Monday, November 7, 2016


Italy and Albania: a political and economic alliance, and the unification Italy-Albania in 1939

At the beginning of the twentieth century Albania existed as an agrarian society run by local chieftains, except for periodic short-lived central governments, until King Zogu, with the help of Yugoslavia, secured absolute power in December, 1924. With wide support from the people of Albania, Zogu was able to forge a strong economic alliance with Italy which strengthened the emerging centralized government and gave Albanians a sense of nationhood.

For fourteen years the "Italian-Albanian alliance" developed and functioned to the benefit of both countries, ending only with the Italian invasion of Albania in April, 1939. In that year the kingdom of Italy started to "assimilate" Albania: On April 12,1939 the Albanian parliament voted to depose Zog and unite the nation with Italy "in personal union" by offering the Albanian crown to Italy's King Victor Emmanuel III (who appointed Francesco Jacomoni di San Savino, a former ambassador to Albania, to represent him in Albania as "Lieutenant-General of the King" or Viceroy).

It was the first step toward the creation of a political italian entity similar to the one of the United Kingdom (where the king is the union-center between England, Scotland and Wales): Italian King Victor Emmanuel III was crowned "King of the Albanians" in addition to his title of Emperor of Ethiopia, which had been occupied three years before; and successively was considered the possibility to do the same with Montenegro in 1941 (but it was not done, because the 1943 Italian defeat in WW2 did not allowed a "united kingdom of Italy" with Italy, Albania and Montenegro united under the crown of Victor Emmanuel III)

However it is noteworthy to pinpoint that in the "Treaty of London" during World War I, the Triple Entente had promised Italy central and southern Albania as a possession as a reward for fighting alongside the Entente. In June 1917, after Italian soldiers seized control of substantial areas of Albania, Italy formally declared a protectorate over central and southern Albania; however this was overturned in September 1920 when Italy was pressured by US president Wilson to remove its army from Albania. Italy was enraged with the minimal gains that she received from peace negotiations, which she regarded as having violated the Treaty of London. Italian Fascists claimed in the 1920s that Albanians were ethnically linked to Italians through links with the prehistoric Italiotes, Illyrian and Roman populations, and that the major influence exerted by the Roman and Venetian empires over Albania justified Italy's right to possess it.

Italy and Albania in 1940 Europe

Establishment of the Italo-Albanian Alliance

King Zogu, the architect of the "Italian-Albanian alliance" in the 1920s, established a foreign policy that was an important element in his political program, as well as his economic program. In January, 1925, Zogu sent a letter to Mussolini pledging alliance and Mussolini responded immediately by expressing his recognition of the Republic of Albania and its Government. At the same time, Zogu’s administration was overwhelmed by different European companies offering to invest in all branches of the Albanian economy. These offers consisted of things such as the construction of railways, docks, mines and drainage schemes, as well as oil industry and banking development. Unfortunately, Albania, still without paper currency and using gold coins, was facing difficulties in building a modern money economy, and Zogu understood his country needed a national bank. The easiest way to achieve this was to establish an economic relationship with a strong country. Surrounded by pro-Italian cabinet members and convinced that Britain was standing behind Italy in order to offset the support France was giving to Yugoslavia, King Zogu openly announced his intentions to cooperate fully with Italy and turned his back on the Yugoslav government who had brought him to power.

