, undemocratic interests, to turn a serious but not insurmountable financial blow into a true national tragedy. This minority is supported above all by the silence of hundreds of thousands of others, whose pain at their losses must under no circumstances make them accept what is happening. I have also come here before you to talk with you and try to influence all those seeking information, so that they may learn the truth about usury, its rise and its collapse. Full transparency from the government I believe that the most fundamental condition for dealing with this problem is full transparency on the part of the Government, the state and the Democratic Party regarding the phenomenon of “usury,” and our unwavering determination to address it entirely within the rules and laws of the state governed by law. Today, more than ever, it is essential that all of us—Albanian citizens, intellectuals, young people, employees, traders, businesspeople, workers, farmers, and all members and supporters of political parties who oppose violence and want democracy—engage in an intensive dialogue with people about this collective phenomenon, discuss transparently why it appeared, what it represented, establish responsibilities and contribute to overcoming its consequences. This phenomenon has accompanied capitalism throughout the ages. In Albania it began in 1991, and until 1996 no political party, coalition or opposition, no individual, representative, organization or association publicly denounced the phenomenon or set out its grave consequences. Today, there are various explanations for the silence of all political forces, the Government and other institutions, experts, financiers, economists, specialists and Albanian academic circles regarding this foreign phenomenon. In my deepest conviction, the decisive factors behind this prolonged silence were: - Albanians’ unfamiliarity with capitalism and the laws of the market. We entered the 1990s perhaps as the country whose people, because of hyper-collectivism, had lost all traces of the free market from their memory. This led many Albanians to believe that capitalism was a system for getting rich easily and quickly. - Respect for individual free initiative and a lack of knowledge about pyramid schemes; - The legislative vacuum that provides room for free initiative; - Albania’s rapid economic growth, resulting from the liberal standards we adopted, kept alive and nourished the belief that it was possible to get rich quickly. - In many cases, the not unsuccessful use of usury by traders to secure their business activities in the absence of credit and capital. - Serious investments in Albania by some usury companies. In these years, Albanians are experiencing the great lesson in the market and capitalism of their history. They did not put their money into these schemes in order to earn money there that had been taken from other citizens, much less dirty money; rather, they put it there mainly because they believed in the high profits earned in Albania by companies in trade, construction and other fields. The government never encouraged usury. The opposite is true. We offered depositors bank interest rates on their deposits that were the highest in Europe. Those who deposited 1 million lekë in banks years ago now have 2.17 million lekë because of the high interest rates, which, converted into dollars, is around 100% more than four years ago, while the value of the lek against the dollar has changed by no more than 10%–15%. Likewise, unlike in some former communist countries, no state institution in Albania has been involved or implicated in this activity. I assure those who claim that the Albanian Government is implicated that they will be disappointed by the falsehood they are spreading. Broad responsibility for the failure to warn Nevertheless, it can be said that none of today’s political forces can escape responsibility—least of all the opposition parties, which had the fraudulent foundations among their ideological allies and financial supporters, or built their campaigns on a veritable pyramid scheme. But while the opposition forces, deeply immersed in the pyramids of fraud, failed to warn people, the Democratic Party, the Government and the other state institutions also failed to do so in time. Therefore, there is undeniable responsibility for this failure to warn, greater on the part of those in power, which all of us, beginning with me, must acknowledge. In the second half of 1996, the IMF expressed its serious concerns about the informal market and insisted that the public be informed of the danger posed by high interest rates. This institution bears no responsibility in this matter. Several weeks ago, I apologized to all those citizens who, in truth, would not have put their money into these schemes if we had explained pyramid schemes to them. I do not know how many there would have been. But why did I not warn them of the danger they posed? The only reason was that I could not foresee it; we had no evidence that they were pyramids, and since this was an entirely private activity, spread across a collective frenzy, my direct warning about their danger might have prompted the fraudsters to raise the interest rates and exaggerate them. I am firmly convinced that the collective gold fever could not be overcome by warning of the danger, but by studying its nature and adopting appropriate legal measures. The truth is that after the official warnings, the phenomenon reached its peak, and although much was said in recent months about the danger of high interest rates, few listened even to those closest to them when they warned them of this great