The economic recession in Albania and Italian infiltration : the loan of 1931

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Eleutheria Manta

Abstract

During the period after the First World War, Albania was the least
developed of the Balkan countries, as was apparent in all sectors of its
economic life. The economic situation was further exacerbated in the early 1930s, when the effects of the world economic crisis began to
make themselves felt in the Balkans. As a profoundly underdeveloped
country, Albania was much harder hit than the other Balkan states.
Incapable of coping with the relentlessly mounting problems, the Albanian government appealed for economic aid from Italy, Albania’s great
ally, who was the only power that was prepared to make a loan which
no-one expected would ever be repaid. Italy’s main intention was to
gain complete control of the Albanian administration (as it had already
done with the army). According to the terms of the 1931 economic agreement, Italy was undertaking to lend Albania ten million gold francs annually for the next ten years for the purpose of balancing the state budget and assisting the
country’s development in the sectors of public works, economy, and
education. With this agreement, the Italians attained their primary goal,
which was total administrative and financial control over Albania: the
committee that was to supervise the spending of the loan and the
organisers-advisors who were to be appointed to four vital ministries
would form the base from which that control was exercised. If one bears
in mind that control of the army was also in Italian hands, it is clear how
far the Italians had already infiltrated the country.



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