Steering Towards EU and NATO Membership: the key steps to success

Six years after restoring its independence, Montenegro should be opening European Union membership negotiations in the summer of 2012. That is a major achievement for this 620,000-inhabitant country brimming with rich cultural and historical traditions, which managed to remain peaceful throughout the turbulent years in the Balkans and turned Montenegrin society into a modern economy ready to face the challenges of the international economic crisis, a partner in the European family and a model of stability in the region.

The Diplomatic Letter: Ambassador, on 3 June 2012, Montenegro will be celebrating the 6th anniversary of its accession to the independence it had lost in 1918. What is your analysis of the path that your country has travelled, in particular since the end of the wars in Former Yugoslavia?  

H.E. Irena Radovic: Guided by the desire to enable faster integration in the European Union (EU) and North-Atlantic Treaty Organization (NATO), eagerness to protect our national identity and create the best conditions for well-being of our citizens, on 21 May 2006, Montenegro chose by referendum to become an independent state, thereby splitting up the state union with Serbia, forged in 2001 in the wake of the break-up of Yugoslavia.
Being a country which traditionally perceives its multi-ethnic and multicultural character as a blessing and an asset, throughout the Balkans crisis and wars of the last decade of the 20th century, Montenegro has managed to preserve its multi-ethnic harmony, peace and stability, being the only Republic of the former Yugoslavia that has not had war on its territory. Guided by the same values, our country was and remains a credible partner to the international community in fostering regional cooperation and integration processes in the Western Balkans.
Today, Montenegro is a modern European upper-middle-income country, endowed with political stability and a dynamic and attractive business environment. The country uses the Euro as a legal tender since 2002 and its citizens enjoy visa free travel in the Schengen space.
I would like to highlight that less than five years after regaining its independence, Montenegro was formally awarded candidate status for membership of the European Union (EU) in December 2010. Having made measurable progress in harmonizing our legal framework with international standards, with multiple layers of reform underway, we are expecting to open accession negotiations with the EU this summer.
Montenegro has also made noteworthy progress toward NATO membership. In December 2009, it joined the Membership Action Plan (MAP), the final stage before fully-fledged membership of NATO. Montenegro actively participates in international missions and operations, demonstrating itself as a reliable partner to the international community in its efforts to establish peace and stability in the world.

T.D.L.: France reasserted its support for Montenegro’s European Union membership application on 27 October 2011, during Foreign Affairs Minister Milan Rocen’s visit to Paris. How would you describe relations between Montenegro and France, and bilateral political dialogue ?

H.E.I.R.: Montenegro and France value their traditionally close relations. Our country has proven itself as a reliable and helpful partner in joint efforts to build peace and stability in the Western Balkans, where France was particularly active during the dissolution of the former Yugoslavia and continues to play a vital role.
Genuinely committed to the European perspective of the Western Balkans, France values highly Montenegro’s enduring contribution to regional stability and cooperation and fully supports its EU accession. It was during the French Presidency of the European Union in 2008 that the Montenegrin Prime Minister Djukanovic submitted Montenegro’s application for EU membership to President Sarkozy. Since then, France has strongly contributed through its bilateral involvement across the board to the implementation of reforms and the success of Montenegro on its EU path.  France reaffirmed its strong political support on the occasion when Montenegro was granted official EU candidate status in 2010.  
The document regarding partnership between the two countries – the Roadmap for strengthening the Franco-Montenegrin relations – was signed in December 2009. It covers the strengthening of political dialogue, the deepening of cooperation in European affairs, joint initiatives aimed at enhancing cooperation within the framework of European common security and defence policy (ESDP), and within the framework of the Union for the Mediterranean.
It also provided the basis for strengthening the capacity of the Montenegrin administration through cooperation with L’École nationale d’administration (ENA) and the Centre for European Studies in Strasbourg, as part of state administration reform with a view to EU accession. The Roadmap also covers economic and cultural cooperation, which provides the foundation for a number of new initiatives in these domains.  These include new partnerships with France and the deepening of existing ties with regard to the leading role of France in reform of the judiciary in Montenegro and of the rural and agricultural sector within the EU cooperation framework.
The recent visit to Paris by the Minister of Foreign Affairs and European Integration of Montenegro, Milan Rocen, was an opportunity to further scrutinize our bilateral relations and reaffirm commitments to joint goals and France’s support of Montenegrin European and Euro-Atlantic integration. France welcomed Montenegro’s positive role, both in the region and internationally, with special emphasis on Montenegro’s involvement in the ISAF (International Security Assistance Force) Mission in Afghanistan and its support to transition in Libya. Subsequent political consultations held at the level of our respective Ministries in March 2012 provided an opportunity to identify new modalities of cooperation and joint initiatives in line with the Roadmap and to further develop existing cooperation with a view to the expected commencement of EU accession negotiations with Montenegro in June 2012.

