If the Government were to meet employees in education and other workers who receive salaries from the budget and increase their wages, it would represent a step backwards in the implementation of the policy of stabilization of public finances, for which we receive praise from the international community, the Ministry informed "News" yesterday of finance.
The wave of fuel and food price hikes that has recently hit Montenegro is the reason why the Education Union asked the Government for a salary increase.
They believe that this is the only way for workers to survive and be able to keep up with daily price increases. However, the reaction of the Ministry of Finance is not encouraging at all.
"Demands from certain industries for salary increases, which come in a situation in which our economy is gradually recovering from the consequences of the economic and financial crisis and in which conditions must be created for a faster recovery, have no economic justification and their possible fulfillment would have a very negative impact on public finances in Montenegro," said the Ministry.
According to their opinion, unstable public finances mean simultaneously endangering the normal functioning of all services for citizens, including questioning the regular payment of benefits from the budget.
"When considering requests for salary increases, it should be borne in mind that, in accordance with the Law on the Budget for 2011, 392 million euros are planned to be spent on gross salaries and other personal incomes, while the total current spending is planned at the amount of 1,17 billion euros, which means that our earnings make up 33,4 percent of current consumption," the Ministry announced.
An increase in wages would lead to a deficit
It was reasoned that every percent of the possible increase in wages financed from the budget would cause an automatic increase in the deficit by about 0,3 percent, and, therefore, an increase in the national debt.
"Also, it represents a backward step in the implementation of the policy of stabilization of public finances, for which we receive praise from the international community, first of all, the International Monetary Fund and investors," the Ministry announced.
It was also announced that a slight increase in wages can be expected in the coming period, based on the General Collective Agreement signed at the end of last year and the Agreement on determining the calculation value of coefficients and the starting part of wages.
"Vijesti" was also told that the current price increases will certainly have an impact on inflationary trends, and the increase in inflation could also be influenced by a possible increase in wages, which is one of the main causes of inflation growth.
"Nevertheless, it is important to emphasize that the prices that are currently increasing are subject to change, and that their stabilization is possible in the coming period," said the Ministry.
There should not have been an increase in fuel prices
Fuel prices in Montenegro have been record high since Tuesday, and this has been confirmed by the Ministry of Economy.
It is incomprehensible that the Government cannot intervene in the increase of fuel prices, if it is taken into account that the excise duty and value added tax (VAT) on unleaded gasoline make up more than 50 percent of the retail price, while in the case of Eurodiesel, that participation makes up 47 percent.
On the other hand, the Union of Employers (UPCG) believes that the increase in fuel prices should not have happened at all, first of all because the price of a barrel of oil on the world markets was lowered due to the earthquake in Japan.
Dragiša Boričić, Vice President of the UPCG for Economy, told the Mina-biznis agency that he believes that article seven of the Government Regulation, which determines fuel prices, should be applied and the increase should be suspended, because it will cause an increase in the price of other products and services, which will have an overall effect on the Montenegrin economy. Above.
"This should be done, regardless of the small savings of half or one cent per liter, if the methodology is corrected. The price correction should certainly be done by lowering the excise duty, as Croatia did," Boricic said.
Borićić added that it is incomprehensible that the Government cannot intervene in the increase of fuel prices, if it is taken into account that the excise duty and value added tax (VAT) on unleaded gasoline make up over 50 percent of the retail price, while in the case of Eurodiesel, that participation makes up 47 percent.
The price of a liter of unleaded Eurosuper 95 and 98 is three cents more expensive and costs 1,34 and 1,37 euros respectively, the prices of Eurodiesel have increased by five cents to 1,3 euros per liter.
Possible higher vegetable prices
The increase in fuel prices came at a bad time for agricultural producers, who in the coming period need to prepare for this year's sowing.
Vice President of the Union of Agricultural Employers Željko Vidaković told "Vijesta" that fuel prices will be included in the selling price of fruits and vegetables that will be ready for harvest during spring and summer.
"Either people will give up production or the price of the final product will increase. It is inevitable," said Vidaković.
The price of fuel is one of the basic components that form the final price of agricultural products, because it includes plowing, transportation, fertilizer and much more.
"For ten years, we negotiated with the recent Minister of Agriculture, Milutin Simović, and we presented to the new minister a proposal to subsidize the price of oil for agricultural producers. Everyone agrees with that in principle, but there is no progress," he said.
Citizens pay the price
Vidaković said that UPCG advocates subsidizing according to the model accepted by developed countries, according to which farmers pay half the price for fuel.
"A subsidy of five cents would mean nothing to us. That's why they should lower it by 45 or 50 cents, because you can't pay the same for fuel for a tractor and for a luxury car. We're asking for a deduction from the taxes that the state takes for road maintenance and the like , because we don't wear out the roads, we plow the fields," said Vidaković.
He said that additional price increases will be inevitable and that in the end the price will be paid by the citizens.
"They don't give us subsidies, and then they declare us uncompetitive," he said.
Bonus video:
