Press release following Cabinet meeting

With a view to providing support to agricultural producers and mitigating the consequences of this years drought, at todays Cabinet meeting chaired by Deputy Prime Minister Gordana Djurovic, the Government adopted alterations to the Bill amending the Value Added Tax Law. The alterations include a reduction in VAT on flour, meat and live animals from 17% to 7%, together with a zero VAT rate on bread. However, the tax relief would take effect no sooner than May 31, 2008. The proposed relief will retain the retail prices of those products at their current level, the Cabinet concluded.

In accordance with the Lisbon Convention on the Recognition of Qualifications concerning Higher Education in the European Region, the Government adopted the Bill on the Recognition and Valuation of Education Certificates. For the purposes of rationality and efficiency, the same regulation will also define the issue of evaluating national certificates of education.

In consideration of its strategic priority of promoting regional security, the Government endorsed the Bill ratifying the Police Cooperation Convention for South Eastern Europe. The purpose of the Convention is to establish closer ties between police authorities in combating public security threats, including a joint action in preventing and suppressing all forms of crime, particularly organized crime.

As part of its regular activities in the sphere of European integration, the Government adopted the Contribution to the European Commissions annual Progress Report on the Stabilization and Association Process for Montenegro. The Contribution sets out the most significant results in terms of legislation and implementation of new regulations, adoption of European regulations and strengthening of administrative capacity, in accordance with the political and economic association criteria and European standards.

Having monitored the situation in foreign trade, the Government considered and adopted the Communication on Foreign Trade in Goods for 2006 and the first six months of this year, as well as the Report on the Implementation of the Export Encouragement Strategy. Strong economic growth and massive inflow of direct foreign investment increased the volume of foreign trade, which in turn resulted in the expected rise in visible trade deficit. Regardless of this, there was a series of positive trends, the most important being a considerable growth in exports to developed countries and return to the regional market, which was a definite proof of the increasing competitiveness of Montenegrin goods.

Furthermore, the Government adopted the Communication on the Results of Negotiations between the Republic of Montenegro and the European Bank for Reconstruction and Development concerning the Project of Urgent Reconstruction of Railway Infrastructure. At the same time, the Government endorsed the credit arrangement for this project.

With a view to meeting the standards set forth in the Convention on International Civil Aviation, the Government adopted the Memorandum of Understanding between the Republic of Montenegro and the International Civil Aviation Organization concerning aviation safety control.

In addition, the Government considered a number of other issues within its purview.