During today’s 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 Draft Law raises total expenditures by EUR 7 million due to necessary technical corrections for opening appropriate budget lines to accurately record expenditures for several consumer units. The Draft Law outlines revenues totaling EUR 4,026,835,029.68, which will be 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.

Additionally, the Cabinet approved the Draft Law on the issuance of covered bonds and the oversight of covered bonds. This Law strengthens the regulatory and supervisory framework by promoting cooperation between two main regulatory bodies in Montenegro’s financial market: the Capital Market Authority of Montenegro and the Central Bank of Montenegro. This establishes a dual oversight system for credit institutions issuing covered bonds, enhancing investor confidence as these bonds are among the safest instruments suitable for the domestic capital market. Covered bonds offer a secure financing option, contributing to market stability by lowering liquidity risk and bolstering the financial system’s resilience. By passing this Law, Montenegro aligns with international standards, including the provisions of Directive (EU) 2019/2147, ensuring the harmonization of its legal framework with European norms and facilitating access to foreign markets. Covered bonds are commonly linked to real estate financing, and this Law’s enactment can enhance the real estate sector by simplifying access to capital for construction and renovation projects.

Today’s meeting also saw the adoption of the Draft Law on Accounting, aimed at refining the Law’s text, clarifying all provisions, and facilitating easier monitoring of compliance with potential new EU directives in accounting and financial reporting. This Law is fully aligned with relevant EU directives, except concerning sustainability reporting. The European Commission has initiated amendments to Directive (EU) 2022/2464 on corporate sustainability reporting, so it will not assess our legislative compliance at this time, directing that no transposition occurs until ‘Omnibus’ package amendments are adopted. Subsequently, Montenegro will align national legislation concerning sustainability reporting. The adoption of this Law sets the stage for meeting the requirements for closing the final benchmark under Chapter 6 – Economic Law.

The Cabinet also adopted the Draft Law on Auditing. Recognizing the significance of high-quality financial statements for market functionality and considering the reliance of many users on authorized auditors’ and auditing firms’ work, amendments to the existing auditing legislation have been proposed. Key reform areas include further alignment with EU legislation, notably EU Directive 2014/56/EU and EU Regulation No. 537/2014, which pertain to refining the licensing system for authorized auditors, enhancing independence requirements, improving organizational standards for auditing firms, enhancing audit report standards, amplifying the role of audit committees, strengthening oversight of auditors and firms, and establishing a more effective sanction system. The adoption of this Law satisfies the prerequisites for closing the final benchmark in negotiation chapter 6 – Commercial Law.

The Cabinet also ratified the Draft Law Amending the Crafts Law. This Law significantly enhances the regulatory framework in crafts, focusing on alignment with the European Union’s legal acquis, which is a key requirement in Negotiating Chapter 3 – Right of establishment and freedom to provide services. It aims to enforce Directive 2006/123/EC on internal market services by eliminating legal and administrative obstacles to cross-border service provision and fostering market competition. Provisions include establishing an electronic Register of Craftsmen, marking a significant step toward digitalization and improved crafts sector management. The law’s adoption is a critical advancement for Montenegro’s crafts sector, promoting labor mobility and creating a modern administrative framework aligned with European standards.

Today’s session also endorsed the Draft Law Amending the General Law on Education. The discussion emphasized that enhancing the legal framework regarding educational institution security, digitalization, career guidance, and employment transparency fosters a modern and equitable educational environment. The law introduces provisions for online classes during exceptional circumstances and encourages using digital textbooks and educational resources, with the Ministry tasked to define digital education organization via a secondary legal act. It also refines the director selection process for educational institutions, mandating the minister to choose the top-ranked candidate, thereby improving transparency and preventing arbitrariness. The law introduces clear hiring and evaluation criteria for teachers, including the provision for temporarily suspending a teacher under investigation for sexual harassment.

The new Law establishes institutional support for career guidance through a dedicated Ministry unit in collaboration with the Employment Agency. It aligns with EU obligations, removing previous barriers to hiring EU citizens as teachers. Furthermore, the law generates predictable budget revenues through licensing extended stays and renewing licenses for adult education institutions every five years, prescribing fees of EUR 1,000 for licensing and EUR 500 for modifications. By eliminating budget funding for private educational institutions, it promotes rational public spending while ensuring equal conditions in the education market.

The Montenegrin Cabinet also approved the Report on the completed negotiations for the Agreement between the Government of Montenegro and the Government of the Republic of Croatia regarding the donation of the property – the Culture House “Josip Marković” in Donja Lastva, Tivat. The Agreement states that the Government of Montenegro will donate this property to the Government of Croatia without requiring additional approvals, with the property being registered accordingly. Croatia commits to using the donated property for cultural activities and preserving the heritage of the Croatian minority in Montenegro, thereby further strengthening bilateral relations between the two nations.

The Cabinet also endorsed the 2025 Investment Support Programme. Aimed at enhancing access to financing, the Ministry of Regional – Investment Development and Cooperation with NGOs has developed this Programme to boost economic activity and increase the competitiveness of domestic products and services through investment support in equipment. Investments will cover new capacities, expansions, renovations, upgrades of existing facilities, or replacements of outdated or damaged resources. The 2025 Investment Support Programme, amounting to EUR 1.2 million, includes two program lines emphasizing the importance of balanced regional development through increased support, particularly for empowering youth and women in business.

Program line for key investments support – EUR 700,000

Program line for small and sustainable investments – EUR 500,000.