EU flags Montenegro Euro model risks to public finances

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The European Commission’s annual progress report says Montenegro has made good progress in its EU accession talks but warns that the Euro model could threaten public-finance sustainability and the external balance. The report was due to be presented in Brussels on 4 November 2026.

The report says the risks posed by the model still need more detailed assessment after consultations with interested parties. Montenegro’s budget deficit exceeded its target for last year, while high mandatory spending and substantial debt refinancing needs continue to leave fiscal vulnerabilities.

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For the medium term, the Commission recommends limiting public spending and the overall public-sector wage bill. It also calls for measures to increase revenue and ensure compliance with fiscal rules. Separately, Prime Minister Milojko Spajić recently announced a large wage increase that would begin in January.

On the rule of law, the report identifies completion of constitutional amendments as a remaining obligation. The changes would remove immunity and introduce integrity checks for government members. It also calls for better investigation, prosecution and conviction results in corruption cases, particularly high-level corruption; the number of final convictions remains small.

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The Commission calls for urgent improvements to capacity and working conditions at the Special State Prosecutor’s Office, the Special Police Department and the Special Division of the Higher Court in Podgorica. It also records good progress in the key negotiating chapters 23 and 24.

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