Economic 100 days of the government: The government started with a deficit of 146 million

In December, a record deficit of the state treasury was achieved. The government spent all 159 million for which it borrowed. The announcement on the increase of the minimum pension was fulfilled, the gray list was avoided, the procedure for the continuation of the construction of the highway was initiated...

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The public is worried about the possible cancellation of contributions for PIO: From the Government session, Photo: Government of Montenegro
The public is worried about the possible cancellation of contributions for PIO: From the Government session, Photo: Government of Montenegro
Disclaimer: The translations are mostly done through AI translator and might not be 100% accurate.

The rule of the new prime minister Milojko Spajić it started with a record monthly deficit of 146 million euros in December and a total missing amount of money in the state coffers of 172 million.

This information, published in the budget execution report, marks the 100 days of the Government's work so far. Although the prime minister announced that his goals would be to balance the budget, that current revenues cover current expenditures, and that he would borrow only to repay old loans and for capital projects, in this second month of his reign, the opposite happened.

Representatives of the opposition and trade unions told "Vijesti" that as a result of the Government's work in the first hundred days, they support the pension increase, that they are worried about new liabilities due to secrecy and the announcement of the abolition or reduction of pension contributions. "Vijesti" expects an answer from the Government to the questions of what, in their opinion, was done from an economic point of view in one hundred days of work.

According to the published report on the execution of the budget for December, this deficit in the treasury of 172 million was covered by the fact that in December the Government spent all 159 million for which it borrowed from domestic banks and by issuing notes. Earlier, the Ministry of Finance announced that "between 50 and 100 million of this debt will go to the budget for 2023, and the rest for 2024, as a fiscal reserve".

To cover the deficit in December, as stated in the report, an additional foreign loan of 28,7 million euros was spent, as well as 17,9 million euros from the inherited deposit.

"Vijesti" asked the Ministry of Finance why such a large deficit occurred, what caused the drastic increase in most expenditures, as well as whether they have preliminary data on whether the deficit will continue in January, but they did not receive an answer.

Expenses are growing faster than income

According to the report, the deficit occurred because budget expenditures in this month amounted to 400 million, instead of the planned 237 million. So the expenses increased by 163 million, and the income by only 27 million.

Spending on most items was well above the plan. Current expenses cost 112 million instead of the planned 163 million. Expenditures for materials amounted to 3,8 million instead of 11,5, costs for services increased from 5,8 to 16,5 million, current maintenance cost 3,2 million instead of 8,4, for subsidies it was 4,8 instead of the planned spent 21,7 million, for other expenses 10,6 instead of 4,2 million,...

Expenditures for transfers to institutions, individuals, non-governmental and public sectors were planned at 30,7 million euros, and in the end amounted to 71 million, while 79 million were paid for capital expenditures instead of the planned 20,7 million.

Illustration
Illustrationphoto: Shutterstock

So the total deficit amounted to 146,4, while the plan was for it to amount to only 10,3 million euros. In December, a part of the old loans of 24,9 million euros was returned, instead of the planned 22,2 million, so that the total missing funds in this month amounted to 172,2 million euros. According to the plan, only 32 million euros should have been missing, which would have been covered from deposits without new debts.

The Ministry of Finance did not even answer the question of "Vijesti" whether there are preliminary data on the revenues and expenditures of the budget for January, whether there was a surplus or a new deficit in it, as well as whether the functioning of the state coffers will soon require a new debt of the state .

Pension growth

In the first 100 days of its existence, the government was most proud of the decision to increase the minimum pension limit from 296 to 450 euros. The payment of the first increased pension should start in ten days, which will increase the household budget for about 70 pensioners whose incomes are lower than 450 euros.

This increase will require an additional 150 million or ten million per month. The impact of the growth of that item will be seen for the first time in the monthly budget report for February, which the Ministry of Finance will publish at the end of March.

Increasing the limit of the minimum pension is the first pre-election promise of the "Europe Now" movement, and by the end of the year it remains to achieve a minimum salary of 700 euros, an average of 1.000 euros and "full employment". The "Europe Now 2" program, which foresees this, has not yet been published.

Avoided "greylist"

The government cited preventing Montenegro from being placed on the gray list of Manival, an international organization for the prevention of money laundering, as its major success so far. As explained, the inclusion of Montenegro on this list would make its international position more difficult, reduce the interest of investors and make it more difficult to lend. This was prevented by the fact that the Government proposed changes to the Law on Prevention of Money Laundering and Financing of Terrorism and amendments to the Criminal Code, which were immediately adopted by the Parliament, and Spajić attended the session of this organization.

"The extraordinary efforts of the Government of Montenegro and the special team that worked day and night, with the support of the parliament, were crucial to fulfill the requirements and avoid a big problem for the economy, but also for our reputation. We bring great news from Strasbourg, thank you to everyone who made an immeasurable contribution to the completion of such a serious job in record time", said Spajić at the time.

Spajic
Spajicphoto: Private archive

Announcements of highway construction

It is a brave decision of the Government to start the construction of a new section of the highway from Mateševo ​​to Andrijevica this year with 90 million euros, most of which have been earned in the past years from economic citizenship, as well as to start the design of the remaining sections. Spajić recently said that the construction of both highways through Montenegro and four expressways will be completed by 2030.

Illustration
Illustrationphoto: Shutterstock

He subsequently said that these projects would cost six to eight billion euros.