Thus began a fourteen year period (1925-1939) of Italian companies pouring wealth and resources into Albania to reconstruct this poor agrarian country. In the spring of 1925 two important concessions were signed with Italy; the first was the right to found a national bank and the second was the approval of the establishment of an Italian company (SVEA), to develop the Albanian economy. The National Bank of Albania (Banca Nazionale D’Albania) was in truth an Italian bank operating under Italian law and its reserves were in Rome. This institution offered financial services to the young government that some other financial institutions did not; however, through the agreement, the Italians had the right to keep the majority of shares (51% against 49% to the Albanians). This made it possible for an unexpected development whereby the Italian banks secured the majority of title and deeds through fraud and corruption. When discovered, this caused a scandal and resulted in the resignation of the Albanian finance minister, who, it was revealed, had been awarded one million gold francs for committing this fraudulent activity on behalf of the Italian government. Unfortunately, it did not end there, the bank funds had been administered by the Società per lo Sviluppo Economico dell’Albania (SVEA), a development company to improve the Albanian economy, which was, in fact, a section of the Italian Finance Ministry. While the funds administered by this institution were indeed spent on infrastructure and public works, for example development of oil resources, it just so happened that the contracts would be awarded to those firms preferred by the Italian government. Undoubtedly, Albania would never have become developed economically without the presence of foreign aid and loans. Above all the Italians were better than the Yugoslavs in being the ambassadors of westernizing Albania. Interestingly, in December, 1924, when Zogu was first raised to power, he was but a Serbian puppet. However, by June, 1925, with the Italo-Albanian alliance, Albania had become an Italian province without a prefect. At every opportunity Zogu referred to Mussolini as a great leader and said that he was inspired by Mussolini from early on, though he seemed not to want to become dependent on a sole foreign partner and invited investment from other countries as well. However, the Italian government demanded that Albania recognize the declaration of Paris which established Albania as an Italian protectorate with Italy expected to provide both abundant money and arms.

The Pact of Tirana – 1926

The multidimensional relations between Italy and Albania reached yet a new level with the signing of the Tirana Pact on November 27, 1926, which brought 200,000 francs in aid that was followed quickly with other means of assistance. The treaty would last five years and included these two important points: Article 1: Italy and Albania will recognize that any disturbance threatening the political, legal and territorial status quo of Albania is contrary to their common political interests. Article 2: In order to safeguard the above mentioned interests the two countries will undertake to afford each other mutual support and cordial cooperation: they also will undertake not to make any political or military agreements with other powers prejudicial to the interests of either Italy or Albania. With the signing of this agreement Mussolini promised that he would make a gift to Ahmed Zogu of several million lire, and Italy would provide significant assistance to develop the Albanian military and economy. Zogu’s government now became dependent in every way on the Italian plans towards Albania. At the same time, it was a fruitful strategy to balance the strengths of the adversaries in the Balkan conflicts. However, with Albania so firmly planted on the side of Italy, Yugoslavia tried to assuage her feelings of insecurity by causing trouble at Albania’s northern borders for the next two years. In 1928, with the Yugoslav troops threatening at the northeastern border, Ahmed Zogu declared in front of the House of Commons his intentions to become the king of Albania. Italy immediately began to throw monetary support his way. To bolster the Albanian economy and transportation infrastructure, Italy signed another agreement with Albania in June 26, 1931. In it, Italy offered to subsidize the Albanian budget by extending a loan of one hundred million gold francs (L 6,600,000). These new measures were taken to make the Albanian economy more stable by balancing the country’s budget and facilitating public works. By this time, Italy had established a committee with four members which had a similar role to that of SVEA during the late 1920’s. This commission monitored the financial affairs of all ministries, and ironically, Italian members of the committee had a veto power on outlay in order to ensure that Italy had enough financial control to check corruption. However, this agreement did assure a positive relationship between the two countries for years to come. Through the years, Albania accepted a greater number of Italian advisers, some to exercise even more authority than before, and in the same vein, agreed to install a number of Italian technical experts, whose advise was not solely restricted to financial and economic matters; they also consulted on public works and oil concessions around the country. At every turn, the Italians continued to agree to extend their manpower contributions and financial assistance in all areas of Albanian economy. Italy’s generous support was so impressive that they even forgave a loan of 100 million gold francs, of which only 20 million had been paid back by the Albanian government, when this agreement was signed in June, 1931. Paradoxically, a new loan of nine million gold francs was made, plus another three million that Mussolini offered spontaneously in 1935. Furthermore, the Italian government granted another loan of about ten million gold francs which was for the development of agriculture, to be payable in five years; this loan had only a 1% interest, made possible by a guarantee from the Italian oil concession in Albania which was already reaping huge profits. Topping this, Italy granted another loan of three million gold francs, this time interest free, to be used for the establishment of the tobacco monopoly in the country; this amount had to be liquidated in a period of fifteen years with a minimum of 200,000 Lire paid each year. Lastly, Italy offered a loan of 40 million gold francs in annual installments of eight million gold francs, with the money to be spent on the construction of public works which would be monitored by the Italian specialists. Thus, with one loan after another, the Italians had their fingers fully into every segment of the Albanian economy.

