Montenegro has drawn 89.3 million euros from the European Union’s Growth Plan for the Western Balkans, out of 383.5 million euros available to it, European Affairs Minister Maida Gorčević said. The country expects about 97.3 million euros for reforms covered by a half-year report, although the European Commission will determine the final payment. The funding is intended for the state budget and infrastructure projects.
The money drawn so far came through pre-financing and three tranches. Montenegro submitted its half-year reform report in July, estimating that it had fulfilled 90% of the obligations it covered. The expected payment of about 97.3 million euros depends on the Commission’s assessment of those reform steps.
The Growth Plan links financial support to the implementation of reforms. Montenegro’s Reform Agenda covers the business environment, the digital and energy transitions, human capital development and the rule of law. To receive each subsequent payment, the country must demonstrate that the corresponding steps have been carried out.
Gorčević described Montenegro as the leading performer in fulfilling the agenda, which she said the government had designed with ambitious goals. “A good result so far obliges us to maintain the pace,” she said. Failure to meet agreed obligations by their deadlines remains a risk to payments; the government is monitoring implementation with the institutions responsible for the reforms.
Part of the Growth Plan funding goes to the budget and part to infrastructure, with the aim of improving public services, schools and kindergartens, as well as facilities that make daily life and business easier. “Our goal is to use the full amount of support,” Gorčević said, describing schools, kindergartens and infrastructure as intended uses of the funding.
Investment and wages
Over the next two years, Gorčević expects citizens to see the clearest benefits of European integration through EU-supported investment, simpler business procedures, more investment and better conditions for job creation. Citizens reasonably expect progress towards membership to improve their quality of life and will judge it by whether they live more securely and with a better quality of life, in her view.
Progress towards membership could also make business conditions more predictable. Stable rules, protected contracts and equal operating conditions matter to investors and provide a basis for new companies, investment and better-quality jobs. A clear accession date would signal that Montenegro is stable and secure, potentially bringing investment in tourism, energy, agriculture and infrastructure, along with jobs.
“The greatest leap undoubtedly comes with membership,” Gorčević said. EU membership would give Montenegro access to cohesion funds for infrastructure and other capital investment intended to raise productivity and wages over time. The amount of those funds has already been proposed in the draft EU budget, according to the minister.
The European Commission has proposed a 3.2 billion euro financial package for Montenegro’s membership from 2028. Some benefits could come during preparations for accession through better market oversight and fewer barriers to business. Longer-term gains in purchasing power would require higher productivity, investment and better-quality jobs.
A proposed Euromodel for January next year would abolish employee contributions, lower taxes on wages and set minimum net pay according to qualification level. The proposed minimum monthly net wages are 1,000, 1,250 and 1,400 euros. Its effects need to be considered alongside the sustainability of public finances and changes in prices, Gorčević said.
Unemployment fell to a historic low of 7.47% last year, and the government wants to accelerate that trend. Income growth should translate into higher real purchasing power, while greater competition following entry to the EU single market could help stabilise prices, according to the minister.
Preparing companies for the single market
Gorčević described the EU single market as a market of 450 million people, where stronger competition should offer consumers more choice, better quality and more affordable prices. Rules on competition cover oversight of dominant retail chains, public procurement and market surveillance, alongside easier entry for new importers and service providers.
The Ministry of European Affairs and the Chamber of Economy of Montenegro have announced cooperation to prepare domestic companies for operating in the single market. Through the B4EU programme, they aim to help businesses understand new rules, meet European standards and prepare for stronger competition.
Small and medium-sized enterprises generate about 76% of Montenegro’s added value and employ more than half of its workers, according to Gorčević. For those businesses, investment in standards, certification and digitalisation could be a particular challenge. The planned support includes sector-specific explanations of new rules and connections with ministries, regulators and expert institutions.
Targeted training and early identification of problems are intended to limit unnecessary adjustment costs. Where there is business potential, the support would also connect Montenegrin companies with European partners and help them enter value chains. The Single Market Academy, operating through the Growth Plan with support from GIZ, is already training institutions and is expected to reach businesses from next year.
The single market would give domestic companies access to more than 450 million consumers. State and EU support is intended to give them time and tools to prepare. The costs of adapting to European rules need to be planned and spread over time, using European support and prioritising investments that benefit citizens and businesses most.
Budget position and payment conditions
“Public finances are one of Montenegro’s strongest arguments, not an obstacle,” Gorčević said. According to the Ministry of Finance, public debt stood at 58.5% of gross domestic product at the end of June, below the 60% threshold, while net public debt was about 52%.
Budget revenues rose in the first half of the year, and the deficit amounted to 1.3% of GDP, nearly 142 million euros less than planned. The minister said citizens would not bear the entire cost of aligning with EU rules because Growth Plan funds were already available. Reforms could also reduce the grey economy and increase revenue without new taxes.
Montenegro’s next expected Growth Plan payment remains subject to the European Commission’s assessment of the steps reported in July. Meeting the deadlines for outstanding obligations will determine whether the country can continue to draw on the 383.5 million euros available under the plan.
