After the parliamentary elections held in Montenegro on June 11th, it is almost certain that the political movement “Europe Now”, which was founded only a year ago, will take over the executive power in that country. “Europe now” brings an innovative economic strategy that differs from the usual one in the region, where the strategy of fiscal responsibility, i.e. maximum savings, which was adopted through the influence of the former chancellor of Germany, Angela Merkel.
The strategy of this movement, as assessed by the author Aleksandar Đokić, aims to stimulate consumption by increasing the earnings of citizens, that is, consumers, and balanced distribution of tax duties. As part of this idea, there is also the clear intention of the “Europe Now” movement to make Montenegro a haven for crypto capital. This can be seen from the many meetings of the leader of the movement, Milojko Spajić, with the crypto businessman Vitalik Buterin, but also from the many summits of the crypto community that have been held in Montenegro in recent years.
It is understandable that the movement, in its campaign and address to citizens, emphasizes raising minimum wages and average salaries, rather than attracting crypto capital, about which little is known in the Balkans.
The reverse side of the “Europe Now” reforms is the deterioration of the provision of health services in the state sector, as direct contributions to the health insurance system have been abolished and the pace of state borrowing has increased. If the “Europe Now” movement succeeds in maintaining fiscal stability, it will be up to the citizens of Montenegro to decide whether they like a higher standard of living or a better quality of state services, they cannot have both because it is a matter of fiscal reform, Montenegro it did not come across an oil deposit that would generate capital by itself.
Crypto and those who don’t like states
The crypto narrative is, however, more interesting because the wider Balkan public is at least familiar with the existence of this financial instrument and digital currency. In order to understand what role a Balkan country with a low level of internet literacy can play in that market, we first need to explain the philosophical and ideological foundations of cryptocurrency.
Namely, crypto could not have originated anywhere else but in the bosom of Western civilization. It is essentially a libertarian social philosophy that represents a contemporary branch of radical liberalism.
The biggest fear of libertarians is the increasing role of the state in the economy, and even in society. Further, in order for crypto to develop, a widespread culture of Internet communication was needed, a factual fusion of concrete and meta reality, which was only possible in the technologically advanced and individual consumer oriented West. Finally, it was necessary for those libertarians who live through the Internet to have enough capital to be able to become independent investors, to actually finance crypto startups, which was again possible only in the ranks of the developed Western IT sector.
If we assemble this three-part personality portrait, we get a well-paid IT libertarian who is wary of the state, and society as such, and who has enough money on his hands to try to repeat the rise and fall of the internet bubble at the end of the previous century with like-minded people.
Even on the examples of successful businessmen of that type, such as Elon Musk and David Sacks, we can see that these are people who have a tendency to support populist political movements and various conspiracy theories, all for the purpose of opposing the state (in their case the USA), which they fear so much and do not trust at all.
In this domain, a big problem for technologically advanced Western societies is the latent consequence of that same development, which is the deification of Internet capitalists. We should also add the nature of the Western education system, oriented towards the creation of specialists, without general knowledge of society. The creation of Internet deities, who do not understand the social, historical and philosophical context of their own civilization, will prove very dangerous for the functioning of Western liberal democracy.
Regulation is coming to the West and the East of Europe is a refuge
How is Montenegro or the Balkans connected to the crypto movement? The crypto market has expanded over time, and has already managed to suffer its first serious contractions, i.e. losses. From a narrow libertarian core, the crypto market has attracted financial speculators from all corners of the planet with its steady growth.
These speculators are not only trading the given financial instruments in bad faith, but have fully, according to Stanislavsky’s method, entered the role of Western crypto-enthusiasts. More and more unregulated crypto companies are springing up, which damage the reputation and put the crypto community itself in existential danger.
Despite this phenomenon, through the expansion of the crypto market, the need to outsource the production of digital currency to less developed countries with at least a medium level of internet infrastructure grew. In this endeavor, Eastern Europe came as promised – a sufficient number of somewhat digitally literate people, with an Internet infrastructure that has room for rapid development.
Thus, Russia, Ukraine, and even Kazakhstan became centers of crypto production, so-called mining, before the Russian invasion of Ukraine. The lack of regulation, that is, the digital illiteracy of the state administrations of Eastern Europe, certainly helped the given process.
Montenegro, as usual in the Balkans, arrives at the party near its end, when everything that was worth it has already been consumed in pleasure.
Government regulation of crypto markets in the West is very close. These digital currencies will be closely monitored by agencies that monitor financial capital trading, such as the US Federal Deposit Insurance Corporation (FDIC). The FDIC has already brought several lawsuits against unsupervised crypto brokerage firms.
Hence, a narrow window opens for Montenegro to attract the most dubious crypto capital, which is fleeing as a precaution, not from the Western market, but from Western registries and supervisory institutions. This capital tries to find refuge wherever possible, because every year of undisturbed “business” represents an additional cycle of uncontrolled earnings.
Potential for Montenegro (and a big risk)
One should not indulge in estimates that the crypto market will completely fail, that is impossible because it represents an innovative instrument of financial trade that enables an even faster turnover of capital, and that turnover is the flywheel of the global economy, which rests on financial instruments, not on the real economy.
How much this general economic model will succeed in functioning will depend on the general planetary geopolitical stability – the more wars, the higher the degree of fragmentation of the global economy into blocs, the more important the real economy will become, and the financial turnover will become unsustainable as the foundation of the economy.
However, a free, unregulated crypto market will soon become a thing of the past. Montenegro is located outside the EU and has the possibility to benefit by attracting crypto capital of different quality, in other words stability, in the next few years. Provided that the state itself does not invest capital in crypto, as King Milan Obrenović once invested in the bankrupt Serbian railway, everything will be fine.
It is important for Montenegro that it and its citizens do not become victims of speculative crypto capital. On the other hand, as soon as its crypto venture starts, Montenegro will find itself under pressure from Eurobureaucrats to regulate the given market, which will again become one of the stumbling blocks for EU accession.
Eventually, Montenegro will certainly have to align its financial regulatory policy with Brussels, but there is palpable hope that it will not be forced to do so in the short term, which certainly means at least a few fiscal years of adding extra profits from crypto capital.
As with the “Europe Now” fiscal program, the success of the Montenegrin crypto venture will depend on the ability of the leaders of the future Montenegrin government to minimize risks for the country and maximize profits.
The fact that in our region there is simply no social-political culture that would give birth to an educational system that would train true experts in the crypto sector does not inspire confidence. The fear that the one who wants to generate income will end up with short sleeves and shortened political support is very real.
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