danger. My statement about Albanians’ clean money also contained a warning to fraudulent borrowers not to toy with your sacrifices, hard work and sweat, but this was not enough. Nevertheless, I believe that responsibility lies not only in the failure to warn, but also in the indifference and prolonged tolerance of this activity, and the delay in setting up the parliamentary commission. The question may more rightly be asked: why this prolonged tolerance of them? The long tolerance of them was and business. First, in Albania usury was guaranteed by the Albanian Civil Code. Second, there were no laws and regulatory boards for foundations. Third, overall, these were companies investing in various fields. In our approach, we have been tolerant of all investors. We have tried to be as understanding and lenient toward them as possible. This is because if you went back four or five years, the streets of Tirana were full of “capitalists” selling boiled eggs, pieces of cheese or meat. Their goods were not in shops or supermarkets, but out on the streets, on trays, handcarts and stalls. We wanted them to grow and, together with them, for the Albanian market to grow. In these years you have heard of no strike, no protest, no businessperson of any kind or nationality taking hostile action against the Government’s taxes or duties. Thus, the tax and fiscal mechanism that could have been used to monitor their non-usurious, investment activity was applied to a certain extent to all Albanian capitalists without any discrimination. In fact, there is no document in which any individual or institution called for usury to be banned before 1996. At the beginning of 1996, and particularly after the Bank of Albania Law was passed in March ’96, one article of which does prohibit deposits but provides no sanctions against those collecting them, this institution insisted that the Government intervene against these companies. But the legal conflict between the Civil Code, which regards lending and borrowing as a lawful, private, unlicensed civil right of every citizen, and the article prohibiting deposits in bank accounts could not be resolved through executive action. It had to be resolved only in court, and this absolved the relevant institutions of responsibility for failing to exercise their institutional authority to uphold the laws. Responsibility to a certain degree also lies in the fact that some Democratic Party leaders at the district level, unaware of these companies’ pyramid-scheme financial activity and motivated by the Democratic Party program’s support for domestic and foreign investors, appeared at campaign events alongside representatives of usury companies that had investments in various fields, although never alongside representatives of the foundations. They should apologize for this unwitting mistake, and if they were involved in anything contrary to the laws, they should bear the responsibility due to them. We would not blame one or five governments, because if we Albanians submitted to the primitive mentality of blaming others for the direct responsibility each of us bears ourselves, we would go off the tracks of human morality and our civilization, and great upheavals would await not only us, but our children, Albania and the Albanian nation. ours. There can be no compromise here. For his free initiative and private property, the free individual—and he alone—is directly responsible. It is up to him, and him alone, to decide and determine where to deposit or invest his money. This is the society we are building. If people do not take responsibility for this themselves, but pass it on to the state, that would be the surest guarantee that they would lose their money even faster. Usury is dealt with only within the framework of the state governed by law After belatedly assessing the danger of these activities, we have dealt with, and decided to deal with, the entire phenomenon and its consequences Since there were no laws regulating and prohibiting this activity, we passed a transparency law, established an independent commission to monitor them, and banned them with the anti-pyramid law. Our position is clear-cut. is involved in these activities. But unlike other democratic countries, where only the courts deal with bankrupt companies, we decided that the Government should also become involved in order to ease the situation that had arisen. Someone may ask why we, as a Government, intervened in this process instead of leaving citizens to deal with their contractors themselves in court. I believe that, considering capitalism a system that must be learned, we were right to intervene, and that our intervention was socially just, proper and consistent with the rules of a free society. We did not assume the debt. No democratic government can assume it, because from the moment it takes responsibility for repaying a debt it did not contract, it becomes a predatory government, ready, to preserve its seat or power, to fleece citizens with high taxes or deceive them by printing banknotes and thereby creating inflation. Only governments based on deception can do that. But, on the other hand, through a new, favorable law, we decided that all frozen deposits and all the real estate belonging to these criminal usury companies should be returned to citizens. We undertook to determine quickly the relief measures to reduce the penalties imposed and increase these companies’ returns; then the investors’ assemblies and boards of directors would manage them. Continued on page 3

Së pari, në Shqipëri fajdeja ishte një veprimtari tërësisht private e palicencuar nga shteti dhe e garantuar nga Kodi Civil Shqiptar.