Finance Minister Novica Vuković said that the financial situation in Montenegro is stable and favorable, characterized by macroeconomic stability and continuous growth in revenue collection, and that the surplus in the state treasury in the first nine months was 85 million euros.
He said this in response to a question from Democrat MP Zdenka Popović, who asked about the status of public finances after the start of the Europe Now 2 program, but also about measures to maintain the level of inflation.
"The current financial situation in Montenegro is stable and favorable, and it is dominantly characterized by macroeconomic stability and continuous growth in the collection of current revenues, with a nine-month surplus of 85 million euros, or 1,2 GDP. In all years of the projection, a surplus is realized current budget spending, which means that the state finances all its current obligations from current revenues, that is, borrowing is done exclusively for the realization of capital projects. The increase in minimum wages and pensions will not be financed from debt, and I indicate that there will be no increase in the VAT rate ", Vuković emphasized.
He explained that according to the preliminary results, in nine months the revenues to the budget were collected in the amount of 2,07 billion euros, which is 2023 million euros more than in the same period in 170. He emphasized that a positive trend was recorded in the collection of value added tax, profit of legal entities, income of natural persons, contributions, excise...
Vuković added that inflation is easing in Montenegro, as well as in the European Union.
"We still have citizens who received 450 euros through legal channels, and the amount up to 600 and 800 euros in hand. In this way, the degree of possibility to make their creditworthiness in banks more credible is ensured, so that they can achieve rights that they could not with minimal earnings , so we cannot talk about the impact on inflation by the changes themselves," Vuković pointed out.
Budva breaks records
Vuković also said that a total of 1.771 employees work in the Municipality of Budva, institutions and their companies. He emphasized that this municipality can hire at its own discretion, because it is not in the tax debt reprogram, so the finance department cannot influence personnel policy.
"Budva, in municipal bodies, public institutions and companies founded by the municipality, the total number of permanent employees as of September 30 of this year is 1.314, 152 for a fixed period, 151 persons are engaged under temporary and occasional work contracts, under work contracts 39 and 115 persons were hired through the Agency for the transfer of employees. The total number of employees according to the mentioned bases is 1.771", explained Vuković.
He was asked about this by the deputy of the Democratic Party of Socialists (DPS), Nikola Milović, who added that according to the same ratio, 15.000 people should work in Podgorica, 4.500 in Bar, or 5.000 in Nikšić...
"The municipality of Budva is the record holder in terms of the number of employees and let 1.771 people work, but the results should be the best service available to everyone, the best culture, sports results, communal... When you add it all up, it costs 10 million euros for a year, it is set the question of where this city is headed. And because of that, we shouldn't be surprised that it was such a tourist season, and the city was dirty," Milović said.
He also asked about income from tourism compared to last year, as well as what the Ministry's estimates are about the impact of the increase in VAT income, which will be 15 percent for restaurateurs in this sector from January.
Vuković stated that according to data from the Central Bank, tourism revenues in the period April - June amount to 340,1 million euros, which, he said, is a growth of 1,9 percent compared to the same period in 2023.
"The latest Monstat data on overnight stays in nine months show a growth of 1,6 percent. This indicates satisfactory results, but it will be more complete when the data for the third quarter (July, August, September) is published," he emphasized and pointed out that will be available in the second half of November.
He emphasized that with these steps, the VAT rate for lodging is equalized, so there will be no discrimination on that basis. He also claims that the tax system of Montenegro is the most favorable in all of Europe, and that he believes that the next season will show this and that the measure has brought a fiscal effect.
Milović added that according to the plan, this rate of 15 percent will contribute 60 million euros to the budget, and that everything was done too quickly, in order to find money for the Europe Now 2 program.
"My expectation, considering that one part of the arrangement has already been sold at the old prices, is either the loss of those engaged in tourism activities or an increase in prices," said Milović and added that this increase must surely affect the results and increase in prices in tourism.
One billion euros is needed for debts
Vuković said that in the next year, Montenegro will need one billion euros to pay off old debts.
Miloš Konatar, a member of the Citizens' Movement URA, asked him about his current debt, and Vuković stated that the largest part relates to the payment of debts based on the Eurobond issue of 500 million, as well as other individual debts.