A particularly important project to the Albanian economy was the construction and modernization of the port of Durres (the historically Italian "Durazzo") as a result of an agreement made in Rome between the two governments. The structure of the harbor and the infrastructure was improved considerably after the Italians took entire control of the construction of the main section of it. In addition, another agreement was signed in 1936 allowing Italy’s interference in, or regulation of, Albanian Finance, customs, revenues, exports and imports through this and other ports, which channeled even more profits back to Italy. One of the most lucrative industries in the country was oil: it was managed after WWI by British Petroleum until the Italians began to move into this sector in 1920.

Eventually, 300,000 Italian émigrés came to settle in Albania (including the temporary workers). Italian schools opened everywhere and the major cities of Albania were given Italian names. The outcome of the Italian interference was really a de facto colonization of Albania which had its positive impact in regards to development of the import/export trade in the interwar period. Mussolini once declared, “Italy’s policy in Albania is quite clear and absolutely straight forward. Its sole object is to preserve and to respect the independent status of this small country, which for centuries has lived in friendship with us” it would take another three years to reveal the true intentions of Italy towards Albania. Unfortunately, the small country of Albania could not have been stabilized and would have sunk into anarchy had Italy not stepped up to take the helm of this newly formed nation.

Italian contributions to every aspect of Albanian economy and culture completely transformed Albania in a matter of two decades. Thanks to the Italian assistance the total exports in 1938 amounted to 10.2 million gold francs and the principal items were crude oil, cheese, eggs and livestock. Imports exceeded 18.9 million gold francs, and consisted of textiles, cereals, petroleum, machinery and sugar. Finally, in 1938 the Italian government implemented a generous renegotiation of the SVEA debt of 28 million francs of penal interest were written off. Italians shared their experience and expertise to bring “western” values to Albanian society. Italy introduced its own education system in accordance with the ideas of Mussolini and how the youth should be educated. There was even a delegation sent in 1937 to advise King Zogu on organizing youth committees similar to the fascist groups in Italy. By the mid 1930’s, Albania’s bargaining position was nil and Italy had almost subsumed the Albanian economy and culture. Yet, Italy, under the glare of disapproving international eyes, was still threatened by the possibility of Yugoslav patronage.

Jacomoni (Albania Viceroy-"Luogotenente del Re Vittorio Emanuele III") talking -dressed in clear uniform- to Verlaci (Albania Prime Minister) in 1941 Radio Tirana offices inauguration

Italian strategic interests

Any contributions Italy makes to the Albanian economy are and have always been based on the interest in the geographic positions of the two countries. Indeed, from Italy’s heel to Albanian gulf of Vlora, it is only 50 miles. As far back as the crumbling of the Ottoman Empire, Italy had begun to pursue an aggressive role towards controlling Albania. At that time, the Albanian territory was a war-torn nation, incapable of defending herself and on the verge of being partitioned by neighboring countries. Besides Italy, Serbia, Greece and Bulgaria all had self aggrandizing plans involving the Albanian Territory. It should be emphasized that Italy has always pursued a policy of colonization and annexation of the Albanian nation. So it seemed “business as usual” to step in and take a “fatherly” role in 1925. The desires of the principle Albanian elected officials, who wanted to rely on a foreign power from which they could take loans and bring the Albanian economy to its feet, matched perfectly with Il Duce’s plans. Since coming to power Mussolini had pursued a strategy based on invading weak countries and profiting from their resources. Albania was an especially prized plum. First, its strategic geographic position provided a perfect bridge to expand Italian Influence in the Balkan Peninsula. Secondly, The Italian Dictator wanted to control the Adriatic Completely and having Albania under his protectorate would give him the right to control the Straights of Otranto and thereby secure the entire eastern coast of Italy from imminent attack. Thirdly, control of these straights also afforded Italy control of the Yugoslav navy and international trade in and out of the Adriatic. When Italian troops invaded Greece on October 28th, 1940, it became abundantly clear that this strategy had worked. Fourthly, North Africa was on the top of the list after Albania to be controlled and without a full control of the western Balkans it would have made impossible to achieve this objectives in North Africa. At first, Mussolini was willing to collaborate, as he had done in the past, with the Yugoslav government and offered them a piece of the Albanian pie. Il Duce always had the idea of triumphant foreign policy that would challenge the world and he dropped negotiations with Yugoslavia. Italian Policy towards Albania was never based on altruistic principles. It was not really about making a contribution to the economy, but was rather more about securing the Italian interests across the Adriatic and waiting for the perfect moment to declare full authority over Albania and its neighbors. The Assistance Italy offered consisted of giving with one hand and taking double the amount with the other. The relations with the Italian government, as Zogu sorely discovered, were not at the level of genuine friendship. By 1939, the Italian ally was distrusted more than the enemy by him.

