Press Release: Fiscal consolidation one of the leading challenges

Fiscal consolidation is one of the leading challenges of both Montenegrin and the region’s economies, and it should, in the first place result in the public consumption decline, said the Finance Minister Milorad Katnić PhD., at the Regional Forum “Post – Crisis Growth Strategies” held today in Ljubljana.

He said that the need for the public consumption decline is one of the main lessons learned from the economic and financial crisis. “This is on our Agenda and we know without any doubts what needs to be done, yet undecided are the mechanisms to be used for the implementation of the structural reforms“, said Katnić, adding that Montenegro, in light of the aforementioned objective, has recently implemented a pension reform, as well as that it is currently in the stage of implementing labor legislations reform.

In his opinion, high expectations are the limiting factor in Montenegro. “We had high expectations in Montenegro, being generated in the period of a strong pre-crisis economic boom, thus in the current situation, it is much more difficult to explain the need for the fiscal consolidation“, concluded the Finance Minister Katnić.

At the Forum, which gathered the representatives of finance ministries and central banks from Montenegro, Albania, Kosovo, Macedonia, Slovenia and Turkey as well as international financial institutions (EBRD, World Bank, IMF, EIB), was estimated that a series of external shocks slowed down the recovery of the economies of the region in last couple of months, and a further challenge is how will the EU cope with the Greek crisis. Fiscal adjustment and the deficit reduction were identified as two major post-crisis challenges, and praised were the efforts of the countries that implemented reforms, especially pension system reforms.

The representatives of the international financial institutions have stressed the importance of building institutions that will be able to carry out delegated tasks, adding that the Slovenian Centre of Excellence in Finance (CEF) may have a particularly important role in this process, which today celebrated ten years of its establishment.

PR OFFICE
MINISTRY OF FINANCE