MONTENEGRO

Negotiating Team for the Accession of Montenegro to the European Union

Working Group for Chapter 17– Economic and Monetary Policy

Bilateral screening: Chapter 17

PRESENTATION OF MONTENEGRO

Brussels, 25 February 2013

Chapter 17: Economic and Monetary Policy

Fiscal Policy
• Focused on securing economic growth.

• Competitive and simple tax system.

• With the lowest tax rates in the region and one of the most competitive
in the Europe.

• We attempted to resolve the problem of economic illiquidity by

abolishing the income tax payment in advance and facilitating the
payments of this obligation in a period of six monthly instalments. Also
we have introduced the reprogramming the tax liabilities instrument, as
well as the possibility of the deferred payment of customs duties.

• Largely aligned with the Acquis.

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MONTENEGRO Chapter 17:

Negotiating Team for the Accession of Montenegro to the European Union Economic and Monetary Policy
Chapter 17: Economic and Monetary Policy

Fiscal Policy

Fiscal policy objectives:

• Extension of the tax base, with fewer exceptions

• Attracting stable and strong investors
• Further harmonization of tax laws with EU legislation
• Reduction of grey economy

Temporary Measures:

• The introduction of the crisis tax on income

• The freezing of the pension increase

MONTENEGRO Chapter 17:

Negotiating Team for the Accession of Montenegro to the European Union Economic and Monetary Policy
Chapter 17: Economic and Monetary Policy

Fiscal Policy

- Budgetary balances 2006-2011

- Public debt

- Long term sustainability of public finances

- Bugetary rules and institutions

- Bugetary framework
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MONTENEGRO Chapter 17:

Negotiating Team for the Accession of Montenegro to the European Union Economic and Monetary Policy
Chapter 17: Economic and Monetary Policy

Coordination of economic policies

Preparation

As a potential candidate country Montenegro prepared 6 EFPs.

As EU candidate country we submitted second PEP.

Preparation for every Programme starts in September with Workshop
where team is informed with their obligation, with conclusion where
we have to improve previous Programme.

The quality of the EFP, namely PEP is improving each year.

40 people from various departments are gathered due to the
preparation of the documents, whereas the coordination is entrusted
to the MoF -Department of Economic Policy and Development.

MONTENEGRO Chapter 17:

Negotiating Team for the Accession of Montenegro to the European Union Economic and Monetary Policy
Chapter 17: Economic and Monetary Policy

Coordination of economic policies

• With regard to the years of experience in the preparation of EFP, as
well as PEP, we clearly state that we are dealing with a high quality
team with reinforced capacities.

• Montenegro was one of the first countries to introduce the alternative

scenarios, which later became the European Commission's
recommendations for other countries.

• The novelty of this year's PEP is the introduction of boxes, which are
aimed to explain the specifics of our economy.

• The budget process is consistent with the time dynamics of developing

the PEP, and it was aimed to create the preconditions for conducting
the economic dialogue.

• For the purpose of conducting a clear economic dialogue, the MoF 6

participates twice annually in the meetings of the EC, regarding the
macro
MONTENEGRO
and fiscal projections (spring and
Negotiating Team for the Accession of Montenegro to the European Union
autumn). Chapter 17:
Economic and Monetary Policy
Chapter 17: Economic and Monetary Policy

Fiscal Surveliance
- Each year from October to the end of year MoF with other institution in
MNE prepare PEP.
- Based on agreed format with Commission.
-Focus on medium term projections
- Goals macroeconomic stability and fiscal sustainability
- Increase in transparency
- MNE is member of IMF GDDS System
- Improved data quality and availability on monthly and quarterly level
- Fiscal discipline
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MONTENEGRO Chapter 17:

Negotiating Team for the Accession of Montenegro to the European Union Economic and Monetary Policy
Thank you for your attention

QUESTIONS