The Italian Invasion Begins (April 7th, 1939)

In a matter of months Mussolini would decide to invade Albania, resulting in a complete destruction of the entire infrastructure Italy had so carefully built. By the end of 1938, with the alliance between the two countries starting to crack and with a new government being elected in Yugoslavia, Mussolini was inspired to achieve, with considerably less effort, his intentions against Albania. For Mussolini, the Balkans, offered tremendous mineral wealth and strategic geographical position, but more importantly, he wanted to keep pace with his German buddy who had already annexed the Sudeten lands and Czechoslovakia. To justify the invasion, if only to themselves and Germany, Italy prepared a report analyzing the importance of the Albanian Territory, and plans for its reclamation. It would take less than a year for Albania to be completely overwhelmed and gutted by its former ally, Italy. Mussolini continued in his intentions to invade all of the countries bordering Albania, and never wanting to be considered a second string ally of the axis.

In Rome, indignation stemming from the jealousy of the German expansion in Europe preoccupied Mussolini who wanted to maintain an equal position in the “Pact of Steel.” The Italians continuously refused to revise their demands addressed to King Zogu and Zogu would not budge. Twice, King Zogu did not accept four requests made by the Italian foreign minister, Count Ciano. The first was the complete control of the infrastructure including ports, airfields and roads to be used in a situation when the Albanian sovereignty was in danger. Zogu insisted that such an extension of the Italo-Albanian alliance was not acceptable, and that Italian troops should enter the country only with the explicit request of the Albanians themselves. The second request was to have a secretary general in every ministry of the administration. Zogu wanted Italian staff members to be present only on an ad – hoc basis. The third was the request to give full civic and political rights to Italians in Albania. Zogu repeatedly opposed the idea of having foreign citizens to be part of the Albanian parliament, but he supported the idea of civil rights. The fourth and final request was to promote the Italian legation to an embassy, which was only a change in protocol. It should be pointed out that the King’s family was celebrating the birth of the prince named Leka, on April 5. Having to deal with these political difficulties at this time, Zogu felt betrayed and could not stop his tears of disappointment. Meanwhile, a large number of people surrounded the king’s palace and requested weapons to fight the Italians. Zogu sent a telegram to Mussolini requesting to reopen the negotiations and wanted his old friend, General Pariani to be sent to Albania to direct the negotiations. Instead, Mussolini retorted with a fierce message saying that Zogu should send a representative to meet with General Guzzoni at the shores of Durres (the site of the invasion). Realizing the irony of this offer, on the eve of April 7th, two hours before the invasion, the royal family, under Zogu’s supervision, left Albania and immigrated to Greece. This was severely difficult for the queen who had delivered Prince Leka only two days before.

