Serbia + 1 more

Montenegro - the EU contribution

Brussels, 21 March 2000 - Montenegro which has a population of some 600,000 - remains a Republic of the Federal Republic of Yugoslavia, but has differentiated itself from Serbia by pursuing a path of political and economic reform and openness to the West under President Milo Djukanovic.

As a result, Montenegro has come under considerable pressure from the Milosevic regime in Belgrade, which has badly mismanaged the economy and denied Montenegro its constitutional role in economic affairs. Belgrade has effectively closed down trade between Serbia and Montenegro, denying Montenegro access to its most important and cheapest source of food and medicines. Belgrade's policies are threatening political and economic stability in Montenegro; the government is facing large budget and balance of payments deficits.

Montenegro has embarked on a bold path of reform, and offers an example within the FRY. It now finds itself in a precarious position, and deserves strong European and international backing. The EU is determined to provide such support. For example, Montenegro has been exempted from the EU sanctions regime against the FRY whenever possible and the EU is supplying substantial material and technical assistance.

What is the EU doing to help Montenegro?

In response to the difficult situation faced by Montenegro, on 20 March External Relations Commissioner Chris Patten announced a doubling from 10 million to 20 million - of the EU's contribution to Montenegro under its year 2000 OBNOVA programme. The Commission is urgently discussing with the Montenegrin authorities priority use for this additional money.

This brings to 82.7 million the total amount made available by the EU to Montenegro since April 1998, including humanitarian assistance of 18 million and food security of 10.4 million. (These figures do not include funds provided by EU Member States under their bilateral aid programmes). 44.3 million has already been contracted or paid; the rest is in the pipeline.

The EU expects to make further substantial amounts available in food security and humanitarian assistance to Montenegro in 2000, which are currently under discussion and are therefore not included here.

A more detailed breakdown...

In the last few months: Since December 1999 alone, the EU has delivered nearly €12 million to Montenegro. This comprises €5 million in food aid (see below) and over €6.6 million in support for refugees in Montenegro. In addition, €2.5 million has been made available to the Montenegrin Government to help fund electricity imports.

Infrastructure support: Commissioner Patten visited Montenegro on 10 March. He met President Djukanovic, Prime Minister Vojanovic and the Foreign and Finance Ministers, and discussed further EU support for Montenegro. During his visit, Commissioner Patten announced €5 million in infrastructure support for quick start projects which include a bridge over the Moraca River in downtown Podgorica and the rebuilding of the road to Podgorica airport and the airport junction.

Food security: In 1999, the EU launched a food security programme of €10.4 million for Montenegro, the first €5 million of which was paid in December 1999. This programme is targeted at supporting social welfare payments, which is the most efficient way to make an immediate impact on the food supply to the most vulnerable households, while alleviating the burden on Montenegro's budget. It is expected there will be further substantial assistance for Food Security from the 2000 budget.

Technical assistance: The EU is now providing technical assistance designed to institute economic reforms in key areas, including tax policy, public administration and revenue collection. The EU has stepped up its technical assistance to Montenegro in 2000. It has an adviser based in the Prime Minister's office in Podgorica, and two experts in the Finance Ministry advising on revenue collection and reform of Montenegro's tax system. Another expert has been providing advice to the Ministry of Justice on public administration reform. A further expert will be sent to provide advice to the Statistics Department by the end of March.

Humanitarian assistance: The EU's humanitarian agency ECHO spent 18 million in humanitarian assistance in Montenegro in 1999, with more to come in 2000. ECHO has a representative based in Montenegro.

Tangible results...

The impact of this assistance can be seen on the ground in Montenegro.

For example, the EU:

  • Delivered 12 new ambulances in February 2000 to Montenegro.
  • Delivered hundreds of cattle since November 1999, which will help to counter the food blockade imposed by Serbia.
  • Provided basic shelter, food, non-food items, medicines, and water sanitation for refugees in Montenegro from Croatia and Bosnia, as well as more recently displaced persons from Kosovo. 60 000 refugees/displaced persons remain in Montenegro, compared to a peak of 90,000 in July 1999.

EU money is also being used to:

  • Provide help establishing small businesses, which are vital for job creation.
  • Support the creation of an Aid Co-ordination and Programming Unit within the Montenegrin Government, to make sure that EU aid is promptly and properly disbursed.
  • Help the Ministry of Education to update Montenegro's education programme, focusing on the needs of 7-15 year olds.