Statement of the Ministry of Finance on the occasion of the article “Budget Rebalance in April“

The Ministry of Finance is not considering the budget rebalance option for 2010, bearing in mind that generated budgetary revenues in January were achieved according to plan set forth in the Budget Law for 2010, adopted by the Parliament at the end of December 2009, out of which the taxes and contributions were generated in the amount of 98% compared to the monthly revenue plan for January. Moreover, there is no delay in payments payment from the Main Treasury Account. All payments, in the first place the salaries, pensions, social benefits, are being paid in accordance with the planned payment schedule. All payments are made in accordance with the Direction on the State Treasury Operations, within 30 days following the submission of the payment order. All fiscal adjustment, which the Ministry of Finance carried out in the past, are focused on public finance sustainability in 2010, and the forthcoming years. The aforementioned adjustments in 2009, resulted in the budgetary deficit (2.3% of GDP), which is lower than planned by the rebalance, as well as increase in state deposit exceeding 80 million Euros and which will not be used to finance current expenditure, but are intended to be used in case of a need for funding infrastructure – related projects and repayment of debt, which is in line with best international practice. We are emphasizing that the funds received from the EPCG recapitalization and partial privatization, have not been spent because the implementation of additional cost – saving measures will continue regardless of the budget rebalance for 2009. For the purpose of funding, primarily infrastructure – related projects and repayment of debt, the Ministry of Finance considers several options not facing the problem with the provision of financial resources, given the low indebtedness level of Montenegro (37.5% of GDP).