Montenegro's Euro Model Dilemma: Balancing Wage Growth and Economic Stability

Montenegro's entry into the European Union has sparked debate about adopting the 'Euro model' to address low wages and mass workforce departure. Slobodan Mikavica, President of the Employers' Union, warned that ever-higher wage growth could push up prices and inflation, endangering public finances, small businesses, and the pension system.

However, Stevan Gajević, an economist and financial consultant, questioned whether serious economic reform can be built on consumption growth. The proposed model has yet to receive approval from employers and signing of the General Collective Agreement by October is uncertain.