Newsletter 1/2010 - Our South East Europe

A STATESMAN'S VIEW: Interview with Milo Đukanović, Prime Minister of Montenegro

“Cooperation among the countries of the region in all areas is the only right response for its future”

Mr Đukanović, how do you comment on the level of cooperation in the region bearing in mind that the countries are in different phases when it comes to EU integration? Where do you see the role of the Regional Cooperation Council (RCC) in this respect?

The future of the countries from the region is the EU; there is no alternative to this. Neither the countries from the region nor the European Union question this fact. The memories of conflicts that took place in this region are still vivid. I believe that the justification basis for this perspective should be found precisely in that fact. Integration is the only reliable guarantor of stability and prosperity of Western Balkan countries.

The efforts of each country should not be neglected in this regard. Each country should enter the European Union in line with its own merits, i.e. when it fulfills the conditions.

In addition to the overall reforms, which Montenegro is working on dedicatedly, an important segment of the European path is mutual cooperation.

Through a policy of good neighbourly relations and active participation in all important regional initiatives, Montenegro demonstrated a responsible approach to the region’s development and is thus recognized internationally as a factor of peace and stability on the Balkans and a constructive partner of international community in the efforts to achieve lasting political stability as well as prosperity of the region in which we live. 

Bearing in mind the importance of regional cooperation in the EU association process, I would like to welcome the decision of the Government of the Republic of Croatia to give to its neighbours the relevant documents translated into Croatian. This symbolic gesture of the Croatian Government represents a significant contribution to EU approximation of the entire region and will surely reduce costs and save time thus facilitating the job of our administration.

Establishment of the Regional Cooperation Council as a new framework for regional cooperation is certainly a positive step forward of the countries from the region aimed at ensuring future progress of South East Europe. Its role is to support and strengthen cooperation among countries of the region in the areas of economic and social development, infrastructure and energy, justice and home affairs, security cooperation, building human capital and parliamentary cooperation.

Montenegro has signed and ratified the Agreement establishing the Regional Cooperation Council Secretariat located in Sarajevo and fully participates in all Council’s initiatives and activities.

When do you expect Montenegro to obtain the status of a candidate for EU membership and what do you intend to do in order for your country to become an EU member as soon as possible?

During 2009, Montenegro made big steps on the path of European and Euro-Atlantic integration: submitting responses to the European Commission (EC) Questionnaire, participating in NATO’s Membership Action Plan (MAP) and perhaps the most important thing for our citizens – lifting of visa regime with the Schengen countries. 

Dynamism of European integration process goes as planned. After submission of the responses to the EC Questionnaire in December 2009, we received additional inquiries from the EC to which we will promptly provide responses. Meetings with EC working bodies are being held on regular basis in Brussels.

I would like to remind that an EC mission for human rights visited Montenegro in mid-February this year, within the so-called consultative process which follows after the submission of responses to the EC Questionnaire; followed by an EC mission for monitoring prevention of money laundering and terrorism financing, and an EC mission in the area of justice and home affairs.

Montenegro expects positive opinion of the EC in autumn and obtaining the candidate status by the end of 2010. To this aim, we will continue adopting the EU rules, practices, regulations and standards in the forthcoming period, primarily for the purpose of improving our citizen’s quality of living. We will continue implementing the ongoing reforms, enacting and fully enforcing the laws, harmonising domestic regulations with the EU acquis communautaire and strengthening administrative capacities. I would say that we are working hard to readily welcome Europe and vice versa.

As of December 2009, Montenegro is participating in NATO’s MAP. What are the next steps towards the full NATO membership and when do you think it could happen?

By entering the Membership Action Plan (MAP), Montenegro received recognition for reforms achieved in this regard but, it has also committed itself to a more intensive and concrete form of cooperation with NATO, primarily through development of Annual National Programmes (ANP) – reports on their implementation.

The plan is, after establishing the National Team for ANP Development, to complete the development of the first ANP and present it to NATO by September 2010, when its one-year implementation begins. The fact that MAP assisted nine countries thus far to become members of NATO speaks sufficiently of its importance. I wish to remind you that development of the Annual National Programme and the Progress Report is performed in coordination with NATO.