T.D.L.: Prime Minister Igor Luksic replaced Milo Djukanovic at the helm of Montenegro’s Government in December 2010. Besides joining Euro-Atlantic organisations, which is his principal foreign-policy objective, what other key issues are shaping his action programme ?

H.E.I.R.: Further to the three pillars of our foreign policy, namely accession to the EU, NATO and regional cooperation, the Government headed by Prime Minister Lukšić is committed to strengthening the basis for sustainable economic and democratic development of Montenegro.
Mr Igor Lukšić assumed the responsibility of the Prime Minister in a challenging economic environment that affected both our country and our main international partners.  In such conditions, the Government aims to strike a balance by responding to the crisis in a way that will not endanger long-term fiscal and financial stability, and intended to create an institutional framework and competitive economic system that will attract sound investment and increase employment. Such an undertaking requires systemic changes, sacrifice and understanding by all, without exception, and in Montenegro, we are doing all that we can and all that is necessary to achieve that goal and improve the quality of life of all our citizens.
The Government’s overriding objective is to create the pre-conditions for turning the potential for high economic growth into reality, ensuring economic sustainability and stability in the long run, by implementing strict fiscal consolidation measures, structural reforms, and improving the business environment to make Montenegro more competitive.

T.D.L.: In December 2011 – a year after Montenegro secured EU Member State Candidate Status – the European Council envisaged opening of negotiations with Montenegro this summer. In light of your country’s ongoing efforts to meet the Copenhagen criteria, what are your Government’s top priorities and timeline to push ahead with structural reforms ? What specific measures is it planning to take with regard to strengthening the independence of justice and the fight against corruption ?

H.E.I.R.: Expediting structural reforms aimed at increasing employment, boosting competitiveness, triggering business potential and supporting innovation represents a priority of the Montenegrin Government and an integral part of the EU accession process. The objective is to increase the efficiency and quality of public services on one hand, and overall productivity on the other.
Important reforms, including the gradual increase in the pension age to 67 and amendments to labour legislation entailing more flexible conditions for termination of the employment, have already been introduced, making the system more stable in the long run.
The Government of Igor Lukšić continues with implementation structural reforms in healthcare, education, science, labour and social welfare, determined that these changes, combined with public administration reform, will provide a solid prerequisite for sustainable long-term growth and development.
As far as strengthening the independence of judiciary, Montenegro has initiated constitutional changes with the objective of further improving judicial independence. We are also amending the legal framework in order to merge individual bodies that deal with the fight against corruption into a single independent agency. By engaging all available capacities and using an active and responsible approach, Montenegro has achieved a notable progress – it received a score of 4.0 from Transparency International’s 2011 Corruption Perception Index which ranks it 66th in the world together with Croatia and Slovakia, but well ahead of the other countries in the Region and several EU member states.

T.D.L.: After enjoying rapid and sustained GDP growth – over 10% in 2007 – Montenegro’s economy took a fierce blow from the international financial crisis and economic downturn in 2009. What options does your Government have to cement its recovery for the long run? And, considering that the weight of your country’s debt is a source of vulnerability, what has been done to make public finances healthier and shore up the banking sector?