On the same morning, Count Ciano directed a flight operation over Albania spreading leaflets calling upon the people to demonstrate friendship to the Italian forces. In the port of Durres the first invasion faced some resistance, but in the other ports the Italians disembarked quietly and without a problem. At two a clock the same day, King Zogu addressed the nation and called upon all the people to unite the fight for the freedom of their beloved nation. But no one organized this effort and there were only pockets of resistance here and there. For Italians, this was essential. The capture of Tirana, the capital, was of primary importance to Mussolini and he was continuously asking how long it would take to reach it. In the first stages of the invasion, confusion partially ruled the Italian forces. They had a lack of radio communication and the troops could not report their positions before advancing. Furthermore, the specialist units were not prepared for the tasks they undertook in the invaded territory, and there were motor-cyclists, truck drivers and even generals who could not do their jobs. Often the roads were blocked by broken vehicles and the generals threw up their hands. But still they bore on to overthrow the Albanians. When they finally arrived at the capital, the streets were surprisingly empty, with no resistors in sight. Indeed some Albanians were greeting the Italians when they entered Tirana.

Map of Italian Albania (blue line, that included most of "Chameria" still administered from Athens)

Italian colonists and assimilation

On 9 April 1939 Albanian King Zog fled to Greece and Albania ceased to exist as an independent country. The Balkan country became a component of the Italian Empire and was turned into an Italian protectorate, similar to the German Protectorate of Bohemia and Moravia, in that the land was an autonomous territory of Italy which was designed for eventual colonization and Italianization. The throne was claimed by King Victor Emmanuel III of Italy, who was the official ruler of Albania until his abdication on 25 July 1943. The government was led by Italian governors and an Albanian civil government. From April 1939, Albanian foreign affairs, customs, as well as natural resources came under direct control of Italy. All petroleum resources in Albania went through AGIP, Italy's state petroleum company . The puppet Albanian Fascist Party became the ruling party of the country and the local Fascists, like prime minister Shefqet Verlaci, allowed Italian citizens to settle in Albania and to own land so that they could gradually transform it into Italian soil. Verlaci (who had distant Italian roots) approved the possible administrative union of Albania and Italy, because he wanted Italian support for the union of Kosovo with Chameria and other "Albanian irredentism" areas, creating a Greater Albania. Indeed, this unification was realized after the Axis defeat of Yugoslavia and Greece in spring 1941. Italian citizens began to settle in Albania as colonists and to own land so that they could gradually transform it into Italian soil. The Italian colonists and the Italian "assimilation" (done with irredentism ideals) were more or less welcomed in spring 1939, and were greeted by most Albanians when Albania was enlarged two years later. But in November 1941 they started to face a few contrary manifestations and the resistance of some Albanians, organized mainly by the Communist Party of Enver Hoxha: only in summer 1942 started a weak guerrilla war, because Italian general Mercalli in March 1942 declared that "Albania was the only Balkan state totally peaceful inside its borders enlarged" (read Operazioni di controguerriglia in Albania italiana"

The first Italians to colonise Albania were fishing families from Apulia, who moved to the island of Saseno (Sazan) opposite Valona in 1918. The island was officially part of Italy from the end of World War I to 1947. In 1926, the Italian government, in agreement with Albanian authorities, sent 300 Italian colonists to Kamez, near Tirana, to promote agricultural development. Most of the Italians were farmers from Arberesh communities in southern Italy. They were initially successful, and created the company "Ente industria agraria Albanese" with an agricultural school, but the regime of King Zog expelled them in 1931, fearing excessive Italian influence in Albanian society and politics. After the occupation of Albania in April 1939, Mussolini sent nearly 11,000 Italian colonists to Albania (and started to "create" Italian irredentism claims on Albania). Most of them were from the Veneto region and Sicily. They settled primarily in the areas of Durazzo, Valona, Scutari, Porto Palermo, Elbasani and Santi Quaranta. They were the first settlers of a huge group of Italians to be moved to Albania to create Mussolini's Greater Italia. In addition to these colonists, 22,000 Italian casual laborers went to Albania in April 1940 to construct roads, railways and infrastructure. Most of the 1939 colonists were men enrolled in the so-called Albanian Militia. This organization was an Albanian fascist paramilitary group, part of the Blackshirts. Later even Albanians were recruited in the group. It was headquartered in Tirana and consisted of four legions in Tirana, Korçë, Vlorë and Shkodër. The Albanian Militia was disbanded in 1943 following the fall of Italy in World War II.

