'Euro model' Deception: Montenegrin Citizens Face Uncertainty and Inflation

Montenegrin citizens are being deceived by the proposed 'Euro model' of amendments to the financial laws, which will increase their income but lead to inflation and uncertainty. The model is not fiscally neutral, as the state's liabilities will grow, while revenues from pensions, social benefits, municipalities, and public services will decrease.

According to Miloš Vuković, executive director of 'Fidelity consulting', the Montenegrin economy has not become more productive, and the increase in salaries is not based on economic growth. The government's proposal to abolish PIO contributions, increase minimum wages, and raise corporate tax rates will lead to a significant part of the debt being financed through loans.

Vuković points out that the loss of revenue to the state budget will not be compensated in full, leaving a gaping hole of 300 million euros. The government is trying to give the impression that this reform will not jeopardize public finances, but it is entering into open conflict with the rules of fiscal responsibility.

The proposed amendments will also affect pensioners, who are promised an increase of around 50 euros, while employees are promised an increase of 400 euros. However, inflation will 'eat' the former much faster than the latter.