H.E.I.R.: In the years before the crisis struck, Montenegro generated the highest economic growth in the region; GDP per-capita was higher than in any neighboring country.
Although not formally part of the Eurozone, Montenegro enjoys the benefits of the single currency and common market. The European Union is also our biggest trading partner and with a high level of inter-dependence, Montenegro shares the economic fate of the EU. The economic crisis hit the Montenegrin economy hard due to its high dependence on foreign funding sources. Hence we undertook a determined crisis response package that has mitigated the effects of the recession and allowed us to preserve economic sustenance and living standards.
The economy of Montenegro is recovering and rebounding in vital sectors. The European Commission and the International Monetary Fund have recognized the stabilization of economic trends and our economic growth prospects. Considering the severity of the economic crisis, our results are respectable – Montenegro experienced GDP real growth at 2.5% in 2011 and envisages 2 % in 2012. However, laying the foundations for sustainable prosperity in the longer term is far more important than the short-term recovery. The task of the Montenegrin Government is to create conditions that will enable long-term, dynamic economic stability. The economy ought to serve as a source of inspiration for new ideas, inventions, investments and new technologies.
Fiscal stability remains one of our key priorities. The adoption of Amendments to the Law on Pension and Disability Insurance System were important steps in establishing long-term stability for public finance and overall financial stability. The budget deficit for 2011 was 3.9% of GDP and the public debt is at 45% of GDP, which is within the Economic Monetary Union limits. Furthermore, we have drawn up an ambitious plan to generate a primary budget surplus in 2012 and to decrease the public debt to 41% of GDP. In 2013, budget surplus should be above 3% of GDP and the public debt below 38% of GDP. Current budgetary spending was and is being reduced, and capital expenditures will allow for greater investment in infrastructure-related projects. The Government also continues with the policy of a low, simple tax structure in order to lessen the burden on labour and income. Personal income tax was reduced from 12% to 9% and corporate tax rate is at the level of 9%.
To answer your last question, it is obvious that along with fiscal stability, a stable banking system lays the foundations of financial stability. We have recently adopted a new set of financial laws. We are also strengthening the independence of financial regulators and their capacity to exercise effective supervision.

T.D.L.: Your country joined the World Trade Organisation in December 2011 and is trying to further strengthen its attractiveness among foreign investors. Beyond its geographic position and favorable business environment, how would you characterize the Montenegrin market strengths ? Which business sectors are emerging as growth drivers for Montenegro, alongside tourism ?

H.E.I.R.: Montenegro is an internationally recognized leader in business reform and a well-established investment location in South-East Europe. It offers highly capable intellectual capital and customs-free access to over 10% of the world market. It can serve as a manufacturing hub for duty-free exports to the European Union, the Russian Federation, Turkey, South-East Europe and the European Free Trade Agreement members (EFTA).
For three years in a row now, Montenegro has been ranked as the most competitive country in South East Europe, according to the World Economic Forum Global Competitiveness Index. With the country’s clear economic policy, light role of government in business regulation, free turnover of capital, a competitive tax policy, a stable fiscal and financial system, monetary stability stemming from using the euro a currency, a flexible labour market and clear and nondiscretionary laws, our country has emerged as a truly attractive business destination, rapidly moving ahead and seeking to become a regional business hub.
I would add that the Montenegrin Law on Foreign Investment guarantees that foreign investors can establish a company and operate a business under the same conditions as locals. Our legislation makes no distinction between domestic and foreign companies, their profits and dividends can be repatriated without limitation or restrictions. Moreover there is no limit on either the amount of the investment or the investment fields. Complete equality has also been guaranteed to foreign investors operating in the Port of Bar on the Adriatic – a free trade zone in Montenegro, created in compliance with EU standards.
Spectacular natural resources – including beautiful beaches, the unspoilt nature and a fascinating history and culture – have inevitably led the development of a healthy tourist industry in Montenegro. Tourists participate in many different kinds of activities, from swimming and sunbathing to yachting, golf, hiking & biking, bird watching, and adventure sports. The World Travel and Tourism Council (WTTC) ranks Montenegro as the top-growing tourism destination and predicts an average annual rate of growth in Travel and Tourism investment for Montenegro of 16.4% a year from 2011 to 2021. With such an expected growth rate in the tourist sector and an insufficient number of hotels, tourism remains one of the most interesting domains for Foreign Direct Investment.
In addition to the tourism industry, Montenegro offers a wide range of investment opportunities, particularly in the field of infrastructure, the energy sector, the organic food production industry, transportation and the maritime industry.

T.D.L.: Sveti Stefan island, off the Montenegro coast, hosted the 14th South-East European Cooperation Process (SEECP) Summit on 30 June 2011, which was chaired by your country. What is your perception of progress in regional cooperation, especially as regards the more sensitive challenges such as curbing organized crime ? On what fronts would you like to see efforts intensify ? As your country has recognized Kosovo’s independence, how can Podgorica help its integration into regional cooperation mechanisms ?

