All the countries of the region are faced with the problem of public debt, and the situation in Montenegro is further complicated by the fact that its government does not have a clear vision regarding the management of public finances, it was assessed today at the conference on public debt in the countries of the region, which was organized by the regional coalition Balkan Monitoring Public Finances. The representative of the World Bank (WB), Sanja Madžarević Šujster, said that short-term fiscal planning is what hurts the entire region. "We are living in a period of high volatility and this is reflected in the countries of the Western Balkans, where the growth rate has halved since 2009," said Madžarević Šujster.
She reminded that all the countries of the region have invested in highways, which are projects with a long return on investment, which is why the public debt has increased. When asked how she comments on the fact that the Montenegrin government used 500 million for refinancing out of the 300 million euros it borrowed through the Eurobond issue, while 200 million is in the budget reserve and interest is paid on them, she replied that it is an ongoing process. "I don't think it's about 200 million euros. I assume that the Government will come out with that information. It may happen that you will have funds in deposits for refinancing next year. It is smart to save unused funds and not take on debt next year," said Madžarević Šujster. She explained that small countries always have larger deposits precisely because of this volatility and uncertainty as to whether they will have access to the market next year and at what interest rate. "It is important to establish strong institutions that have their own clearly defined tasks, namely the Ministry of Finance, which must defend the sustainability of public finances, realistically plan and strengthen the control of public funds," said Madžarević Šujster.
She warned that with this level of public debt, the economy will not be able to grow and Montenegro must have a surplus in the budget in order to repay the debts. Coordinator for public finances in the Network for the Affirmation of the Non-Governmental Sector (MANS), Ines Mrdović, believes that the Government's policy in public finances is risky and on the edge of a razor's edge. "The government does what it wants, does not consult anyone else and is deaf to the advice coming from other addresses," said Mrdović. She announced that the current national debt of Montenegro is 70 percent of the gross domestic product (GDP), ie 3,1 billion euros, and in 2007 it was 737 million euros. "The debt has quadrupled in a decade. Municipal debt and some old debts are missing, so we can say that the total debt in the middle of this year amounted to 75 percent of GDP, without a good part of the debts of public companies, which are a mystery," said Mrdović. Mrdović added that in the previous two years, the Government needed half a billion euros per year for the liquidity of budget financing and refinancing of obligations. She said that there was a noticeable and dramatic drop in deposits, from 167 million euros in 2007 to 29 million last year. Mrdović said that some of the reasons for the collapse of public finances are the aid to Prva Banka in 2008, the payment of guarantees to private companies, primarily to the Aluminum Combine, huge tax debt, salary increases to the state establishment, cumbersome state administration, elective employment, payments of arrears of pensions, restitution, old foreign currency savings and highway. "Citizens pay for all this through the increase in value added tax (VAT), the crisis tax on wages and the increase in excise taxes. The government does not think of increasing the profit tax, fixing the area of concessions and reducing the cumbersome state administration", said Mrdović.
Professor of the Faculty of Economics in Zagreb, Anto Bajo, warned that every debt comes to be collected, regardless of the generation that made it. He cited the example of the debt of the Kingdom of Yugoslavia that is due this year. According to his words, history says that before the war, debts were due in 50 years, and now the due date is much shorter, so they are due for collection in three to five years in Montenegro or in Croatia in 15 years. "Decision-makers tend to say that debt is decreasing because GDP is increasing. But the nominal value data shows that the debt is not decreasing, it is actually increasing. Taking care of the public debt must be systemic," said Bajo. The editor-in-chief of the NIN weekly, Milan Ćulibrk, said that citizens in Serbia and the countries of the region do not know how their money is spent. "It is also incomprehensible how easily some claims and ideas of the representatives of the authorities pass. Capital investments were the first victim of all governments in Serbia," said Ćulibrk. He also believes that the existence of a surplus in the budget is a reflection of poor planning. He said that the private sector should be encouraged more and the public sector less. Former Minister of Finance and Member of the Parliament of Montenegro, Raško Konjević, believes that the amount of public debt of 70 percent of GDP would not be a problem in the future if the Government worked on other things that would further strengthen the economy. "We need to have a common policy, regardless of which structure is in power. It is also necessary to strengthen the medium-term fiscal plans, because every year we have to correct the plans", explained Konjević. He also said that he did not know how much the state's public debt would be, if the debts of public companies were included. Mark Perera from the Eurodad organization reminded of the trends in the world and that public debt is a big risk for countries with low incomes, and the highway loan is especially risky for the public finances of Montenegro due to the currency risk. Representatives of the Balkan Monitoring Public Finances coalition, Ajda Pistotnik and Andreja Živković, presented parts of the study Public Debt in Southeast Europe - Why Allow Public Participation, which showed that the growing trend of public debt in the Western Balkans "already sets off alarm bells". The average debt in the region has increased since 2007, with the exception of Kosovo, which managed to maintain its debt at the pre-crisis level. All other women are trying to get fiscal positions back on track. The study showed that unavailable public finances and growing public debts threaten some of the countries in the region. "Therefore, it is necessary to carefully monitor the movement of debt, and a timely response to unsustainable developments is of crucial importance for maintaining macro-economic stability," the study stated.
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