THE NATIONAL BANK OF ALBANIA AND THE AGREEMENT WITH ITALY ON THE SVEA LOAN DURING THE YEARS OF THE ALBANIAN REPUBLIC, 1925–1928

Abstract

The economic situation of Albania in the years 1925–1928 presented a number of distinctive features that played an important role in the country’s economic development. During this period, one of the problems requiring an immediate solution was the absence of a national bank, an institution that the country had lacked and whose absence had greatly complicated its economic survival since the proclamation of Independence. For this reason, the establishment of the National Bank of Albania in March 1925 is considered a key moment in the economic developments that took place during the 1920s and 1930s. It also played an important role in the issuance and minting of national coins and banknotes.
After the Albanian state succeeded in equipping itself with a banking system, in order to create a stable economic situation it secured financial assistance from the Italian state amounting to approximately 50 million gold francs. This assistance was known as SVEA, or Società per lo Sviluppo Economico dell’Albania (Society for the Economic Development of Albania), whose primary objective was the economic recovery of the country through investments mainly directed toward the construction of public works, such as roads, bridges, and ports, as well as toward the development of agriculture. The convention between the Albanian government and the Society for Economic Development (SVEA) was signed in May 1925. The investments carried out by this institution somewhat improved Albania’s economic situation in sectors such as industry, trade, communications, and infrastructure. Nevertheless, the difficult situation in the agricultural sector— the principal branch of the economy—continued to remain a matter of concern.
The agreement for the establishment of the National Bank and the loan granted by SVEA were two arrangements that Ahmet Zogu, President of the Albanian Republic, managed to sign with Italy in order to continue the path of reforms that had been initiated and to transform the country’s economic situation. However, how effective were such reforms? How did the economic landscape of Albania change during the years of the Albanian Republic (1925–1928)? Drawing primarily on archival sources and a substantial body of literature, and employing the method of comparative historical analysis, this study seeks to reach as objective conclusions as possible regarding the issues raised by such questions and to contribute, albeit modestly, to the enrichment of studies on several economic aspects of the period in question.