The subchapters of Chapter 17 are economic and monetary policy.

When was the chapter opened?

Chapter 17 – Economic and monetary policy was officially opened at the Intergovernmental Conference on 25 June 2018. Negotiations in this chapter are ongoing.

Opening benchmarks?

Within this chapter, Montenegro had two opening benchmarks:

1. Montenegro should amend Article 8 and Article 17a of the Decision of the Central Bank of Montenegro on the required reserve of banks, which allows banks to set aside and hold up to 35% of the minimum reserve in the form of treasury bills issued by the Government of Montenegro, in order to eliminate the possibility of banks’ reserves held in the form of treasury bills.

2. Montenegro needs to adopt and submit to the Commission a detailed action plan, defining clear objectives and timelines for full alignment with the acquis, as well as measures to develop the necessary administrative capacity to implement the acquis by the date of EU accession. The action plan should also include a timeframe for achieving ESA 2010 standards in terms of general government deficit and public debt levels, as well as for submitting pre-accession fiscal notifications, which would strengthen regular assessment of Montenegro’s economic performance in the context of EU pre-accession economic surveillance.

Both opening benchmarks were met.

Closing benchmarks?

Montenegro is working intensively towards meeting european standards and creating of the conditions for closing of this chapter, related to:

1. Montenegro has aligned its legal framework with the acquis in order to ensure full central bank independence, the prohibition of monetary financing of the public sector, the prohibition of privileged access by public authorities to financial institutions, and the full integration of its central bank into the European System of Central Banks.

2. Montenegro has adopted the required constitutional change in order to ensure that the primary objective of price stability is defined in compliance with articles 127(1) and 282(2) of the Treaty on the Functioning of the EU.

3. Montenegro provides a track record on cooperation with the Commission on reported irregularities and investigation cases involving EU funds. Montenegro has aligned its legal framework to comply with requirements for national budgetary frameworks as laid down in Council Directive 2011/85/EU.

4. Montenegro has fulfilled the criterion of being a functioning market economy.

5. Montenegro has agreed to a solution developed by the EU on how to apply the EU’s framework for the adoption of the euro.

What are the activities in the coming period?

The focus of activities in the coming period will be on further harmonization of legal and strategic documents, implementation of regulations and strengthening of administrative capacities.

Institutions/organizations participating in the working group?

The Negotiator for Chapter 17 as well as the Head of the Working Group are from the Central Bank of Montenegro, while the contact person for the Working Group 17 is selected by the European Integration Office.

In addition to representatives of the Central Bank of Montenegro, members of the Working Group are representatives of the following bodies and organizations: Ministry of Finance, European Integration Office, Monstat, Union of Employers of Montenegro, Chamber of Commerce of Montenegro, Capital Market Commission, Insurance Supervision Agency and Mediteran University.

What are the benefits to Montenegro of this chapter?

The aim of European policy in this chapter is to adapt the Montenegrin economy to the principles of an open market economy based on free competition, a single currency policy and achieving and maintaining price stability. Also, goal is to increase transparency and sustainability of public finances as well as to improve the competitiveness of the Montenegrin economy.