H.E.I.R.: Development and prosperity of Montenegro are closely correlated with the stability and security of the Western Balkans and regional cooperation remains our foreign policy priority. With no open issues with our neighbours and excellent relations that we have built up over time, our country is in the position to be a driving force in regional cooperation initiatives, many of which we have chaired during the past few years.
Strengthening the rule of law and fighting organized crime at the regional level are on-going and operative undertakings. I should like to take this opportunity to emphasise that it was during the Montenegrin chairmanship of the South-East European Cooperation Process (SEECP) that the Regional Strategic Document on cooperation in justice and home affairs was initiated and signed during the Ministerial meeting held in Budva in June 2011.
Outside of justice and home affairs, Montenegro encourages cooperation and actively contributes in the areas of economic and social development, energy and infrastructure, security cooperation, building human capital, with parliamentary cooperation as an overarching theme.
Montenegro recognized Kosovo in 2008 and it was the right decision, contributing to stability in the Region. We have good bilateral relations and whilst presiding over regional initiatives – namely the SEECP, Central European Free Trade Agreement (CEFTA), Central European Initiative (CEI), and the Adriatic Charter (A5) – Montenegro was very supportive and invested considerable effort to secure the participation of Kosovo. In this regard, it is with great satisfaction that we welcome the agreement recently reached between Belgrade and Pristina on regional representation of Kosovo, as a step forward in regional coope-ration and strengthening the European and Euro Atlantic perspective of the Western Balkans.

T.D.L.: Montenegro aspires joining the Atlantic Alliance and has been granted Membership Action Plan (MAP) since December 2009. What has it achieved so far ? Is it realistic to expect NATO membership at the Chicago Summit on 20 and 21 May 2012 ? Given your country’s active involvement in the International Security Force (ISAF) in Afghanistan, how would you define Montenegro’s specific contribution to NATO action ?

H.E.I.R.: In December 2009, Montenegro joined the Membership Action Plan (MAP), an instrument of cooperation which represents the final stage before a country becomes a member. Montenegro is currently in the second MAP cycle, and will complete implementation of its second Annual National Program in June 2012, following an assessment report by NATO. Through this process, Montenegro remains fully committed to its reforms, with a strong focus on providing concrete results and deliverables, in both the political and military spheres.
Having in mind that the Summit in Chicago is not an ‘enlargement summit’, we keep our expectations realistic. Nevertheless, we expect that the Allies will confirm their commitment to the open door policy, encourage Montenegro’s efforts and provide a forward-leaning language with regard to the country’s future membership in NATO.
Montenegro contributes members of its national armed forces to the ISAF mission in Afghanistan. Currently, Montenegro has 39 men and women in ISAF, as part of the fifth consecutive rotation. As a country from the region that has recently suffered conflict, Montenegro understands that the process of building enduring stability is a long one, and is committed to staying in Afghanistan in accordance with the principle “in together, out together”. Apart from contributions to ISAF, Montenegro also contributes to the missions in Liberia, Somalia, and Cyprus.
 
T.D.L.: Mirroring the fact that Montenegrin diplomacy has been assuming new responsibilities in international organisations, your country has been elected into the UNESCO Executive Council for 2011-2015. Given the budget constraints that this Organisation is dealing with, what message is your country planning to send out in order to push ahead with the reform drive that UNESCO Director General Irina Bokova has started ? As a Permanent Delegate, what are  Montenegro’s top priorities within the framework of UNESCO programmes.