NATO membership, in parallel with progress towards the EU, will give this region the necessary stability. Almost all Western Balkan countries seem to be aware of this. We expect that BiH joins us in MAP soon and then, in line with the fulfillment of obligations undertaken, that we become full NATO members. 

To what extent did the global economic and financial crisis have impact on the situation in Montenegro and how do you see the way out of the crisis? Is strengthening regional cooperation a possible answer?

Global economic crisis did not bypass Montenegro. It had an impact on decrease of loan activities, economy, production, investments, etc. Sectors particularly affected in Montenegro are industry, construction, tourism and banking, as is the fate of other world economies as well.

The Montenegrin Government responded to the crisis in a way an efficient state should respond, quickly and timely, in three directions. Assistance was first directed to the banking sector – as, in fact, the crisis in Montenegro began with this sector – economy and citizens.

The overall package of measures of fiscal, monetary and social policy for overcoming the financial crisis amounted approximately to 10% of the GDP. Through government guarantees, we have provided almost 7% of the GDP as support to the banking sector and economy, which is above the average of other European countries.

The crisis also required certain fiscal adjustments as well as stabilisation of public finances. The Montenegrin Government has a prudent and conservative public finance policy. We have reduced public spending (by approximately EUR 230 million) in the previous period, increased capital investments and planned the 2010 budget realistically. 

In 2010, we expect a slight growth of economy by around 0.5% of the GDP and believe that this year would be a kind of preparation for the economic recovery as of 2012.

Having in mind that the overall economic ambience in Montenegro will be largely dependent on the global economic developments in the years to come, the Montenegrin Government adjusted its fiscal, economic and monetary policy to mitigating the effects of the crisis blow and further restructuring of the system. The crisis has identified potential threats to our economy, thus, we have focused on development of small and medium-size enterprises and are at the same time optimising our large industrial systems. Above all, our priority is to improve business climate while eliminating business barriers, and stimulate entrepreneurship, having in mind that after all the events at the time of a crisis, an environment attractive to investors and new businesses should be nourished.

Our region is potentially the only one in Europe with opportunities for accelerated development with the economic growth rates significantly surpassing the European average; and for that reason these opportunities have to be seized. Thus, it seems essential to me to accelerate the activities on creating conditions to commence construction of Adriatic-Ionian highway, i.e. its section through Montenegro, Bosnia and Herzegovina and Albania. In this sense, launching joint tender procedures should be taken into consideration to motivate large number of investors and also serve as a sort of pressure on the EC to grant use of structural funds for this purpose.  

Italy is planning a construction of underwater power line of 1000 MW capacity that would connect it with Montenegro and provide energy link between the south of Italy and the South East European countries. What importance would this project have for Montenegro and the entire region?

This project positions Montenegro as an important European energy hub and seat of last year announced auction office for sale of surplus electrical energy.

The project is the crowning feature of thus far cooperation between Italy and Montenegro and through direct link with the EU electrical energy market, it will make Montenegro an important transit route, with large economic effects. It is also a strong stimulus for investors in the area of energy not only for Montenegro but for the entire region. 

According to the preliminary agreement, the cable will be placed between Tivat and Peskara and the contractor will be Italian company ‘Terna’ in cooperation with Montenegrin ‘Prenos’.

Together with ‘Terna’, ‘Prenos’ will finance construction of power line towards Serbia and BiH so as to form an energy ring around Montenegro which would fully stabilise the local network.

As you can see, cooperation among the countries of the region in all areas is the only right response for its future.

Milo Đukanovic is currently serving his fifth term as Prime Minister of Montenegro (first since Montenegro gained independence in 2006). At the age of 29, he was the youngest European Prime Minister when he first time took office in 1991. In 1998-2002, he also served as President of Montenegro.


Prime Minister of Montenegro, Milo Đukanović, at a public lecture in Sarajevo, Bosnia and Herzegovina, 23 February 2010. (Photo RCC/Željko Smola)

Prime Minister of Montenegro, Milo Đukanović, at a public lecture in Sarajevo, Bosnia and Herzegovina, 23 February 2010. (Photo RCC/Željko Smola)