Montenegro and European Union

Montenegro slowly prepares for the possible start of negotiations with the EU, and Government did several actions in that regard. Firstly, Montenegrin Ambassador to the EU, Aleksandar Pejovic, has been appointed as the chief negotiator for the upcoming talks with the EU. Government is yet to create a team for negotiations although there have already been many discussions in the media pertaining to the structure of the team, and if it should include also members of the opposition, civil society, academics and other independent experts. Here are some latest news related to Montenegro’s relations with the European Union.

The Government of Montenegro adopted earlier today the Pre-accession economic programme (PEP), a fiscal surveillance procedure, for the period 2012-2014 the Finance Ministry’s Tijana Stankovi? told the press following the Cabinet meeting.

The PEP aims at preparing the EU candidate countries for the participation in the multilateral surveillance and economic policy co-ordination procedures currently in place in the EU as part of the Economic and Monetary Union.

The priority goal in the medium-term is to secure conditions for the FDI growth, which can be achieved by upgrading the economy’s credibility on the basis of fiscal and financial stability.

Montenegro’s PEP 2012-2014 expects GDP growth between 0.5-2% in 2012, between 1.5-3.5% in 2013 and between 3.5-4% in 2014. The numbers are generated based on a conservative and cautious approach which is due to the current and previous dynamics in the global economy, the Finance Ministry says.

It is planned that the public expenditure, currently at 43%, will be reduced to 38% by 2014, and a budget surplus of 1.03% of the GDP is expected in 2014, along with the declining trend of public debt, expected to reach the level of 42.9% in 2014. A less optimistic scenario envisages a mild reduction of public expenditure, to 40.2% in 2014, a decline in public finance deficit to a 1.7%, and a decreased public debt to 47.4% in 2014.

The Finance Ministry reminds that the PEP is very similar to Government’s previous economic and fiscal programmes for medium term, only goes more in-depth. They also remind that the PEP is among the most important documents a candidate country drafts for the purposes of multilateral financial oversight, and at te same time an instrument that improves cooperation with the European Commission, chiefly in the fiscal area.

The main benefit a country gains from drafting a PEP is a benchmark for creating a consistent economic policy, particularly bearing in mind that this programme is updated annually and includes revision mechanisms.

source: Montenegro Government

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