For the first time in history, Montenegro will not enter the new year with a prepared budget. Instead, the new government has decided to resort to temporary financing until the end of March, while promising that salaries, pensions and social benefits will be paid on a regular basis.
Such developments, which are pushing the state into economic uncertainty, come as no surprise.
Very few financial experts believed that inexperienced Government will manage to propose a complex financial act in timely manner.
It has turned out that PM’s announcements about budget were contradictory and served only for “handling” the attacks of the Parliament.
One detail from November further corroborates this epilogue. Mr Krivokapić and Ministry of Finance of the former government started media quibbling concerning the budget. Mr Krivokapić claimed that he hadn’t received any data about the draft budget, while Ministry of Finance responded that he had never contacted them.
Ministry of Finance then stated an important thing – that draft budget was finished on 30 October but that it “will not be put into further procedure but rather be a subject of consideration of the newly-formed Government.
Minister Spajić and Mr Krivokapić preferred controversial bond issue and a €750 million worth borrowing.
After surprising investors’ interest in Montenegrin bonds, Minister Spajić praised vice-governors of the Central Bank and officers of the department.
Immediately after the new Government was elected on 2 December, Mr Krivokapić said that draft budget would be prepared by 20 December.
And then a sudden switch happened, in only one day. On 18 December, PM changed his story and announced temporary financing.
This decision was endorsed by Mr Dritan Abazović, vice-president of the Government, who presented it as new government’s desire “not to dance to the tune of DPS”.
WHAT DOES THE LAW SAY?
The law is clear, but it remains unclear how the amended budgetary units will function.
According to the current law on fiscal responsibility, if the law on the state budget or the decision on the municipal budget is not passed by December 31 of the current fiscal year, the Ministry of Finance, until its adoption to the spending units approves funds up to 1/12 (one twelfth) actual expenditures in the previous fiscal year.
Additional pressure on the government will be the announcement of DPS MP, Mr Nikola Rakočević, on the interpellation, i.e. a vote of confidence in the Government.
