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24/04/2017

Continuing the activities within the International Monetary Fund (IMF) and the World Bank Spring Meetings, held in Washington from 21 to 23 April, Montenegrin delegation, Mr Darko Radunović, Minister of Finance, Mr Radoje Žugić, the CBCG Governor and Mr Nikola Fabris, the Vice-Governor for financial stability and payment system met Ms Ellen Goldstein, director of the World Bank for South East Europe, Mr Cyril Muller, World Bank Vice-President for Europe and Central Asia, Mr Tao Zhang, IMF Vice-President and Mr Paul Thomsen, director of the IMF European Department.

Implementation of the fiscal consolidation plan in mid-term and its structure in revenues and expenditures side as well as the scheduled measures for active risk management providing its full sustainability in mid-term were discussed at the meeting with director of the World Bank for South East Europe, Ms Ellen Goldstein and Cyril Muller, World Bank Vice-President for Europe and Central Asia. Vice-President Muller appreciated the credible fiscal policy of the new Government which treats fiscal pressures and challenges of the increasing public debt with responsibility and in a timely manner. Beside fiscal consolidation, improved quality of the banking sector assets, recorded during present and previous year also contributes to financial stability. At the same time, holistic approach to implementing FSAP recommendations was also praised, which is, among other, reflected through preparation of legal solutions significantly improving institutional and legal framework of financial system supervision. Vice-President Muller underlined that significant improvements in fiscal position and strengthening of financial stability create genuine grounds for enhancing cooperation between the World Bank and Montenegro by providing support in a form of IBRD guarantees for fiscal reforms, in order to additionally ease access of Montenegro to international capital markets in 2017. It was agreed for this cooperation to further intensify in the upcoming months.

Vice-President Muller also appreciated a major progress in implementing the tax system efficiency project aimed at increasing tax revenues as well as the managing industrial waste project that will contribute to sustainable development of Montenegro. The delegation was also supported for its request for health system reform, improving its efficiency and financial feasibility.

Both fiscal consolidation and readiness to actively manage public debt were supported in the discussions with Mr Tao Zhang, IMF Vice-President and Mr Paul Thomsen, IMF’s European Department director. At the same time, the IMF officials warned to a risk of normalizing monetary policy in America and Europe that could lead to an increase in the borrowing prices in international capital markets, primarily in the developing countries, including Montenegro. Vice-President Zhang and the director Thomsen showed the IMF readiness to provide support to Montenegro in stabilizing public debt and implementing fiscal consolidation and financial system reforms. To that extent, a technical assistance for implementing and increasing banking supervision capacity, as well as supervision capacities and standards of the Insurance Supervision Agency was agreed with the IMF representatives. With the aim of strengthening revenues side of the Budget, another technical assistance for continuing tax administration reforms and designing tax policy that would contribute to consolidation efforts of the Government was agreed as well.