"And that financing is feasible, it is not a problem to borrow for the capital budget. We should not shy away from borrowing for investments, we just need to make sure that the current budget does not reach a deficit," said the Prime Minister recently.

Possible strikes

A significant problem for the Government is that four large unions from the state administration have requested an increase in wages and announced strikes if this does not happen. Unions of state administration and justice, health, education and police, which number about 50 thousand workers, are demanding higher salaries. According to an earlier calculation by the Ministry of Finance, about 70 million euros would be needed annually to increase these salaries.

Spajić said that these salary increases are not realistic now, and that we should wait.

"All citizens of Montenegro can expect a bright 2024. There is no need for haste, for threats, for blackmail. I think that the Government is focused on the interests of all citizens, educators are key," Spajić said.

They plan to limit margins

In November and December last year, Monstat recorded a drop in prices on a monthly basis, i.e. the appearance of deflation. Representatives of the previous government boasted that this was the result of their "Stop Inflation" campaign. The new Minister of Economic Development, in whose portfolio is also the field of trade, Nick Djelosaj said that the action will not be continued in that form, but that he will monitor the margins in the stores every day.

"The moment we see illogicalities and an attempt to increase margins, the Government will react and put a limit on margins. We plan to preempt them and to start limiting the margins on a certain number of products," said Đeljošaj, stating that measures cannot be adopted without a detailed analysis.

He announced that they are considering limiting margins on homemade cheese, bottled water, yogurt, eggs, potatoes, milk...

Đurović: The concrete measures of the Government are still unclear

Former Minister of Economic Development and Tourism and official of the Civic Movement "URA" Goran Đurović he welcomed the increase in minimum pensions, but emphasized that a proportional increase was also needed for other pensioners. He pointed out that other matters cannot be talked about concretely because the public does not know what the intentions are and how the "Europe Now 2" program will be implemented, which, as he said, is the heart of the new government.

He emphasized that the great dissatisfaction of the education, health and state administration unions is noticeable and that the Government has set expectations that it cannot fulfill. He also asked why there is nothing from the announced increase in minimum wages, why the unions have to strike, why everything is being extended until the end of the third quarter and what will happen, so that higher wages can be paid then. Đurović added that he could not praise it because plans for salary correction should already be discussed, so that the economy and citizens could comment and give their opinion.

Đurović
Đurovićphoto: TV Vijesti

He emphasized that there are no concrete steps in the fight against inflation and that apart from the announcements, there have been no announcements of measures that will be implemented or are being planned.

"We believe that this program (Europe now 2) generally does not exist, but that it is done somewhat ad hoc from case to case, and we are concerned about the state of the budget in the coming period. The main objection is that there are a lot of announcements, of which there is nothing so far," said Đurović to "Vijesta.

Nenezić: Discrimination of educators, medics,...

Member of the SD Branislav Nenezić he stated that economic issues with concrete measures, visible projects and measurable results should be the backbone of the actions of any Government, already after 100 days. He added that all of this is missing and that they are worried about the continuation of secrecy, i.e. that the Government does not inform citizens about its moves, even though it is directly in charge of them. After, as he said, the secret debt of 750 million euros from 2020, Spajić also secretly owed the state 159 million euros.

"Inflationary pressure is still strong, the wind at its back is given by debts like this, and measures that would amortize it are not even in sight because our economic experts who sit in the government do not seem to have the capacity for such a thing. Since the launch of the capital projects, we have had nothing for four years now, in these 100 days we have only received a joke from Spajić (we hope it will remain so) about the "puff puff" tenders that lead to the "shovel" in September, even though the public discussion on the Spatial Plan "It just started," he said.

Nenezic
Nenezicphoto: SO Bar

He added that the attitude towards part of the pensioners, educators, medics and trade unions is discriminatory, but also that the message is for everyone who wants a serious and strong state. He pointed out that there is no money for the supporting pillars of society and that there will not be any, because the previous prime minister, who wanted to arrest the current one, promised it to a part of it. He claims that Spajić should know that the education union may not have the shovel he is planning, but he has a "pencil" on which the future of children depends.

Nenezić emphasized that they are not happy about the economic fiasco, but that they are concerned about the superficiality and lack of interest of the current government, and that it is a school example of an alienated government, which lives in a parallel dimension where there is no place for the ordinary citizen and his needs.

USS: Support for the "Europe Now 2" program, they worry about the contribution to PIO

The Union of Free Trade Unions (USS) had a meeting with Prime Minister Spajić after the formation of the 44th Government, during which he was handed a platform with expectations and six resolutions adopted by the Congress of the Union.

As the Secretary General of the USS said Srđa Keković they asked to have quarterly meetings as social partners, to consider the introduction of the initiatives they proposed. He added that they have not received any feedback on this issue to date.

Keković
Kekovićphoto: Luka Zeković

On the other hand, he pointed out that they support the "Europe Now 2" program, but that they do not yet have a clear picture of how that program will be implemented. He emphasized that if the program is based on the abolition of pension and disability insurance (PIO) contributions, USS will consider that issue separately.

"We will advocate that the collapse of the current pension system in Montenegro is not allowed in any way, and the abolition of pension contributions, according to the available analyzes of numerous economic analysts, represents for now the greatest threat to the collapse of that system," Keković pointed out.

Among the positive moves, Keković stated that the Ministry of Labor and Social Welfare agreed to return to the Labor Law the norm according to which employees in the real sector end their employment by force of law at the age of 67, as is currently defined for civil servants and state employees. .

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