Press release from 18th Cabinet session

The Montenegrin Cabinet, at its 18th session held on 1 April 2021, chaired by Prime Minister Zdravko Krivokapić, adopted the Programme of Economic Reforms for Montenegro for the period 2021-2023 (PER 2021). The Programme is a document in which the Government presents the economic policy of Montenegro for 2021 and the medium term. It is the basis for economic dialogue with the European Commission in the process of EU integration. PER 2021 contains a medium-term macro-fiscal framework, accompanied by an agenda of 20 structural reforms, aligned with the priorities defined in national documents, national and regional strategies, key documents in Montenegro's EU accession process, European Commission guidelines and joint recommendations from the Brussels Ministerial Dialogue. The Programme contains three key chapters: 3 - Macroeconomic Framework, 4 - Fiscal Framework and 5 - Structural Reforms.

The projection of macroeconomic indicators for the period 2021-2023 is based on the assumption of partial recovery of economic activity, return to pre-crisis level and further economic growth, in line with partial maintenance of investment activity and the beginning of a new cycle, with significantly high growth of exports and private consumption. The average real economic growth rate in the period 2021-2023 will be 7.6%, with a strong recovery of 10.5% projected for 2021, while growth rates of 6.5% and 5,8% are projected for 2022 and 2023. The basic assumption of the scenario is based on the expectation that in the first half of 2021 the threat of infection is significantly reduced, while at the same time a certain herd immunity is acquired, with a large number of vaccinations, thus providing a basis for faster recovery and growth in 2021 and beyond. The most important assumption of the projected trends in 2021 refers to the income in tourism of 65% of the level in 2019.

The main goal of fiscal policy in the next medium term is to create conditions for a gradual recovery of public revenue collection in accordance with the projected growth of macroeconomic indicators and measures aimed at creating conditions for increasing public revenues through redefined tax policy, which, together with the reduction of discretionary spending and the reduction of allocations in the capital budget (caused by the completion of the construction of the priority section of the motorway) should lead to a balance of public finances in the medium term and a decrease in public debt from 2021 to 69.9% of GDP in 2023.

Chapter 5 of the Economic Reform Programme identifies in detail the obstacles to competitiveness, economic growth and development of Montenegro in the medium term. In that context, an adequate set of reform measures represents a special chapter in the Programme and is designed in such a way that, responding to the recommendations of the European Commission, it creates space for overcoming obstacles, but also has a preventive effect on their emergence in the medium and long term.

The structural reform agenda contains a set of 20 concrete and adequately positioned priority structural reforms in 8 areas: energy and transport; agriculture, industry and services; business environment and reduction of the informal economy; research, development and innovation and digital transformation; reforms related to economic integration; education and skills; employment and the labour market and social protection and inclusion, including health care.

The Cabinet adopted a Decree amending the Decree on a closer procedure for reading data from the fiscal memory of the cash register. The amendments specify the existing solutions which stipulate that, in order to read data from the fiscal memory of the cash register, the taxpayer submits the cash register to the authorised service within five days from introducing electronic records of sales and informs the administrative body responsible for tax collection. The Decree also stipulates that after reading the data from the fiscal memory of the cash register, the memory is destroyed, unless the authorised official of the Revenue Administration notices irregularities regarding the state of the fiscal memory of the cash register.

In accordance with the organisational and personnel changes in the Government, the Decision on amendments to the Decision on the formation of the Council for monitoring the implementation of the Judicial Reform Strategy 2019-2022 was adopted. The President of the Council is the Minister of Justice, Human and Minority Rights.

The Cabinet adopted a National plan for protection and rescue from landslide and rockfall. Protection and rescue includes a set of measures and actions taken to detect, prevent, mitigate and eliminate the consequences of natural disasters, technical and technological accidents, as well as major and other accidents that may endanger the population, material goods and the environment.

The National Plan contains, first of all, a chapter dedicated to landslide and rockfall risk assessment. Measures for protection and rescue from landslide and rockfall include a set of organisational and technical activities which, based on the time of implementation, can be grouped into preventive, operational and remedial protection measures. A very important chapter of this plan are the measures and activities that are obliged to be carried out by ministries, state administration bodies, local self-government units, academic and NGO communities in order to reduce the consequences that landslide and rockfall can cause.

Information on the amendmen 1 to financial agreements for 2014 and 2015, which refer to the IPA II Cross-border Cooperation Programme Montenegro - Albania 2014-2020 was adopted, as well as the IPA II Cross-Border Cooperation Programme Montenegro-Kosovo 2014-2020. The Cabinet accepted the proposed amendments to the financing agreements which, due to the COVID-19 pandemic, with the approval of the European Commission, extended the term of an agreement by one (1) year to ensure the completion of activities on approved projects.

The Cabinet adopted the Information on the need to employ persons who are qualified to work in the police, i.e. the status of persons who graduated from the Police Academy in Danilovgrad and completed training to work in the police according to a special programme, who are not employed. It was emphasised that there is a need for employment of these persons in the Police Directorate due to uninterrupted performance of tasks within the competence of the Police Administration, because currently 128 officers are employed on a temporary basis and 119 are hired under a contract, precisely due to lack of staff.

According to the Schengen Action Plan, the number of employees in the Border Police Sector is not sufficient and according to foreign experts should be increased by 500, in order to maintain border security at the required level, which has not yet been realised. On that occasion, the Cabinet instructed the Police Directorate to continue the implementation of activities aimed at employing these persons.

The Information on the implementation of activities based on the new organisation of the state administration was adopted. On that occasion, the competent ministries are in charge of carrying out the necessary legal and administrative procedures that will ensure the smooth functioning of the new model of state administration.

The Cbinet adopted the Information on the Draft Memorandum of Understanding between the Institute for the Execution of Criminal Sanctions and the German NGO "Help-Hilfe zur Selbsthilfe" and accepted the text of the Memorandum. The aim of signing the Memorandum of Understanding is to provide support in the implementation of strategic measure 2.2 of the Action Plan for the implementation of the Strategy for Execution of Criminal Sanctions 2017-2021, which increases number of work activities for prisoners within the prison system, and thus their more successful rehabilitation and reintegration through occupational therapy.

The Information on the preparation of the Proposal of the Fiscal Strategy of Montenegro 2021-2024 was adopted.  In accordance with the Law on Budget and Fiscal Responsibility, the Government's Fiscal Strategy represents the economic and development policy that the Government will implement during its mandate. It was pointed out that this is the first strategic document of the Government which will, formally, determine the strategic goal of economic policy, in order to improve the overall socio-economic situation in Montenegro with smart, sustainable and inclusive growth. In this context, the Cabinet also adopted the Decision on the formation of the Working Group for the preparation of the Proposal of the Fiscal Strategy of Montenegro 2021-2024.

The Cabinet adopted the rulebooks on the internal organisation and systematisation of the Ministry of Education, Science, Culture and Sports, the Ministry of Agriculture, Forestry and Water Management, as well as the Statistical Office.