Dashnor Kaloçi
Memorie.al/ publishes the unknown story of the economic agreement that the Italian Prime Minister, Benito Mussolini, made with the government of the Zog Monarchy in the early 1930s. How the press of the Monarchy covered all the discussions that took place in the parliament and the report of the Minister of National Economy, Dhimitër Berati, before the deputies of the Parliament in April 1936, for that much-discussed agreement that the communist regime of Enver Hoxha and the official historiography before the ’90s she considered it as:’ slavery of Albania ‘.
Among the many accusations that the official historiography and propaganda of Enver Hoxha’s communist regime made for 45 years against King Zog, one of the most important was the economic agreement that Zog concluded with the Italian government of Prime Minister Benito Mussolini (Duce), described that agreement as a slavery of Albania, which then forced King Zog to capitulate before the powerful state across the Adriatic and to accept the ‘de jure’ occupation of Albania on April 7, 1939 by the Duce’s armies. But what exactly was that economic agreement, what were its main points, under what conditions was it concluded and how was it actually implemented in practice?
In this regard, in this article we are publishing a part of the report held by the Minister of National Economy of the Albanian government, Dhimitër Berati, before the deputies of Parliament in early April 1936, where he made a detailed analysis with figures and facts., to all the points that were set out in that much-discussed agreement and how it had been implemented in practice up to that time. We are publishing the entire report of Minister Berati without any changes, as it was published at that time by some of the main newspapers of the Zog Monarchy.
Report of the Minister of National Economy, Dhimitër Berati in Parliament
The agreements presented by the Government to the Parliament for approval, as can be seen from their content, have all been of a purely economic nature. If we look, then, we will generally notice that they have a strong commercial character, which means that they are based on the principle of considering the mutual interests of the contracting parties. But, does this mean that your benefit is to oversee the work of the trade, it is equal for one party as well as for the other party? To say so would diminish the value of the agreements themselves and the benefit that must necessarily result for us from their implementation. The benefit of different agreements, even if taken separately, is very obvious for the economy of our country. From this point of view, there is no need for detailed explanations. With all this, we do not say that we will not have any flaws. We must not forget that no such agreement, when it has a bilateral character, is the end of a compromise between the two contracting parties. Their provisions that may now appear with a natural form and meaning. As I said it turns out, today they are quite far from the original or initial form. Despite this, they are and remain quite favorable. At this point we need to understand something in order. The agreements presented are the conclusion of the negotiations that have continued between the two Governments for a long time.
Minister Berati: Duçja told me that we will overcome the disputes
Their good conclusion does not come only from the treatment and careful consideration of all the issues that were discussed, but more strongly from the spirit of good intentions and reconciliation from the kind and careful understanding that reigned during these talks from the Italian side. When I laughed in Bari, at the fair (fair, Our Note), of that city, I had the honor to bake (meet), the Duchess. Ay said to me: “Some light clouds have gathered in our relationship; We will distribute them soon. ” The President of the Italian Government quickly fulfilled the promise we also wished. Today’s relations are based on these basic directives. Our greatest satisfaction today must be the scattering of the clouds in question; clarification of the atmosphere desired by both sides. But good intentions are also needed for good performers. The Italian government found this in the person of Shk. Mr. Mario Indelli, with whom I had the honor to talk from the day of his arrival in Tirana and to conclude these agreements on behalf of our Government. From now on, I am publicly expressing my warmest thanks to his master for the broad understanding and kindness he has shown without interruption during the talks.
General understanding of chords
Let us now make a summary of the agreements to derive a general understanding and explanation. 9 agreements have been submitted to the Parliament for approval but there are 3 others that do not need special approval. It is the “General Trade Agreement”, which can be put into action on the basis of the law dated 21.II.1934 which law authorizes the government to enter into temporary trade agreements. Then there is an agreement between the Ministry of Economy and the Italian Association EIAA, which as the agenda of a parastatal Entity with a wide organization in Italy-Opera Combatenti-, undertakes to help the development of Albanian exports in Italy. We are remembering these here as well, as they are no less important than the others. It is time to recall that the trade part was given the main importance in the talks that took place. The third is a loan to the S.V.E.A. all agreements can be grouped into two groups. The first group includes six agreements of a financial nature. The second group includes six agreements of a stronger economic and trade nature. At the head of the first group we have the agreement for the repayment of the 1931 agreement, for the ten-year loan of ten million gold francs. Now, definitively resolving the issue of this loan, the implementation of which, as is well known, has been suspended since April 1933, several new agreements were concluded, with new conditions, but always with a spirit emanating from the common desire of sincere cooperation. The agreements, so we can say how they took the place of that of 1931, are these six:
- 1931 Loan Liquidation Agreement.
- Regulation of the financial situation of the state, or more precisely, the liquidation of the debts that the state owes to the private sector.
