EUROPEAN COMMISSION Brussels, 6.10.2020 SWD(2020) 354 final COMMISSION STAFF WORKING DOCUMENT Albania 2020 Report Accompanying the Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions 2020 Communication on EU Enlargement Policy {COM(2020) 660 final} - {SWD(2020) 350 final} - {SWD(2020) 351 final} - {SWD(2020) 352 final} - {SWD(2020) 353 final} - {SWD(2020) 355 final} - {SWD(2020) 356 final} EN EN Table of Contents 1. INTRODUCTION 3 1.1. Context 3 1.2. Summary of the report 4 2. FUNDAMENTALS FIRST: POLITICAL CRITERIA AND RULE OF LAW CHAPTERS 8 2.1. Functioning of democratic institutions and public administration reform 8 2.1.1 Democracy 8 2.1.2. Public administration reform 14 2.2.1. Chapter 23: Judiciary and fundamental rights 18 2.2.2. Chapter 24: Justice, freedom and security 37 3. FUNDAMENTALS FIRST: ECONOMIC DEVELOPMENT AND COMPETITIVENESS 51 3.1. The existence of a functioning market economy 51 3.2. The capacity to cope with competitive pressure and market forces within the Union 57 4. GOOD NEIGHBOURLY RELATIONS AND REGIONAL COOPERATION 59 5. ABILITY TO ASSUME THE OBLIGATIONS OF MEMBERSHIP 62 5.1. Chapter 1: Free movement of goods 62 5.2. Chapter 2: Freedom of movement of workers 64 5.3. Chapter 3: Right of establishment and freedom to provide services 64 5.4. Chapter 4: Free movement of capital 65 5.5. Chapter 5: Public procurement 67 5.6. Chapter 6: Company law 69 5.7. Chapter 7: Intellectual property law 70 5.8. Chapter 8: Competition policy 71 5.9. Chapter 9: Financial services 72 5.10. Chapter 10: Information society and media 74 5.11. Chapter 11: Agriculture and rural development 75 5.12. Chapter 12: Food safety, veterinary and phytosanitary policy 77 5.13. Chapter 13: Fisheries 78 5.14. Chapter 14: Transport 79 5.15. Chapter 15: Energy 81 5.16. Chapter 16: Taxation 84 5.17. Chapter 17: Economic and monetary policy 85 5.18. Chapter 18: Statistics 86 5.19. Chapter 19: Social policy and employment 88 1 5.20. Chapter 20: Enterprise and industrial policy 93 5.21. Chapter 21: Trans-European networks 96 5.22. Chapter 22: Regional policy and coordination of structural instruments 98 5.25. Chapter 25: Science and research 99 5.26. Chapter 26: Education and culture 100 5.27. Chapter 27: Environment and climate change 104 5.28. Chapter 28: Consumer and health protection 107 5.29. Chapter 29: Customs union 109 5.30. Chapter 30: External relations 110 5.31. Chapter 31: Foreign, security and defence policy 112 5.32. Chapter 32: Financial control 114 5.33. Chapter 33: Financial and budgetary provisions 116 ANNEX I – RELATIONS BETWEEN THE EU AND ALBANIA 118 2 1. Introduction 1.1. Context Albania has continued to implement the Stabilisation and Association Agreement and the meetings of the joint bodies under the agreement took place. In April 2018, the Commission issued its first recommendation inviting the Council to decide that accession negotiations be opened with Albania. In its June 2018 Conclusions, the Council acknowledged the progress achieved by Albania and set out the path towards opening accession negotiations in June 2019. In line with the Council Conclusions, the Commission started the preparatory work, including through the technical explanation of chapters of the EU acquis. In light of the significant progress achieved and the conditions set unanimously by the Council in June 2018 being met, the Commission recommended again in May 2019 to open accession negotiations with the country. In June 2019, the Council postponed the decision to October 2019. The European Council then decided to ‘revert to the issue of enlargement before the EU-Western Balkans summit in Zagreb in May 2020’. The Commission has continued to monitor thoroughly developments in Albania. The country has continued to implement reforms related to the EU agenda. On 26 November 2019, Albania was hit by a devastating earthquake of a magnitude of 6.3 Richter. Despite the challenge of dealing with the emergency situation, the Albanian authorities have maintained a constant, strong public political commitment to the country’s strategic goal of European integration. Overall, Albania has increased its efforts and delivered further tangible and sustainable results in the key areas identified in the Council Conclusions of June 2018. Consequently, in its update on Albania published in March 20201, the Commission confirmed that the bases of its 2019 recommendation to open accession negotiations with Albania remain valid. On this basis, on 25 March 2020, the Council decided – and European leaders endorsed this decision on 26 March 2020 – to open accession negotiations with Albania and tasked the Commission to report on a number of issues to be addressed by Albania prior to the first Inter- governmental Conference, including progress regarding the track record2. The present Report also serves the purpose of reporting on the Council Conclusions on the conditions identified with regards to the first Inter-governmental Conference (IGC) as well as other important priorities and the issues to be reflected in the