Employers' Union: The situation in the economy is dramatic and the new measures would not be able to withstand

President of the Union of Employers of Montenegro (UPCG), Predrag Mitrović, said that the current situation in the Montenegrin economy is dramatic.

"The Montenegrin economy would not be able to withstand the new sanctions, which would be like a lockdown. Some 90 to 95 percent of the companies would not be able to withstand the new measures," Mitrović said at today's press conference entitled Response to the Covid-19 crisis: Challenges needs and expectations of Montenegrin companies.

He emphasized the lack of optimism, that is, that there is no initiative among young people. Mitrović said that another unsuccessful season would have major consequences for many companies.

"Economic activity has been reduced to a very low level and it is currently declining. If the tourist season is not at least 70% higher than before, it will be a worrying situation and will lead to additional layoffs. Businesses have somehow survived , but I can only do that for a few more months," Mitrović said.

He said that they function like a system of blood vessels.

"Employers-Government-union, we need to act together," he stated.

He addressed, as he said, the two most important requests to the Government in order to overcome the crisis.

"These are VAT delays and reductions in taxes and contributions," Mitrović said.

He warned the government about the speed and the decision-making process and added that the previous and new governments made great efforts to help the economy, but that it was clearly not enough.

He also demanded the immediate elimination of all business barriers, above all corruption, and called for social partners to return to the negotiating table.

Radulović: We are in favor of abolishing the non-working Sunday

The General Secretary of the UPCG Suzana Radulović explained that in the adoption of the package of measures to help the economy, which were created by the previous government, they were not or only partially included, while in the creation of the last set of measures they were included much more.

"We had two meetings with the Minister of Economic Development, Jakov Milatović, and the Prime Minister was also present at some of the meetings, which is completely new. Many of our requests, which were created in accordance with the needs of the companies we talked with, ended up being among the measures." said Radulović.

She explained that the abolition of the non-working Sunday should also be considered in the circumstances of the pandemic, and stated that especially during the summer season, the economy records large losses due to this.

90 percent of companies recorded a drop in income, 70 percent of them were dissatisfied with the support measures

Radivoje Drobnjak, an expert on the UPCG and International Labor Organization (ILO) project, presented the results of research that show that the incomes of companies have been dramatically affected and that 90 percent of them recorded a decrease compared to the same period last year, and that the average decrease in income, for all surveyed companies, amounted to 47 percent.

He particularly pointed out that all surveyed companies in the hospitality sector (HoReCA sector) and the transport sector reported a drop in income.

"Over 40 percent of companies anticipate a full recovery, and almost one third need to implement additional cost reduction measures in order to complete the recovery," said Drobnjak.

He said that the results of the survey show that 41 percent of companies believe that the recovery after the end of the pandemic will last between 6 and 12 months, and that even 45% of them will take more than a year, which, as stated by Drobnjak, is the best indicator of how expensive the new lockdown would be. the economy.

"78 percent of companies need additional measures of economic support in order to be able to maintain their operations," said Drobnjak.

Drobnjak said that government support did not meet the needs of almost 70 percent of companies and explained that this refers to the first three aid packages for the economy.

"28 percent of them consider the measures of the aid package to be completely inadequate or insufficient, and over 40 percent of companies think that they could have been better," said Drobnjak.

Research data shows that layoffs were one of the least used cost-cutting measures undertaken by companies. 24 percent of them anticipate layoffs in the coming period, which is especially pronounced in small businesses and the hospitality sector.

Based on the findings of the research, Drobnjak presented the proposals of the UPCG, with the aim of supporting the Government in planning a new set of economic measures.

"Continue to subsidize wages, provide additional financial support to companies, continue to postpone payments and reduce taxes, improve labor legislation and provide the appropriate infrastructure and regulatory framework for the application of digital technology," said Drobnjak.

The survey of the UPCG with the technical assistance of the ILO was conducted in the period October - November 2020, on a sample of 312 companies (micro, small, medium and large) from all over Montenegro.