H.E.I.R.: Montenegro cherishes its traditionally strong cooperation with UNESCO dating back to the Yugoslav era in Montenegro’s capacity as a Republic, which provided a strong basis upon which to build, following the renewal of Montenegrin independence and its full membership to UNESCO in March 2007. Furthermore, I am convinced that it is Montenegro’s genuine commitment to the principles and values of UNESCO that led to the aspiration to contribute to building the Organisation’s capacity for the further safeguarding and protection of cultural heritage, and supporting the modernisation of science, technology and innovation policies. This commitment ultimately translated into our country assuming the important position as member of the Executive Board of UNESCO in November 2011.
UNESCO today is undoubtedly facing a challenging situation and it is why we have at the 189th Executive Board endorsed a new roadmap that will allow the Organization to carry out its programme for the next year, despite severe funding constraints. For the moment, our priority is to minimize the impact through a clear vision, a precise action plan and dynamic management.  We are looking at this temporary crisis as an opportunity to make UNESCO stronger, more effective and resilient. I remain convinced that we shall overcome the difficulties, and during its 4-year tenure in the Executive Board Montenegro will continue to actively engage in the more speedy and efficient comprehensive reform of UNESCO being undertaken by the director general Irina Bokova. Our aim is to enhance delivery and build a UNESCO that is closer to the needs of Member States, but also to extend the competences of the Organization in expertise and leadership, which are more necessary today than they have ever been.
In terms of Montenegro’s national framework and priorities, the rich cultural and historical heritage of Kotor and natural resources of the National Park Durmitor with the River Tara canyon are recognized for their universal value and were enlisted as World Heritage sites in 1979 and 1980 respectively. Confident of the importance of the historical core Old Royal Capital of Montenegro, we are in the process of preparing the nomination dossier for its inscription to the World Heritage List. Further to that, our efforts will also be focused on protecting the old town of Bar as the largest and one of the most important medieval archaeological sites in the Balkans, roman Doclea and “Biogradska gora” National Park.
In my capacity as Permanent Delegate of Montenegro to UNESCO, I shall continue to make strong efforts to protect and promote the cultural heritage of Montenegro and the South Eastern European region as a whole. In this context, it is worthy of note that Montenegro took the lead in promoting intercultural dialogue in the Region at the highest political level and also launched the establishment of the Regional Centre for Cultural Heritage Management in Cetinje, as a platform for capacity building, policy advice and dissemination of good practice and exchange of experiences in South East Europe. An excellent example of regional cooperation is the nomination of the Stecci Medieval Tombstones for their inscription to the World Heritage List, a joint initiative of four countries of the South-East Europe (Montenegro, Bosnia and Hercegovina, Croatia, and Serbia). A further example is the DICTAS project, promoting understanding and management of water resources and regional planning in the countries of Dinaric Karst, prepared in close cooperation with the UNESCO Regional Office in Venice.

T.D.L.: Montenegro is an observing member of the Organisation Internationale de la Francophonie (OIF) and signed a Memorandum of Understanding in May 2011 to enhance French language skills in the Montenegrin Administration. How can Montenegro presence in the OIF help to diversify cooperation with France and in what fields ? And, more generally, how are you expecting your OIF membership to enhance your country’s diplomatic presence ?

H.E.I.R.: Since joining the OIF, as an observer member in October 2010 at the 13th Summit of Francophonie in Montreux, we have built an excellent relationship with the Organization and we are using the opportunity offered to us to strengthen and build relationships with its member states through sharing the French language and its universal values.
Montenegro, due to its geography and its history, has always been bathed in many cultures and languages and this tradition explains our firm commitment to respect cultural and linguistic diversity. Having in the past a Francophone tradition we are particularly committed to re-energizing the French language and that is why we are engaged in promoting French language training in our schools and our universities. The French Institute of Montenegro with the strong support of the OIF helps to give strong impetus to learning French in our educational system.
In May 2011 we signed a Memorandum with the OIF on the implementation of a multi-annual programme of French language training for 300 diplomats and officials in Montenegro, specializing in European and international issues. Our commitment is vital while Montenegro is actively preparing for accession negotiations with the European Union next summer, and while France plays a prominent role in achieving the institutional reforms by our country, particularly in the field of justice. France is also one of our partners in the development of our rural and agricultural sector and many initiatives are expected to emerge in the coming years, especially in the field of culture, and our roots in Francophonie contribute to strengthening our relations with France.
The 14th Francophonie Summit to be held in Kinshasa in October will be another opportunity to highlight the ties that bind us to Francophonie and to reaffirm our political commitment in its favor. The 75 states and governments of the International Organization of Francophonie, bound by common and universal values, represent over a third of UN members and we are pleased that Montenegro participates hand-in-hand with member states, in strengthening the role of the Organization on the international stage. I should like to highlight that despite its recent accession to the International Organization of Francophonie, Montenegro is already very active in Francophone groups within the European Union framework, the United Nations system and in UNESCO here in Paris and that we remain fully committed to promoting the aims and objectives of the Organization via bilateral and multilateral initiatives.