Applying European regulations will bring to greater competitiveness of economy

Applying European regulations and standards in Chapter 17 - Economic and Monetary Union will contribute to ensuring price stability as well as increasing the competitiveness of the economy, which ensures the maintenance of macroeconomic security, Chief Negotiator with the European Union Aleksandar Drljević said.

"Through the establishment and implementation of European policies and procedures we will improve the overall economic environment, which will affect the social development and quality of life of citizens. Also, we will prepare the Montenegrin economy to be an equal player in the implementation of the common economic policy, " Drljević said in an interview with Mina-business agency.

Commenting on the specifics in the EU negotiations on Chapter 17, considering the existing monetary regime of Montenegro that has been using the euro as the official means of payment since 2002, Drljević said that the use of the euro is not called into question.

"The fact is that the way of using the euro, as an official means of payment in Montenegro, differs from the membership in the Economic and Monetary Union. In this regard, we are decisive and we are working to fulfill the criteria of convergence for joining the euro zone during the negotiation process, with their specific modification in the case of Montenegro," Drljević explained.

He recalled that EU regulatory requirements relating to the standards for the use of the euro were fulfilled, as noted by the European Commission's progress reports on Montenegro in Chapter 32, the part relating to the protection of the euro against counterfeiting.

Drljević said that the opening of Chapter 17 was an acknowledgment that Montenegro had fulfilled the expectations of the EU in that area, i.e. the progress that the Union expects at that stage of the negotiations.

"Further harmonisation with European regulations and strengthening of administrative capacities for their efficient and high-quality implementation shall continue. In this regard, the main challenge we see is the amendment to the Constitution, at the request of the EC, towards the harmonisation of the Central Bank's objective with the aim of the European System of Central Banks," Drljević said.

In addition, he added, further work on strengthening fiscal stability and meeting the requirements of the market economy expects Montenegro.

Drljević believes that in this regard, a special challenge will be the implementation of statistical standards ESA2010, which is supported by experts from EU member states.

"Challenges and work lie ahead of us. Having in mind the importance of this chapter for the Montenegrin economy, we have already undertaken the required activities whose implementation and improvement we will continue in the future, in order to achieve further economic and financial growth, through strengthening the economic activity and competitiveness of the Montenegrin economy," Drljević said.

When asked how Montenegro can respond to the challenges of closing Chapter 17, Drljević replied that the final benchmarks relate to further harmonisation with European criteria in that area.

"They are very demanding which, I expect, will lead to closing this chapter among the last ones, but on the other hand, it will leave enough time to respond well to all obligations and prepare for future membership," Drljević said.

When it comes to monetary policy, he reminded that the adoption of amendments to the Law on Central Bank of Montenegro (CBCG) and on current and capital affairs with foreign countries fully applied the principle of independence of that institution.

"Also, by adopting amendments to the Law on CBCG and the new Decision on closer conditions for granting loans to banks in case of need for liquidity, we completely implemented the principle of banning monetary financing of the public sector," Drljević said.

As he said, in the coming period, Montenegro will continue to harmonise the legal framework with the aim of fully applying the principle of prohibition of privileged public sector access to financial institutions and full integration of CBCG into the European System of Central Banks.

"In that sense, the adoption of two important laws, namely the protection of deposits and insurance, as well as the amendment of the Constitution lie ahead of us," Drljević said.

He assessed that good progress in Chapter 17 has been made during the previous period, which is also evident in this year's EC report on Montenegro.

Drljević reminded that in order to meet the criteria for opening this chapter, in March last year, the Action Plan for harmonisation with the acquis in the field of economic and monetary policy was adopted.

The document defines goals and deadlines for the full harmonisation of domestic legislation with the EU acquis, as well as measures for further strengthening of administrative capacities.

Drljević recalled that in order to increase accountability and ensure sound financial management, the Government adopted in December 2015 the Public Finance Management Reform Programme 2016 - 2020, which prescribes the key reform plans of Montenegro in that area.

"In order to further improve this area, the Government has adopted the Guidelines for Macroeconomic and Fiscal Policy 2018 - 2021, as well as the Medium-Term Debt Management Strategy 2018 - 2020," Drljević said.

He noted that in January the Government adopted the Economic Reform Programme (PER) 2018 - 2020, which is structured according to the requirements and methodology of the EC and is the most important document of Montenegro in the economic dialogue with the EC and the EU member states.