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PM Marković presents third package of Government measures to support citizens and economy: After 280 million in first, and 40 million in second package, third support package is worth EUR 1.22 billion

PM Marković presents third package of Government measures to support citizens and economy: After 280 million in first, and 40 million in second package, third support package is worth EUR 1.22 billion
Published date: 23.07.2020 17:00 | Author: PR Service

Ispis Print

Prime Minister Duško Marković said that the Government had adopted a third package of economic measures to support citizens and the economy to mitigate the effects of the coronavirus pandemic. The package is worth EUR 1.22 billion and covers a four-year period.

"The coronavirus pandemic, in addition to the health crisis, also caused an economic crisis of global proportions, the negative impact of which cannot be more precisely assessed, nor, unfortunately, its end is in sight today. After we have very successfully overcome the challenges at the very beginning of the epidemic, and in the first days of its outbreak, responded with adequate measures of economic support to the economy and citizens, implemented them during the first and long quarters, our expectation was that we will bring the third package in a more favourable environment. The first package of measures amounted to EUR 280 million and was predominantly related to maintaining current liquidity and supporting the most vulnerable categories of the population. The second set of measures was created to preserve jobs and create preconditions for a faster recovery of our economy. Until June alone, we allocated around EUR 40 million for that. During the implementation of all these activities, we were aware of the fact that the moment we are living in exceeds the scope of intervention measures that have been similarly implemented by many other countries. We also realised that the global economic situation has imposed on us an even greater and more demanding obligation - the obligation of a responsible, thoughtful and long-term approach in the economy and development. Therefore, the third package of economic measures, which was being prepared for months, will amount to EUR 1.22 billion," the Prime Minister said at a press conference held immediately after the Government adopted the third package of measures.

Allocations, while maintaining the stability of the financial system

The Prime Minister said that it is no less important that we reach this amount of money and allocations in a fiscally sustainable way, without endangering the stability of the financial system.

"In order for the planned economic strategy to be implemented, the Government has prepared a whole range of legislative interventions. It implies the adoption of two new laws: the Law on Innovation Activity; the Law on Incentives for Development of Research and Innovation; as well as essential interventions in terms of amendments to two other important legal texts: the Law on Value Added Tax, and the Law on Energy"- said Prime Minister Duško Marković.

Security for employees, retirees, social welfare beneficiaries and all citizens

The Prime Minister pointed out that the measures, or rather the new economic strategy - will extend over a period of four years, which will provide certainty and predictability for our economy, companies and entrepreneurs, and consequently - security for employees, retirees, social welfare beneficiaries, and all our citizens.

The third package of measures will include, the Prime Minister announced, certain short-term, and long-term measures.

The purpose of short-term measures is to provide:

- Support to the tourism sector in the amount of EUR 83,350,000;
- Incentive for agriculture and fisheries for the realisation of investments in the total amount of EUR 89.4 million;
- Improvement of the competitiveness of the economy through 17 programme lines and EUR 10 million worth grants in 2020 alone!
- Support to the economy through subsidising salaries, including tourism in the total amount of EUR 16.2 million!
- Support to the most endangered categories of the population in the amount of EUR 1.8 million!

"So, within the intervention approach, we will again subsidise salaries and save our employees, reschedule loans and reduce the VAT rate from 21% to 7% on the preparation and serving of food and non-alcoholic beverages in hispitality industry for a period of one year" - said Prime Minister Duško Marković. 

EUR 200 per person for the most vulnerable categories, a 13% increase in minimum pensions retroactively from 1 January

The Prime Minister said that, taking into account the needs of the most vulnerable categories of citizens, financial assistance of EUR 200 per person is planned for beneficiaries of material support of family, and beneficiaries of material support of veterans.

"In addition, the Government will propose an amendment to the Law on Amendments to the Law on Pension and Disability Insurance, which will provide the retroactive payment of the planned increase of 13% from 1 January 2020 to the beneficiaries of the lowest pension. We believe that the mentioned measures, although methodologically short-term, along with many others that follow them, will achieve the effect that is expected of them in the near future," said the Prime Minister. 

Long-term measures for the development of tourism, IT sector, agriculture, fisheries, energy and transport

The Prime Minister presented the long-term measures, stating that this is the Government's strategic vision of supporting all branches of the economy.

These measures, the Prime Minister said, are intended for:

- Development of information technologies with the ambition to grow this sector into an IT industry
- Tourism as a strategic economic branch
- Agriculture and fisheries
- Energy and
- Traffic.

The Prime Minister said that it was obvious that long-term measures should have an effect in all those branches where the new reality imposes the need for a new and specially supported economic model.

"Therefore, the third package in the medium and long term recognised the space for rapid and focused development, based on the results achieved, proven experiences, and a platform for putting existing and abundant resources in support of sustainable development. In this part, we especially recognised the importance of investments in the field of information technologies, where we have earmarked about EUR 30 million for incentives. However, in addition to development opportunities in all areas that offer us this, we have identified another field in which it is necessary to act simultaneously. That is the necessity of rationalisation and reduction of unproductive costs" - said the Prime Minister.

The Prime Minister said that projected strategic investments and expansive budget spending that has developmental characteristics, on the other hand, should be accompanied by savings and rationalisation where current spending is a burden and does not provide new value or development opportunity.

Therefore, said Prime Minister Duško Marković, the third package will include:

- Reduction of current non-investment spending in the scope of additional 10% for all budget users and state funds. Special attention will be paid to the rationalisation of the budget position - Other personal income!
- Reduction of the vehicle fleet in the public administration, limiting the number of users who have the right to use official vehicles, as well as the sale of a part of the vehicle fleet!
- Rationalisation of salaries in state-owned companies.

It is our obligation to turn words into action as a new value for Montenegro and all citizens

Prime Minister Duško Marković said that the Government considers it an obligation to ensure economic and financial stability, and material security of each individual, while providing infrastructural and overall development, and further growth of our economy.

"That is why we have not kept the approach of some other economies and economic doctrines, which plan their plans and interventions in the short term. We have set stability and security in this most important social area for the next 4 years, with an investment of one billion and two hundred and twenty million euros in our own development and sustainability, thus creating an obligation for the new Government. We will not run away from such an obligation, as well as from the responsibility and commitment to turn all this, which will be discussed in more detail by fellow ministers, into action, into a new chance and new value for our Montenegro, for each individual and their families"- concluded PM Marković.