As a result, this was reflected in stagnating investments and slowing down dynamics of the Albanian economy, both in the private and public sectors. Moreover, current business practices and policy orientations are imposing significant constrains in the efficiency of monetary policy transmission mechanism, and the ability of authorities to provide much needed stimulus to the economy. It is understandable that banks would have to be careful, prudent and responsible given the current situation with non-performing loans; however, they must also consider the fact that credit and financial intermediation is important for growth, which, in turn, can improve the ability of economic agents to repay their loans. This is especially true for particular sectors like agriculture and agro-business, which, so far, have not benefited from credit expansion, but have large untapped potential for growth. The era of an economic growth model, led mainly by the domestic consumption, is now gone. Banks, their European headquarters and their supervisory authorities should work together with authorities of host countries to develop a new long-term and sustainable economic growth model. This new model needs to be based on investments in productive sectors of the economy. Our products and services need to be competitive not only in the home market, but they should also offer comparative advantages in the regional and European Union markets. It is clear that cooperation is the only choice for the future.
Most importantly, European economies and their financial systems, among which the Austrian financial system enjoys a significant share of the market, define the globalization for the region and are, to a large extent, important determinants for the success or failure of these economies. Given the large share of the European financial groups, they have and will play an important role in the transmission of global shocks in the region. What is more important, they have a significant role in the transmission of legislative and regulative shocks carried over by European monetary and supervisory authorities. The size is such that even a simple change in the future business plans of a single European financial institution can transform into real shocks for the economies of the region. It became evident during the crisis and afterwards that an increase in risk and uncertainty, led to increased incentives for banks to withdraw from the Emerging Europe economies. Though this was mostly prevented due to increased cooperation through institutions such as the Vienna Initiative, the concerns from our perspective have not completely dissipated. In this respect the business plan of EU based groups can play a potentially important role in the nature and outcomes of this cooperation.