- A loan of ten million gold francs for agricultural purposes.
- A three million gold franc loan for the creation of a tobacco monopoly, directly from the state.
- An agreement by which the Italian Government undertakes to find us a sufficient loan for the organization and equipping of the pier (Port) of Durrës.
- A temporary understanding of the S.V.E.A.
- To these can be added a 7th meaning which resolves the misunderstanding between the Albanian State and some Italian firms about the damages they claim. In the second group we have six other agreements, which, as we said, have an economic and commercial character. Three are affiliated with the Italian government and three with Italian entities, which, given their rand, are of course of interest to the Italian government as well. The agreements are as follows:
- Agreement on some tariff changes in the Trade and Navigation Treaty we have with Italy.
- Temporary trade agreement for the export of Albanian goods to Italy on the basis of the contingent.
- Veterinary Health Convention; the first that connects our state like this.
- Agreement with Friend E.I.A.A. to facilitate the export of Albanian goods to Italy.
- Agreement with Friend E.I.A.A. for the implementation of the Agrarian Reform in the Rrushkull estate that it rents.
- Agreement with the Administration of Railways (Railways, our note), of the Italian State on the Albanian oil concessions.
Explanation of agreements
We will now take all of these agreements, one at a time, and explain, as clearly as possible, their content and, briefly, their history.
Liquidation of the loan 1931
We are starting with the first agreement of the financial group, i.e. the object of the settlement of the agreement on June 26, 1931, was connected with an exchange of notes in Tirana, and with which the Albanian Government was promised a loan of 100 million gold francs, repayable in ten years from 10 million, with several conditions which regulated the versus (delivery) of money. Relying on this loan, the Albanian government had begun implementing a comprehensive program of state construction and reorganization that was to revive its economy. Payments from the funds of this loan continued regularly in April 1933 and then were suspended for various reasons, which it is of no use to list and study here now. From the date that agreement entered into force and until the beginning of April 1933, 9,200,000 gold francs had been paid from this loan. Of course, the agreement has always remained in force, only its implementation was suspended. From this situation arose many issues, for which both parties have wanted to find a way of settlement. Today it can be said that this appropriate way was found, according to the situation and the possibility, to give the whole issue a new form and to clarify the situation with the complex of agreements and new foreigners. Thus, the loan agreement of June 28, 1931 takes the pound with the new agreement. Shqipnija waives any claim regarding this loan. The Italian Government undertakes to wash, within two months of the entry into force of the agreement, all mandates which have been approved by the Italian Delegate of the Loan Commission, but whose payment has been suspended since April 1933. The sum of these mandates reaches. 2,104,390 gold francs. It is true that a large part of this amount is to be paid on time by the Italian Government, yet it remains to pay the arrears that have been mentioned several times in Parliament and in the press. A joint commission will then be formed to review and eventually pay the mandates that have been issued by the state administrations on behalf of the loan, but have not been accepted by the Italian Delegate of the loan commission. As is well known many works were started in the hope of a loan on June 26, 1931. Some of these works remained halfway; several others were carried out with S.V.E.A. loan funds. even with ordinary State funds. Of course, the Government could not allow these constructions to be demolished while waiting for the loan issue to be resolved. This delay would have caused the loss of capital to invest in the part of the work to be done, so the Government avoided this risk. There are other design and unfinished works. These will not be discussed, but three constructions from those that have started and are not finished, will be carried out now, but from the funds of this loan; is the general warehouse of Durrës, the industrial school in Korça and the Stallion Stables in Xhafzotaj. These constructions cost almost 200,000 francs. In connection with these agreements, the issue of the opposition that the state had with two Italian companies was resolved: “Ragazzi” and “Venanzetti”. These companies demand from the state almost 1,500,000 francs for dams that they claimed to have suffered in the enterprises of Krue-Burrel, Shkodër-Puk and Tirana-Elbasan. They support this request and said that the dam was provoked for reasons that were not in their hands to avoid. To some extent, our offices had accepted the right to award a sum of damages, but not as much as they demanded, the Italian Government agreed to take over the resolution of this misunderstanding, adjusting it with the amount we claim that it was provisionally obtained from SVEA loan funds to afford the initial works with loan funds 1931. This amount captures 557,616 fr. And will serve to definitively liquidate the claims of the firms in question. Finally, the Italian Government rejects any claim for the return of the installments paid by it to the account of the 1931 loan, i.e. 9,200,000 fr. As well as the amounts to be paid now, on the basis of this chord.
Deficit
Now let’s come to the agreement “On the financial situation system of the Albanian state”. This d.m.th. in other words, the liquidation of the state deficit; exactly say most of the state deficit. Of course, this agreement is also closely related to the first. At the end of the financial exercise 1934-1935, the financial situation was presented as follows:
6,000,000 fr. Mandates to be issued and paid.
