German Finance Minister Schäuble praises Montenegro's efforts towards fiscal consolidation

Berlin, Montenegro (16 January 2014) -- Montenegro's Finance Minister Radoje Žugić met Wednesday in Berlin with his German counterpart Wolfgang Schäuble.

Minister Žugić informed the German Minister about the Montenegrin Government’s efforts towards fiscal adjustment and effects of the implemented measures (increase of collected revenues and improved basic fiscal parameters), as well as about upcoming activities in the field of fiscal consolidation on a consistent basis and creation of preconditions for achieving stronger economic growth rates. The Government of Montenegro, in Minister Žugić’s words, is also committed to carrying out structural reforms and strengthening the rule of law.

Minister Schäuble welcomed Montenegro's efforts in terms of improvement of public finances and stabilisation of the banking sector, as well as strengthening its fiscal and financial position, which will speed up the country's EU integration process.

Montenegro, as a small and open economy, requires high growth rates, the German Minister underlined, adding that the use of the euro is a good decision of the Montenegrin monetary authorities. He said that Montenegro is very well prepared for the opening of the key chapters, adding that progress in the accession negotiations is an important prerequisite for further dynamic economic development.

Minister Schaeuble said that macroeconomic stability of EU member states and candidate countries is crucial for Germany. In that regard, he praised the efforts of Montenegro’s Finance Ministry in terms implementing measures that should contribute to a higher degree of sustainability of the country’s public finances.

During his stay in Berlin, Finance Minister Žugić also met with President of the German Savings Banks (Sparkasse); Chief Executive Officer of Deutsche Bank for Central and Eastern Europe Peter Tulsi, and the KfW Director for Southeast Europe and Turkey Christoph Tiskens.

Finance Minister Žugić and President of the German Savings Banks (Sparkasse) discussed specific modalities for initiating cooperation. They emphasised openness and readiness to establish cooperation based on savings banks development models, through transfer of knowledge and experience (know how) or direct engagement in Montenegro. In that regard, it was agreed to continue communication and cooperation with the Foundation for International Cooperation of the Sparkasse.

The meeting between Chief Executive Officer of the Deutsche Bank for Central and Eastern Europe and Minister Žugić discussed plans for Eurobond issue, as well as activities related to the provision of funding for the state budget for the current year. Both sides agreed that the meeting is a continuation of good dialogue between Montenegro’s Finance Ministry and the Deutsche Bank, and expressed readiness for further cooperation through the Deutsche Bank’s services of as an arranger bank and conclusion of commercial contracts. It was agreed that, in line with developments in the financial markets, the Deutsche Bank will further explore the needs of the Ministry of Finance and recommend appropriate time to restructure public debt.

KfW Director for Southeast Europe and Turkey Christoph Tiskens expressed willingness to continue cooperation with the Government of Montenegro in specific areas and projects of mutual interest. Minister Žugić emphasised that the German Development Bank is an important partner of the Government of Montenegro in financing and implementing a number of projects, primarily in the areas of municipal infrastructure and energy, as well as in the banking sector. The KfW’s representative voiced interest in further enhancing cooperation with Montenegro, through funding projects that will contribute to improving living conditions in Montenegro, as well as regional integration of the South-East Europe.

Finance Minister Radoje Žugić’s visit to Germany was a good opportunity to inform partners in the German government and institutions about the results and current activities of the Montenegrin government in terms of fiscal and macroeconomic policies. The visit marked additional impetus to boosting financial cooperation between the two countries, while the German side pledged support for the efforts the Government of Montenegro has been making in terms of economic consolidation and EU accession negotiations.