Temporary financing is generally not a sustainable solution even though it’s justified in certain situations and may not necessarily be a bad thing, Mr Vasilije Kostić, a professor at the Faculty of Management in the town of Herceg Novi and an economic analyst tells in a statement for CdM.
The Government of Montenegro made a decision on Friday not to draft the budget and that they decided to work out a realistic budget in March. Representatives of the executive power claim that salaries and pensions will be regular, and that they have ensured the money for next year.
In this context, Mr Kostić says that the afore-mentioned decision on temporary financing is a well-known institute that has its purpose and practical use. However, despite being legally approved, it represents an extraordinary “remedy”, that is, an extraordinary measure, so it’s obvious that it’s not a sustainable solution, rather a temporary – ad hoc measure that is supposed to repair the potential damages arising from the failure to adopt the budget.
“Regarding the damage or benefit of this measure, we cannot tell about it before we see what happens, as only later events will show whether the undertaken measure represented a good solution or a bad decision,” Mr Kostić was adamant.
According to him, temporary financing was announced once before, back in 2009, during the first years of the global economic and financial crisis, but never actually implemented, so, in that sense, this decision may be reasonable.
“Regardless of everything that has been said: temporary financing doesn’t generally represent a sustainable solution even though under certain circumstances it has its purpose and may not necessarily be a bad thing.”
