The European Union is actively seeking to address a complex issue regarding Montenegro’s usage of the euro, which has occurred without formal membership in the EU or the eurozone. Initially accepted as a stabilizing measure, this situation is now presenting legal and technical challenges as Montenegro progresses through its accession negotiations.
Since 2002, Montenegro has employed the euro unilaterally, lacking any formal agreement with the European Central Bank or adherence to EU guidelines. This practice, termed “unilateral euroisation,” does not align with EU treaty stipulations that require candidate nations to first join the Union and subsequently meet specific convergence criteria before adopting the euro.
As discussions around accession enter their final phases, this anomaly is increasingly difficult to overlook. Finance Minister Novica Vuković has indicated that the European Commission is working towards a “pragmatic solution,” with a formal proposal anticipated by the end of May.
The situation is not political per se but rather institutional. EU accession protocols have never accounted for a country that has utilized the euro for an extended period without being part of the eurozone. This creates a legal void: Montenegro cannot formally “adopt” the euro through conventional means since it already uses it, yet it does not fulfill the necessary criteria set forth by EU treaties.
Additionally, reversing the process of euroisation is not a viable option for Montenegro. The euro is integral to the nation’s financial framework, ensuring banking stability and external credibility. With no independent currency, Montenegro’s central bank operates without monetary sovereignty and relies on eurozone monetary conditions.
This scenario presents Brussels with limited avenues for resolution. One potential approach under consideration is a formalized recognition mechanism that would legitimize Montenegro’s current use of the euro within the framework of accession treaties without necessitating a disruptive transition. Another option may involve transitional arrangements focused on fiscal discipline and financial oversight aligned with eurozone governance standards.
The urgency of this matter is underscored by Montenegro’s status as the most advanced EU candidate, having provisionally closed 14 negotiating chapters and targeting accession around 2028. The drafting of the accession treaty has already commenced, marking a significant shift from negotiation to implementation. Any unresolved institutional matters, especially those related to monetary policy, could impede progress in these final stages.
Beyond legal considerations, the question of euro usage carries significant economic ramifications. Montenegro’s unilateral adoption of the euro mitigates currency risk, reduces borrowing costs, and enhances investor confidence. However, it also removes traditional macroeconomic tools such as exchange rate adjustments and independent monetary policy, thereby intensifying pressure on fiscal discipline and management of external balances.
For Brussels, reconciling legal uniformity with geopolitical strategy poses a challenge. The urgency surrounding enlargement policy has intensified, positioning Montenegro as a pivotal case for expedited accession within the Western Balkans. Thus, while the issue concerning euro usage may be technical in nature, it intersects crucially with treaty law, financial stability, and the credibility of enlargement efforts.
The ongoing negotiations are not centered on whether Montenegro will continue using the euro—this is already established—but rather on how this reality can be formally integrated into the EU framework without creating precedents that might complicate future enlargement processes.
