The Chamber of Economy of Montenegro’s Board of the Association of Construction and Building Materials Industry called for an assessment of the Euro model before it is applied. The board and business representatives want its effects on operating costs, employment, prices and investment examined, as well as the pace of its implementation.
Some companies have raised the possibility of double-digit percentage increases in property prices. Business representatives warned that higher labour costs could also raise prices for products and services, affect investment and employment, and put further pressure on micro, small and medium-sized enterprises. They assessed that rising costs and prices would adversely affect citizens in Montenegro.
Mile Gujić, president of the board, said the model matters to the economy as a whole. He called for sector-specific simulations of its effects on profitability, liquidity, investment and competitiveness before implementation. The board also wants the combined impact on business costs, jobs, prices and the attractiveness of the business environment to investors assessed.
Wage costs and employment
The construction sector does not question the need for higher wages and better living standards for employees. It considers the timing of increases important to maintaining stable operations. Gujić said the model’s impact must be viewed through total business costs, sustainable employment and company competitiveness, rather than through the minimum wage alone.
An increase in the minimum wage could alter pay structures, Gujić warned, because employers would need to adjust other salaries to retain qualified staff. Participants identified a particular challenge for businesses employing both large numbers of workers with secondary-level qualifications and highly educated employees with licences and years of experience.
Business representatives said equalising minimum wages across jobs with different qualifications and responsibilities would require further pay adjustments. They warned that those costs could threaten the retention of existing staff and investment in training young workers. Gujić also identified the combined effects of labour costs, tax policy and other business burdens as a particular risk for micro, small and medium-sized enterprises.
Craft, micro and small businesses were described as especially exposed because they lack sufficient accumulated funds to absorb additional costs. Gujić said employers cannot realistically pass every extra labour cost on to customers or those commissioning work, particularly when prices are already at historic highs. Participants said companies must balance operating costs and competitiveness with the preservation of jobs.
Business representatives warned that reducing staff numbers while prices rise could result in significant layoffs and higher state spending on social protection. They also said a lack of information about all aspects of the Euro model makes it harder for companies to plan in time and assess the financial consequences.
Refunds and implementation
Gujić identified a separate cost arising from the way the state reimburses pregnancy and maternity leave. He said reimbursement is based on a historical average wage, while employers must pay the increased minimum wage, leaving companies to cover the difference. He called for compensation for mothers to be paid directly from state funds, removing that burden from employers entirely.
The discussion also raised new costs for engineering licences and questions about how higher wage costs could affect construction-material and service prices, property prices and property tax. Business representatives called for open dialogue among businesses, the Chamber of Economy of Montenegro and government representatives. They asked that a delay to the model’s implementation be considered while its consequences and possible solutions are examined.
Participants concluded that the measures’ full effects on the economy, employees and citizens should be assessed before full implementation, including the effect of changes to the business environment on attracting foreign investment. One point made during the discussion was: “What cannot survive on paper cannot survive in reality.” Gujić said sustainable wage growth requires construction companies able to support it over the long term.
