The third package of aid measures and wishes (INFOGRAPHIC)

As part of the third socio-economic package of measures to mitigate the consequences of the corona crisis, this year the economy will receive state support of 281,2 million euros, of which 82,7 million euros is for initial support, and the rest of 198,5 million for medium and longer term.

Short-term measures include aid to tourism and a one-year reduction of VAT on food and part of beverages from 21 to seven percent in catering establishments, wage subsidies, incentives for agriculture, agro-industry and fishing, improving the competitiveness of the economy, one-time assistance of 200 euros for users material security of families and soldiers (1,8 million in total)... Before the parliamentary elections, it is expected that an increase in the lowest pensions from 128 to 145 euros and more favorable retirement conditions will be provided, after the government delayed the proposal of that law, which will soon adopted by the Assembly.

"The entire amount of money for this year from the third package was provided by the budget rebalancing", said Prime Minister Duško Marković.

Long-term and medium-term support includes strengthening the IT sector, support for tourism and traffic, agriculture and rehabilitation and development measures, which include energy projects.

"Vijesti" provides graphic displays with data on what is foreseen in the third package, which reminds of another one of the four-year state development strategies that may or may not come true.

Yesterday, the government adopted a new part of the support, showing that the total is worth 1,22 billion or about 300 million per year, and of the total sum, 1,09 billion refers to rehabilitation and investment measures in the medium and long term, expected and desired investments. Short-term measures are estimated at 127,4 million.

The package arrives exactly three months after the adoption of the second set of measures and the government is promoting it before the parliamentary elections, scheduled for August 30.

Dialogue

The government claims that the third package was reached through dialogue, i.e. taking into account the recommendations of the economy, social partners, business associations, international organizations and the academic community, as well as that during the preparation of the package, consultations were held with domestic and international institutions so that, with the support of the state, provided the most favorable financial conditions while preserving the system. Part of the social partners complained that they were not consulted, calling on the Government to accept the demands of the economy due to the corona crisis, so that the layoffs of workers could be stopped.

Marković said that the total amount and allocation will be reached in a fiscally sustainable way, with a stable system.

"In order to implement the economic strategy planned in this way, the Government has prepared a whole range of legislative interventions. It implies the adoption of two new laws, namely on innovative activity and on incentive measures for the development of research and innovation. There are also substantial interventions in terms of amendments to two other important legal texts on value added tax and energy", explained the Prime Minister.

What does tourism get?

The tourism sector, which is one of the most threatened, will initially receive 83,35 million euros in four years, of which 51 million this year will continue to be supported by new measures.

The State Secretary of the Ministry of Sustainable Development and Tourism (MORT) Damir Davidović explained that this assistance entails the reprogramming of existing loans from banks for a period of one to two years with an interest rate subsidy, and a maximum of three percent during the grace period, the equalization of the VAT rate for food and beverage services (except alcohol, coffee and carbonated products) in all catering facilities, loans for liquidity and working capital with a repayment period of up to seven years and a grace period of two years, with an interest subsidy of up to three percent during the grace period.

"There are also subsidies for tour operators for organized arrivals of tourists in this and next year who stay in Montenegro for at least seven days, according to the criteria set by MORT, and a special budget for the marketing campaign in this and the next year, subsidies for earnings in tourism, reduction of the annual fee for the use of marine property", stated Davidović.

Subsidies and investments

From August 1, the Ministry of Economy continues to subsidize the minimum wage of employees for July, August and September for prohibited activities, tourism, catering, road traffic, quarantine and self-isolation, parents/guardians of children under seven years of age and new employment. There is also non-refundable support for the economy within the framework of the competitiveness program, interest-free loans for households for an energy-efficient home, interest subsidization for development projects in industry, with an emphasis on food, wood and metal, as well as mining - with a concession fee of 0 percent, investment grants and subsidized loans for further processing of mineral raw materials...

The Minister of Economy, Dragica Sekulić, said that long-term investments in the field of energy are planned by state-owned enterprises.

"The plans of the largest energy companies in the country include investments with a total value of around one billion euros. By 2024, around 734 million investments are expected to be realized. It is estimated that from the total amount, about 350 million can be contracted with Montenegrin companies as contractors, manufacturers and sellers", the minister emphasized.

The government also announced 30 million over the next four years to strengthen the IT sector in direct partnership between the state and the domestic economic sector, with the participation of foreign direct investments.

Quick penetration

"The measures are aimed at the IT sector becoming a new strong economic branch, with high export potential, and for the IT economy and digitalization to become catalysts for the development of an innovative economy that will strengthen our traditionally strong economic branches (energy, tourism and agriculture) and which will be in operation the digital transformation of the country", said Minister of Science Sanja Damjanović.

The Deputy Prime Minister and Minister of Agriculture, Milutin Simović, explained that they have prepared a "quick penetration concept" worth 89,4 million for agriculture and fisheries, which will provide import substitution of over 94 million euros. The concept of rapid penetration in the fields of agriculture and fisheries implies concrete projects in the fields of meat, fish, vegetable, fruit, flour and oil production.

How to save 17 million

In order to provide additional money for the third package of measures, new savings are planned in the budget, which would reach 17 million euros.

All consumer units are tasked to revise their budgets within ten days and to save at least 10 percent of unspent money. In particular, they should analyze the items - other personal income, expenditures for materials, services, current maintenance, subsidies, capital expenditures... Departments and state institutions are responsible for reducing rent for accommodation by 30 percent, or if they cannot do it as soon as possible to look for another, cheaper space.

If there were less cars

It is also planned to reduce the number of official vehicles and to save five million on that basis. For this measure, a working team will be formed that will analyze the state of the vehicle fleet, determine surpluses and what to do with them.

The government also plans to propose changes to the Law on Salaries in the Public Sector in order to equalize the salary policy in companies in which the state is the majority owner.

Reduce salaries in state-owned companies

It was ordered that state representatives in companies that did not halve management salaries, in accordance with the Government's decision in the second package of measures, initiate the procedure to reduce salaries for August and September and to transfer that money to the state budget. It is estimated that this saving will bring about two million.

Waking up of the first package: Delayed payment

Prime Minister Marković said that the first package of measures amounted to 280 million euros and was mainly related to the maintenance of current liquidity and support to the most vulnerable categories of the population.

Of that sum, 205,8 million refers to the postponement of obligations with the IRF, tax obligations and rent. All those obligations must be paid - they are not forgiven. The package also included more favorable credit lines for liquidity.

"The second set of measures was created in the direction of preserving jobs and creating assumptions for a faster recovery of our economy. We allocated around 40 million euros for this until June alone," said Marković.

There is no mention of the continuation of the highway construction

Loans of around 11 million euros are planned for the transport sector, and this money would be used for the valorization of port resources and the expansion of their capacities, with an emphasis on the Port of Bar. In the third package, there is no information about the highway, i.e. it is not mentioned that its continued construction is planned as part of the investments. The construction of the first section is delayed, and the announcement is that it will be completed by the middle of next year.