First 100 Days of New Montenegro Government: Spending cuts, attracting investment, EU and NATO integration

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• Estimated real growth in 2013 at 2.5%

• Timely servicing of Government commitments, all non-mandatory expenses significantly reduced

• Strong fight against grey economy, boost to business, agriculture, investment

• EU and NATO integration efforts going as planned

 

Podgorica, Montenegro (18 March 2013) – Prime Minister Milo Đukanović held a press conference marking the first 100 days of his government, where he presented the activities in delivering on the promises made in his inaugural speech concerning the consolidation of public finance, business environment, infrastructure projects and further efforts towards EU and NATO accession.

Referring to the fiscal policy plan, PM Đukanović reiterated that the estimated real economy growth in 2013 is 2.5%, with budget revenues forecast at EUR 1.161.8 million, or 33.26% of the GDP, and the budget deficit at the level of 2.73% of GDP in 2013.

In the first three months, the Government ensured stable and timely servicing of its obligations, whereas all categories of non-mandatory expenses have been significantly reduced.

Pursuing additional measures of fiscal adjustment, PM Đukanović explained, the Government introduced additional 6% tax on gross salaries above EUR 720.

The Government will radically cut the number of its vehicles and the flight expenses, expecting to save EUR 1 million, PM Đukanović underlined. The salaries of board members and CEOs in public sector institutions will be significantly reduced as well.

All these measures, according to PM Đukanović, are expected to save up to EUR 30 million, cut budget deficit to the level of EUR 65 million and reduce the need of funding the budget from loans.

In the first two months of 2013, the budget revenues increased to EUR 129.4 million, almost EUR 13 million (11,1%) more compared to the same period in 2012. The VAT revenue, PM Đukanović continued, amounted to almost EUR 50 million, which is EUR 7 million more than the same period in 2012 and 11.3% more compared to what was planned.

As to advancing the business environment, Prime Minister Đukanović noted that the Government plans to publish the “black” and “white” lists of companies, the lists of the biggest tax debtors and regular taxpayers. The government also introduced the electronic portal for licenses, which simplifies business registration procedures by reducing time and costs, and provides essential business license information, PM Đukanović noted.

The Government has received numerous offers for the construction of thermal power plants and it also projects the construction of 35 small hydro-power plants, with the total strength of 98MW, as well as the construction of wind and solar power plants in Montenegro.

The Government is considering the construction of the Bar-Boljare motorway with potential partners – China’s CCCC, the Bechtel-ENKA American-Turkish consortium, and the European Investment Bank.

Presenting projects in tourism, the Prime Minister underlined in particular the projects in the Bay of Kotor area: the EUR 55 million Regent Hotel currently being built at the Porto Montenegro marina and the second phase of the marina worth EUR 22 million, the acquisition of a former military base Kumbor by Azerbaijan’s SOCAR, who plan to build a resort there, the start of main construction work on the Luštica Bay project in Tivat, and the Qatary Diar Hotel Property Investment.

Prime Minister Đukanović also noted the activities at the Sveti Stefan resort, including the finishing works at islet villas and the construction of a Spa centre in adjacent Miločer.

The Prime Minister suggested a sustainable solution for the KAP aluminium smelter in Podgorica, which would meet the Parliament’s requests of taking the ownership back from CEAC, resolving outstanding debts, and providing a lasting solution to the energy supply issue.

Agriculture industry received a boost through a number of grants to producers, and various support programmes helped create 127 new jobs. Prime Minister Đukanović noted the import of food products was lowered, as well as the grey economy impact, thus meeting the goals set by the Government. He welcomed the activities aimed at launching new production lines, noting particularly the privatisation of the “Zora” dairy factory in Berane.

Prime Minister Đukanović underlined that only six months after the start of EU accession negotiations, the chapter on Science and Research was temporarily closed. He also noted that 22 working groups have been established thus far, and 20 screenings for 21 chapters have been conducted.

He stressed that the rule of law, judicial reform, and efficient fight against corruption and organised crime remain the Government priorities in the area of EU integration, reminding that the Government is vigorously working on drafting the action plans for Chapters 23 and 24, whose completion is scheduled for late April. The Prime Minister added that Montenegro will most likely be asked this summer to prepare negotiating positions for these chapters.

As regards NATO integration, Prime Minister Đukanović underlined that Montenegro works actively to meet NATO integration requirements. Mr Đukanović concluded by saying that he as Prime Minister heads the new Council for NATO Membership, formerly the Council for the Partnership for Peace, and that the National NATO Coordinator has been appointed.