Wage policy agreement lays groundwork for social stability and economic progress

Podgorica, Montenegro (22 December 2011) – The Signing of the Agreement on Wage Policy for Public Sector is the victory of social dialogue in Montenegro and an achievement Montenegro is to be recognised for, Prime Minister Igor Lukšić told the press following the signing ceremony on Wednesday, 21 December.

The agreement, in his words, is crucial as it sets the ground for social stability, understanding between the Government and the trade unions and the overall economic progress and improvement of the living standard of Montenegrin citizens.

Finance Minister Milorad Katnic said the agreement provides for the broad partnership regarding not only 2012 to 2015 wage policy, but also a series of issues related to the budget, planning and allocation of public revenues and optimisation of employees in certain public bodies.

He underlined that the Agreement associates wage growth to GDP growth and the financial strength of the Budget.

If real GDP growth exceeds 3.5 per cent, the signatory parties to the agreement are obliged to negotiate a salary rise for public sector. Also, if the inflation exceeds 2 per cent, a salary rise will be also negotiated.

However, if GDP drops by more than 2 per cent, the Government and the trade unions will negotiate a cut in public sector salaries, the Finance Minister explained.

Zoran Masoničić of the Trade Union Alliance remarked that the signing of the Agreement speaks volume of Montenegro’s readiness to make progress towards Europe.

Srdjan Kekovic of Free Trade Unions Federation described it as a historic moment, safe in the knowledge that “it has done a good job for the union's members”.

The Government and trade unions' representatives also agreed on Wednesday to extend the validity of the General Collective Agreement until 30 June 2012.