There will be no reduction in pensions, but an increase in them, and that is solely thanks to the projected increase in average earnings, the Ministry of Finance announced, on the occasion of yesterday's round table on the Fiscal Strategy of Montenegro.
They state that all participants in the discussion received answers to the findings, "including those who did not wait for them", and that everything was specified.
They say that the increase in the minimum and average salary and, consequently, the increase in pensions is "only one of ten" measures planned by the Fiscal Strategy, as well as that all measures are aimed at increasing the standards of citizens, but also improving the business environment and the competitiveness of the economy.
"The tax reform, which implies a reduction in contributions for pension and disability insurance, which will cost 180 - 200 million euros - is absolutely sustainable and fiscally neutral, because it will be financed from a series of countermeasures foreseen in the Fiscal Strategy, which will enable the growth of revenues, which in the conservative scenario amount to 240 million euros. So, significantly more than necessary for the financing of this reform, which means that there is no 'hole' in the PIO Fund, but stable financing is provided," the announcement states.
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The Ministry of Finance points out that the Fiscal Strategy does not foresee an increase in general rates: VAT, income tax, profit tax and the like.
They say that the department, following a "cautious approach to income planning in the medium term", did not calculate the income from the legalization of illegally built buildings, confiscation of illegally acquired property and the like, "and what is expected" in compensatory measures.
"The two minimum wages of 600 euros and 800 euros (average 700 euros), depending on the professional qualification of the employee, are the result of the demands of representative representatives of employers within the framework of the mandatory social dialogue that was conducted on the topic of this reform. This led to the optimal model that enables the growth of wages of all employees, not only those employed in the public sector, which we have had the opportunity to witness. This reform is therefore inclusive and positive - for employees and pensioners, as well as for employers, while preserving full macroeconomic and fiscal stability." in the announcement.
"In part of the expressed doubts about the financing of the pension system, once again, for the sake of the citizens, we note that the increase in the minimum and average salary and pension does not require the reform of the Pension and Disability Insurance Fund or the introduction of another pension pillar. All pensions, as before, will be financed exclusively through the Fund PIO. There will be no reduction in pensions, but an increase in them, and that is solely thanks to the projected increase in average earnings," said the finance department.
They also say that all the reforms foreseen in the Fiscal Strategy for the period 2024 - 2027 are fiscally sustainable, and that this is evidenced by the surplus of current budget spending projected for the period 2024 - 2027.
"This means that the 'golden rule' is satisfied that the state finances all current liabilities from current revenues, and Montenegro becomes the country with the lowest labor costs in Europe," the announcement reads.
They also say that the stability of public finances is a priority of the Ministry of Finance,
"This is proven by the achieved results this year: the budget surplus for the period from January to the end of June; budget revenues higher than planned in the period January - June 2024 by 78 million euros; there is no debt for this reform, as there was no increase in the minimum pension in January this year. The loans will be used exclusively for the repayment of old debts and the financing of capital projects; the recorded real GDP growth rate of 4,4 percent is one of the highest in Europe so far at 11,9 percent", they conclude.
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