500,000 Deposits put in the coffers to be returned to the private sector
2,800,000 Agrarian Bank funds borrowed from the state.
2,000,000 non-funded passive arrears, i.e. expenses that have been incurred in extraordinary and urgent cases, and which amounts have not been foreseen in the budgets of the outsiders.
i.e. that a total of 11,500,000 francs are collected from us. It is true that 2,000,000 fr. which we mentioned at the end, is an issue that needs clarification, that it may not be exactly so; the relevant accounts should be reviewed in detail to find out exactly how much this state debt owes. In addition, we have an accurate floating sea that captures 9,500,000 fr. Considering the need to once again improve the financial condition of the state, given that this large deficit for our state stands as a dangerous bulwark on the state credit and hinders the smooth running of financial operations, the Allied Government, in relation to with other agreements, agreed to advance to us the amount necessary to liquidate this debt of the state to the citizens. Three million of these deficits, as you know, has been poured since the Fruer (February) of 1935. Another six million will be disbursed (disbursed), in three installments: 4,200,000 during the financial year 1936-1937, 9,000,000 after one year and 1,000,000 in the year 1938-1939. Of this total, 2,800,000 belong to the Agrarian Bank, which in this way hopes to be able to start operations as soon as possible, as we have said in previous cases. It is foreseen in the agreement to liquidate, at the same time with the others, those debts that belong to the Italian firms for bame supplies to the Albanian administrations, but these do not reach a large amount; exactly 384,522.
Agricultural loans that Albania took from Italy
First of all, we have an agricultural loan of ten million gold francs, which will be paid in five annual installments of two million and this payment must start within two months from the entry into force of this agreement. As per the provisions of the agreement, this loan has a specific purpose; will serve only for the agricultural and livestock development of the country. Part of the loan will be poured with the material we will need. We will select and order this material ourselves, as needed. Its payment will be calculated in loan cysts, not less than half a million per year. But that does not mean that we should take all this money, even if we do not want to, right away. It is therefore foreseen that it will be bought according to the need and what is not bought in one year can be bought in the following year. Only that no more than a million and a half years of money is poured in; this, except the first year, d.m.th. this year, when we will buy merchandise even less than 500,000 fr. and the surplus will be poured into cash. Considering that this loan will be used for a long period of time and judging that the effects of its improvement will not appear immediately, but as a few years pass, the fruits of the investments that will be made will be felt. This period was agreed to be set for a period of ten years, starting from the use of the first installment. The repayment of the loan will therefore begin five years after the last cyst’s version. The interest will be one percent and the annual amortization cycles will be from 275,900 fr. The loan will be repaid in 50 years, a total of 13,800,000 fr. It means that in 50 years the lender will be paid, in addition to the capital, a total benefit of 275,899 fr. For every year. The agreement also envisages a commission in the Ministry of Economy to determine the goods that will be ordered in Italy, where the Technical Advisor of agriculture will participate, as is done today.
Minister Berati: This is how all states have acted
In the economic agreement that King Zog’s government entered into in the early 1930s with the Italian government headed by Benito Mussolini (Duce), one of its points also referred to the tobacco monopoly that the Albanian government should sanction. Regarding this, in his report before the deputies of the Albanian Parliament, the Minister of National Economy, Dhimitër Berati, among other things, said: “Let us now explain the loan agreement that will serve to establish the tobacco monopoly. As it is known, the issue of creating a tobacco monopoly has been dealt with by the Government for almost two years. From the very beginning, the Government has been thinking of creating a State monopoly to regulate both the production and trade of tobacco. Well yes, this monopoly system required funding and the State lacked these. He then tried a second system that seemed to be realized faster, i.e. creating a monopoly with private enterprise. A project was drafted and announced on this proposal, many talks were held about it with foreigners and locals, but a conclusion that fully corresponds to the interests of the State could not be reached. In the talks with the representative of Italy, about other issues, the possibility of a loan with good conditions for the creation of a state tobacco monopoly was raised and they reached an understanding. The agreement in question provides for a loan of three million gold francs, to be repaid in two annual installments and without interest. The loan will be repaid in 15 annual installments of 200,000 francs each, and repayment of these installments will begin three years after the loan has been repaid in full. To create a tobacco monopoly we will, of course, need technical, competent people. The Albanian Government will request these from the Italian Government and it agrees to provide us with this necessary technical assistance. The tobacco loan will be guaranteed by the monopoly income. These revenues, when we have a properly organized monopoly, it is reasonable to increase to a greater extent than it is today. I am not going into the details of the issue, which will be discussed in due course, but I just want to add that this is the form of monopoly that has been accepted by almost all states. This is self-evident when we consider that the tobacco monopoly is the main source of income among many countries; b.f. “In Yugoslavia, for example, almost all foreign loans are guaranteed only in the income of the tobacco monopoly.” Memorie.al