Negotiating Framework. The COVID-19 pandemic is a global shock that has not spared the Western Balkans. It represents an unprecedented burden on their health and social protection systems. The final extent of its footprint in terms of loss of human lives and damage to the economies is still difficult to assess, but early Commission estimates foresee a drop of between 4 and 6% of Gross Domestic Product (GDP) in the region. Thousands of citizens are at risk of losing their jobs, and temporary government support measures (unemployment benefits, deferrals/waivers to tax and social security contributions, etc.) have an important fiscal impact. While the EU is itself heavily affected by the pandemic, it has spared no time and effort to provide essential and unparalleled support to the Western Balkans. This includes financial support of more than EUR 3.3 billion for countries in the region to address the immediate health crisis and resulting humanitarian needs, as well as longer term and structural impact on their societies and economies. Given the European perspective of the Western Balkans, the EU is also treating the region as privileged partners by associating them with the Union’s mechanisms and instruments. These include the Health Security Committee, Joint Procurement Agreements, Union Civil Protection Mechanism, Solidarity Fund, consular assistance in repatriation or exemption from temporary EU export restrictions of medical equipment. These and other measures have provided immediate relief and are a clear message of the EU’s political commitment towards the region. 1 https://ec.europa.eu/neighbourhood-enlargement/sites/near/files/update-on-the-republic-of-albania.pdf 2 https://www.consilium.europa.eu/media/43076/26-vc-euco-statement-en.pdf 3 As of March 2020, the government reacted swiftly to the COVID-19 pandemic and took stringent measures thus managing the crisis with limited human and financial loss. It issued a series of decrees subsequently endorsed by the Parliament. The State of Emergency for Natural Disaster, put in place after the November 2019 earthquake, was extended until June 2020. The authorities notified a derogation from the obligations under certain articles of the Convention for the Protection of Human and Fundamental Freedoms. The European Commission recommended that emergency measures taken in the context of the COVID-19 pandemic are proportionate, restricted to what is necessary and limited in time so that rule of law and democratic and human rights standards are respected. As of 18 May 2020 the government lifted lockdown measures. All public and economic activities are open, except public transport, sports activities, schools and mass gathering activities. As of 1 June 2020 all movements in all territory are free without time limitations. All borders with the neighbouring countries are open. No quarantine is required for persons entering in the country. Quarantine is implemented only for specific cases recommended by the health authorities in the country or protocols issued/approved by the EU Infections Control. 1.2. Summary of the report As regards the political criteria, the political environment in Albania continued to be marked by intense polarisation. Parliamentary activities were affected by the opposition relinquishing their mandates. Institutional continuity was still ensured through gradual filling of vacant parliamentary seats. At the end of the reporting period, the Assembly had 122 out of 140 members. The opposition decided to boycott the 30 June 2019 local elections. These were held, while the President had issued a decision to postpone the vote to October. The Parliament initiated an impeachment procedure on the President that was finalised in late July 2020. The ad hoc inquiry committee of the Parliament concluded that while the President had overstepped his Constitutional competences, the violations did not justify his impeachment. The country's political stalemate saw an opening in January 2020, when the ruling majority and the parliamentary and extra-parliamentary opposition reached an agreement to take forward the electoral reform, by establishing a Political Council, platform to complete technical and political talks and to implement the outstanding recommendations of the Office for Democratic Institutions and Human Rights at the Organisation for Security and Cooperation in Europe (OSCE/ODIHR), ensuring transparent financing of political parties and electoral campaigns. On 5 June 2020, the Political Council reached a breakthrough agreement to gradually introduce a depoliticised electoral administration, in line with OSCE/ODIHR recommendations. The parties also agreed to introduce electronic identification of all the voters (where technically viable), to restructure the Central Election Commission, and for the Electoral College to be comprised of vetted judges. The amendments to the electoral code were adopted by the Parliament on 23 July 2020, in accordance with the 5 June 2020 agreement thus meeting the condition for first IGC.