The Italians adopted the existing Albanian system of prefectures (Italian:"Prefetture"). In line with the administrative structure of the rest of Italy these were also called provinces (Italian:"Provincia"). However, unlike Italy the Albanian sub-prefecture (Italian:"Sotto Prefetture") was retained. There were initially 10 "Provincie": Berati, Peshtopi, Durazzo, Elbasan, Argirocastro, Coritza, Kukesi, Scutari, Valona and Tirana. Under this was 30 sub-prefectures and 23 municipalities (Italian:"Municipalità"). Each Prefecture was run by a Prefect located in the city of the same name. In 1941, following the dismemberment of Yugoslavia, three new Prefectures were added: Kossovo, Metohija and Debar, with 5 sub-prefectures.

Following the Italian capitulation, numerous Italians (perhaps 20,000) remained in Albania. There were nearly 1,000 women among the Italian colonists and some of them remained in Albania after World War II, mainly through marriage with Albanians.

Upon the occupation of Albania and installation of a new government, the economies of Albania and Italy were connected through a customs union that resulted in the removal of most trade restrictions. Through a tariff union, the Italian tariff system was put in place in Albania. Due to the expected economic losses in Albania from the alteration in tariff policy, the Italian government provided Albania 15 million Albanian "leks" each year in compensation. Italian customs laws were to apply in Albania and only Italy alone could conclude treaties with third parties. Italian capital was allowed to dominate the Albanian economy. As a result, Italian companies were allowed to hold monopolies in the exploitation of Albanian natural resources. In 1943, the number of companies and industrial enterprises reached 430, from just 244 in 1938 and only 71 such in 1922. The degree of concentration of workers in industrial production in 1938 doubled compared with 1928 and increased further under Italian control in 1941.

Following the Italian capitulation, the occupation ceased but numerous Italians (perhaps 20,000) remained within the country. These were rounded up by the Germans and taken to Germany (many officers being shot) or else they evaded capture and adopted some disguise, for example, as agricultural laborers. A small number even joined Albanian partisan groups. Only a few collaborated with German authorities, because were fascists and adhered to the RSI of Mussolini in 1944.


There are several reasons why King Zogu was not willing to use force to confront the Italian troops. First, Zogu, did not have the support of the neighboring countries, Yugoslavia and Greece. Both of these countries did not want to supply armament to the Albanians, as they had been scared off by the Italian military capabilities. Secondly, the Yugoslav army declared that they would not enter the Albanian territory unless there was conflict in a Fifteen mile radius of the northeastern border. However, Yugoslavia was restrained from entering into Albanian territory by a previous agreement with Italy. Thirdly the Albanians showed little interest in fighting under the leadership of King Zogu. In fact, many Albanians spent their first week under Italian occupation debating whether Zogu was worth keeping as king. Zogu’s regime had failed to keep control of the local leaders because Italy had found a way to eliminate Zogu as a middleman and finance these “chieftains” directly. Whatever resistance there was to be, it would be waged by communist groups that fought tirelessly throughout the war. Mussolini was able to find a pretext in order to make his strategic invasion legitimate and as necessary as possible even from the Albanian point of view. The Italians pretended that in order to preserve peace in the Balkans it was important to overthrow the Zogu regime. It was interesting to see an Italian puppet become their number one enemy 14 years later. Zogu explained, “I knew what Italians were after and I prevented them from getting control of the country by peaceful means…international politics left us no other choice to come to an understating with Italy. But the megalomania of the fascist regime made us certain that one day we should have to fight to defend ourselves.” Interestingly, count Ciano and his clique never really had to depose Zogu as his Albanian support had already dried up. And as for “preserving peace in the Balkans,” the Italians had merely blown apart a very fragile time of Balkan quietude. As a French Journalist once said, “Pays Balkanique, Pays Vulcanique,” peace in the Balkans is like a “peaceful” volcano.

However the unification -even if nominal and done only with the king Victor Emmanuel III- was effective and accepted by the population of Italy and Albania without any real disagreement from the first day of the Italian military occupation of Albania in 1939 until September 1943. Some Albanians still remember those years as a period when they were part of western Europe and out of Balkan problems.