During the 85th session led by Prime Minister Milojko Spajić, the Montenegrin Cabinet approved the Draft Law Amending the Law on the 2025 Budget of Montenegro. This amendment raises total expenditures by EUR 7 million due to necessary technical corrections for opening budget lines for various consumer units to accurately record expenses. The Draft Law estimates revenues of EUR 4,026,835,029.68, allocated as follows:

Current budget – EUR 1,508,481,087.99,

Funds – EUR 1,304,949,635.05,

Capital budget – EUR 280,000,013.00,

Reserve – EUR 43,132,144.94,

Financing transactions – EUR 890,272,148.70.

Earlier today, the Cabinet also endorsed the Draft Law on the issuance of covered bonds and oversight of covered bonds. This law enhances the regulatory and supervisory framework, promoting collaboration between two main regulatory authorities in Montenegro’s financial market: the Capital Market Authority and the Central Bank. This dual oversight over credit institutions issuing covered bonds improves conditions for potential investors, ensuring these instruments are among the safest available in the domestic capital market. Covered bonds serve as a secure financing option, bolstering capital market stability by reducing liquidity risks and enhancing financial system resilience. By passing this law, Montenegro aligns itself with international standards, complying with the EU Directive (EU) 2019/2147, which aids in harmonizing its legal framework with European norms and facilitates access to foreign markets and investors. These bonds are often linked to real estate financing, and this law can further develop the real estate sector by easing capital access for construction and renovation projects.

The session also adopted the Draft Law on Accounting, aimed at refining the legal text, precisely defining all provisions and simplifying the monitoring of compliance with any future amendments to EU accounting and financial reporting directives. This law aligns fully with relevant EU directives and policies in accounting and financial reporting, apart from the sustainability reporting segment. As the European Commission is amending Directive (EU) 2022/2464 on corporate sustainability reporting, it has instructed that our legislative framework should not be adjusted until these amendments are completed, after which Montenegro will align its national legislation regarding sustainability reporting. The adoption of this law lays the groundwork for fulfilling the final benchmark 4 within Chapter 6 – Economic Law.

The Cabinet further approved the Draft Law on Auditing. Recognizing the significance of quality financial statements for market functionality, and the reliance of numerous financial information users on authorized auditors and auditing firms, amendments were introduced in the current auditing legislation. The most vital reforms include better alignment with EU legislation, particularly EU Directive 2014/56/EU and EU Regulation No. 537/2014. These reforms clarify the licensing system for authorized auditors and auditing firms, impose stricter independence requirements, enhance organizational standards for auditing firms, improve audit report contents, strengthen audit committee roles, bolster oversight of authorized auditors and firms, and establish a more effective sanctions system. The adoption of this law meets the necessary criteria for closing the final benchmark 4 within negotiation chapter 6 – Commercial Law.

The Cabinet also adopted the Draft Law Amending the Crafts Law. This law significantly enhances the regulatory framework for crafts, focusing on alignment with the legal acquis of the European Union, which is a key obligation under Negotiating Chapter 3 – Right of establishment and freedom to provide services. The amendment aims to implement Directive 2006/123/EC on services in the internal market, addressing legal and administrative barriers that inhibit cross-border service provision, and fostering competition in the European market. This includes establishing an electronic Register of Craftsmen, marking a major step towards digitalization and improved management of the crafts sector. The law’s adoption signifies a major advancement for the crafts sector in Montenegro, enhancing labor mobility and creating a modern, efficient administrative framework in accordance with European standards.

During the session, the Draft Law Amending the General Law on Education was also endorsed. Discussions underscored that enhancements in the legal framework regarding security in educational institutions, digitalization, career guidance, and employment transparency contribute to a more modern, functional, and equitable educational environment. The law introduces provisions for online classes in extraordinary circumstances and the use of digital textbooks and educational materials, while the Ministry is tasked with detailing the organization of digital education through subsequent legislation. It revises the process for selecting educational institution directors by requiring the minister to opt for the top-ranked candidate, enhancing transparency and minimizing arbitrariness. Clear standards for hiring and evaluating educators have been established, including the option for temporary suspension of teachers facing allegations of sexual harassment.

The law provides institutional backing for career guidance through a dedicated Ministry unit in collaboration with the Employment Agency. It aligns with EU legislative obligations and removes prior obstacles to employing EU citizens as educators. Additionally, it enables financial inflow into the budget via licensing for extended stays and adult education institution license renewals every five years, creating a predictable and regulated income stream (the licensing fee is set at EUR 1000.00, with a EUR 500.00 modification fee). By eliminating public funding for private educational institutions, it promotes more rational public expenditure while maintaining equitable conditions within the educational market.

The Montenegrin Cabinet also adopted the Report on completed negotiations for the Agreement between the Government of Montenegro and the Government of the Republic of Croatia on property donation – the Culture House “Josip Marković” in Donja Lastva, Tivat. The Agreement specifies that Montenegro’s Government will donate the property to Croatia’s Government without needing additional approvals, with registration managed through the appropriate channels. Croatia’s Government commits to utilizing the property to foster cultural activities and preserve the heritage of the Croatian minority in Montenegro, thereby strengthening bilateral relations between the two nations and their citizens.

Lastly, the Cabinet endorsed the 2025 Investment Support Programme. To improve access to financing sources, the Ministry of Regional – Investment Development and Cooperation with NGOs developed this program aimed at boosting economic activities while enhancing the competitiveness of domestic products and services via investment support for equipment. Investments encompass all types of new capacity developments, expansions, renovations, upgrades of existing capacities, or replacements of outdated, damaged capacities. The 2025 Investment Support Programme, totaling EUR 1.2 million, consists of two components underscoring the importance of balanced regional development through increased funding, while maintaining specific incentive mechanisms for empowering youth and women in business.

• Program line for support of key investments – EUR 700,000
• Program line for small and sustainable investments – EUR 500,000.