Montenegro's Proposed Financial Reforms Criticized for Lack of Fiscal Responsibility

Miloš Vuković, executive director of 'Fidelity consulting', has spoken out against proposed amendments to Montenegro's financial laws. According to Vuković, these changes will lead to inflation and uncertainty for citizens.

The proposed reforms include abolishing PIO contributions, increasing minimum wages from 600 to 1,250 euros, raising corporate tax rates, and transferring part of taxes from municipalities to the state.

Vuković claims that the government is trying to create an illusion of a 'Euro model' by promising higher salaries and pensions, but in reality, the state will have to borrow at least one billion euros by the end of the year to finance its spending.

The executive director points out that the Montenegrin economy has not become more productive or competitive, and therefore cannot support a 12-fold increase in average salaries. He warns that this model is not fiscally neutral and will lead to a gaping hole in the state budget of around 300 million euros.