The Chamber of Economy of Montenegro (PKCG) has publicly urged Prime Minister Milojko Spajić to meet business representatives about the Euro model, warning that simulations by businesses point to possible risks for competitiveness, investment and jobs. The request comes 44 days after the wage-increase model was announced; PKCG first invited the prime minister to meet on 24 September.
The chamber wants the talks to assess the effects of the proposed measures and identify sustainable solutions. The Government of Montenegro has set out a package of six laws for implementing the model, covering changes to labour and tax legislation, the removal of pension and unemployment insurance contributions, and changes to how local governments are financed.
PKCG’s objections include the preparation process: it says the usual procedures, including public consultations, were not followed, and that none of the proposals came with a report assessing regulatory impact. Since the model was announced, the chamber’s association boards have held a series of meetings and sent their conclusions and positions to the prime minister and relevant ministers.
Using available input data, PKCG and businesses developed several simulation models. Their results indicate that the measures could weaken the competitiveness of Montenegro’s economy, slow growth and reduce investment. The chamber also warns of a possible increase in the informal economy, employee layoffs and the closure of some companies.
The effects are expected to vary by company, with micro and small businesses considered most exposed, particularly in northern Montenegro. Business representatives want the measures to reflect differences between industries, the position of companies operating in international markets and the need to protect domestic production.
Businesses support raising employees’ living standards, but their position is that sustainable improvements must also preserve economic activity, production and investment. Those views were confirmed yesterday at an expanded meeting of PKCG’s Board of Directors. The chamber’s message was: “Business is not asking for privileges, but a predictable environment where decisions are based on facts, not assumptions.”
PKCG also said the changes required “dialogue and prior consultation with business”. It considers a model that raises living standards sustainably to be in the shared interest of business and the state. Its statement included no calculations or estimates of the number of jobs or companies that could be affected.
