The Ministry of Finance, when it comes to the preparation and parameters of the draft budget for the next year, has had no communication with the International Monetary Fund (IMF) so far.
This was officially answered in the department headed by the outgoing minister Darko Radunović to the question of whether the key parameters of the upcoming budget for the next year are agreed with the IMF, as individuals speculate in public, and that the future government cannot change them.
"The Ministry of Finance has regular communication with all international financial partners, including the IMF, with which, in addition to regular consultations, it uses the technical support of IMF experts in the field of debt management, tax exemptions, tax administration reform, conducting analysis of public investment management... We signed credit arrangement with the IMF through the rapid financing instrument in order to mitigate the negative effects of the covid-19 pandemic on public finances and provide the necessary money for financing this year. "When it comes to the preparation and parameters of the draft law on the budget for 2021, the ministry has not had any communication with the IMF so far," said the government department.
The Ministry of Finance announced that the draft budget was completed within the legal deadline of October 30, but they did not send it to the Government and then to the Assembly because the mandate for the composition of the new Government, Zdravko Krivokapić, announced the reorganization of the executive power.
Krivokapić announced that he will have a budget proposal by December 20, and claims that they could not get the necessary information about employment and budget planning from the Ministry of Finance.
Radunović's department denied this and invited Krivokapić to a meeting, as well as to submit a draft regulation on the new organization of the public sector, so that the information system for planning and preparing the budget and connecting program activities would be adapted to the new organizational scheme in time.
Candidates for ministers: They will receive a reorganization plan
When asked by "Vijesti" whether they would deliver what the Ministry of Finance requested, the expert financial and economic team of the mandate said that "the necessary information and presentation of the reorganization plan will be adequately communicated with the representatives of the Ministry of Finance of the Government in the technical mandate, if with that addresses, there is a genuine will to eliminate potential obstructions".
"Optimizing the number of ministerial positions is the first step towards the improvement of state administration and putting it fully into the service of building the foundations of our society's development, which are the rule of law, economy and public finance, and health and education. In accordance with the explanations already given by the mandate holder, the Government will have 12, instead of the previous 18 ministries. This implies the reorganization and consequent systematization of the state administration and the entire public administration. We will adequately communicate the necessary information and presentation of the reorganization plan with the representatives of the Ministry of Finance of the Government in the technical mandate, if there is a genuine will to eliminate potential obstructions from that address. In the example of the request for information on "submitted requests for employment in the state administration in the period from September 1, 9 to October 2020, 26", we encountered a refusal from the previous Ministry of Finance. We hope that this will not be the case in this matter as well", it is stated in the answers signed by the candidates for the ministers of finance and social care, economic development and capital investments Milojko Spajić, Jakov Milatović and Mladen Bojanić.
They said that they will have a more complete picture of the key parameters of the budget for the next year after the upcoming meetings, which will be an opportunity to clear up many doubts and get a more realistic insight into the situation they find.
The recession in the country is one of the biggest in Europe, and this was contributed, among other things, by the wrong economic policy of the previous government, which almost "put all the eggs of economic activity in one basket" - tourism, according to Spajić, Milatović and Bojanić.
Candidates for ministers hope that the team proposed by the Ministry of Finance will be cooperative, that they will not encounter obstructions and that it is in the interest of all citizens of Montenegro to approach the problematized topic as dedicatedly as possible.
An arrangement with the IMF is an option
Last week, the mandate holder stated that an arrangement with the IMF is an option for his government.
"If this is the only measure to bridge the big economic problems we have, we will probably enter into an arrangement with the IMF, where we want to rationalize the public administration." This is the first step towards that rationalization (reduction in the number of ministries), and we want to keep salaries and pensions at the level we have now", said Krivokapić.
"Vijesti" asked Radunović's cabinet whether an arrangement with the IMF as support for the budget is a certain option for the next year.
"IMF support is a joint decision of the Government and the IMF, and it takes time and fulfillment of all procedural aspects to realize it. The IMF is a credible partner and with its support, the funds required on the capital market can be provided with great transparency. The extent to which it will be necessary to consider an arrangement with the IMF will depend on the sustainability, stability and credibility of the fiscal policy that the Government will present within the budget for 2021, and the perception of foreign investors when entering the capital market," the Ministry of Finance replied. .
Strong recession, wrong decisions, further delayed tourism...
The three candidates for ministers said that the change of government in Montenegro is taking place at a more difficult economic time than ever, that the recession in the country is one of the biggest in Europe.
"This was contributed, among other things, by the wrong economic policy of the previous government, which almost "put all the eggs of economic activity in one basket" - tourism. At the same time, with unreasonable decisions to close the border with some of the most important emitting tourist markets during the summer season, the previous government further set back tourism and overall economic activity in the country. Montenegro is in a rather unenviable situation in terms of public debt, which according to data from international financial institutions is over 90 percent of GDP, which characterizes Montenegro as the most indebted country in Central and Eastern Europe. Part of that debt was also created as a result of bad, and sometimes harmful, business and economic decisions of the previous government", it is stated in the answers of Bojanić, Spajić and Milatović to the "News".
It was explained that those wrong decisions from the past today significantly limit the amount of aid that the state can provide to the economy and the socially vulnerable population in the midst of the crisis due to the coronavirus.
Misunderstanding or avoidance of a regular meeting with the IMF
Krivokapić said last week in the show "Načisto" on Television Vijesti that he and Spajić had communication with the IMF and that a telephone conference should have been held, where, in addition to them, Radunović and outgoing Prime Minister Duško Marković would have been present, but that representatives of the technical Government refused the meeting in that composition.
"Vijesti" asked the Ministry of Finance for the reasons for rejecting that conference, they replied that there were no official requests for the expansion of the delegation, and that they attended regular meetings from October 12 to 22.
They state that regular autumn and spring meetings are held with the IMF and the World Bank, for which the procedure for registering delegation participants is determined.
"During those meetings, the Ministry of Finance did not receive an official request nor did it have direct communication with interested parties that the delegation be expanded. Considering the statements on this matter, it is obvious that there was a misunderstanding, so we would not comment on the allegations in detail, but if necessary, the clarification will be given in direct communication with the representatives of the future Government", the Ministry pointed out.
At those meetings, where the Central Bank also participates, challenges for the economy, relevant questions about the financial system, macroeconomic and fiscal policy are discussed...
The candidates for ministers said that, bearing in mind the danger of the economic situation in the country and the desire to get the best possible insight into the state of public finances in order to adequately approach the creation of economic policy, they were disappointed by the "blockade of their presence at the regular annual meeting of the Government with the IMF for which we, as a government in the making, received an invitation from the IMF to participate".
"That procedure was a bad example before the international financial community and harmful to citizens and the economy. That's why the Ministry of Finance's call for dialogue can be a move towards better behavior by the current government, and we expect it to start as soon as possible", is the message of the three ministerial candidates.
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