Konatar stated that he was worried that the fiscal strategy predicted that the public debt would increase by one billion euros by 2027, that the cancellation of part of the contribution to the Pension and Disability Insurance Fund brought a deficit of 200 million euros, and 400 million euros the following year. As he said, it is worrying to get into a vicious cycle of borrowing.
Vuković emphasized that he regrets every victim these days in Montenegro, that the public debt is 4,4 billion euros, or 61,33 percent of GDP, but that taking into account the deposits of that department, the net public debt was 3,8, 52,84 billion, which is XNUMX percent of GDP.
"When my mandate began, I found a worrying situation in the budget, when we had a total of 155 million euros in the account, while the missing amount by the end of 2023 was over 250 million, and the deficit was 173 million euros and the debt repayment was 79 million euros. This situation necessitated an urgent need for debt, at that time we provided 159 million euros on the domestic market and on more favorable terms. The amount of 159 million was secured through loans with commercial banks at a weighted interest rate of 6,55 percent per year, with a maturity of 54 months. The amount of EUR 50 million was secured through government bonds at an average weighted interest rate of 3,7 percent," he stated and added that they serviced all obligations and ended the year with a deposit of EUR 80 million.
He explained that until now, i.e. until October 31, they have serviced about 500 million euros of obligations, repayment of all government bills from December 2023, domestic bonds from 2019 in the amount of 92 million, syndicated loans, as well as a loan from Deutsche Bank. .
"The law on the budget for this year defines that the state can borrow up to 650 million euros to provide the missing funds and half a billion for the needs of debt refinancing and the formation of a fiscal reserve for the next year. In the previous year of the Government's work, the state's total indebtedness amounted to 846,76 million euros, settled debt obligations amounted to about 654 million euros, while the balance of deposits was 600 million euros, which indicates that we have serviced a large part of our obligations from regular revenues and created fiscal reserve, for obligations based on debt repayment in the following period," Vuković pointed out.
He emphasized that debt does not mean failure, but obligations must be met and fiscal reserves must be created. Vuković added that they adhere to the principle of servicing maturing obligations and responsibilities for the development of capital investments.
"We are also trying to publish retail bonds and we will publish some amount, we are also in negotiations with the market, so also when we talk about commercial banks. We want to spread the risk and create a source of financing on the domestic market, we don't want to have a situation like at the beginning of this year, when Montenegro appeared in front of investors and when they asked us - excuse me, what did you want? We don't know who you are and you are not on the capital market," he said.
He stated that this year's issued bonds are being traded, and that the next interest rate will be lower.
Konatar pointed out that someone will have to return the money, and that they will continue to discuss this topic until the end of the year.
In 2025, they will settle the land and documents for the cable car
URA MP Filip Adžić asked about the continuation of the construction of the Kotor-Cetinje cable car, but he emphasized that he was not satisfied with Vuković's answer, which was delivered to him in writing.
He also requested that Vuković try to make Prime Minister Milojko Spajić more serious, because these days citizens are being poisoned at workplaces, bullets in street shootings end up in the cars of passers-by, citizens are locked in their houses...
Democrat MP Duško Stijepović reacted to these allegations and said that these were questions for the Minister of Internal Affairs, Danilo Saranović, so the session was paused for five minutes after a short discussion.
After the continuation, Vuković explained that the final station of the cable car will be in Cetinje near the summer stage, that the total value of this 11-kilometer route is 58 million euros, and that this does not include the expropriation of about 15 percent of the land.
"In the proposal of the Law on the budget for 2025, for the cable car construction project, money will be planned for the settlement of property-legal relations and the completion of technical documentation, in order to create all the necessary conditions for the unhindered publication of a public announcement for the execution of works," Vuković explained. and added that Cetinje is at the top of the municipalities in terms of allocation per capita from the capital budget.
Adžić said that he believes that with the money that Prijestonica receives, and if this is the only project that is being worked on, it would take ten years again.
"Which clearly shows that the cable car project cannot be realized in this way," Adžić said.
Vuković stated that the Capital has a large number of projects, but also that they are working on solving the problems there.
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