Montenegro economic analyses weigh costs of proposed Euro model

The Economic Chamber of Montenegro (PKCG) and independent analysts are evaluating the impact of the proposed ‘Euro model’ on the national economy, specifically regarding wage increases and labor costs.

PKCG has developed three scenarios illustrating how the model could affect businesses. In one scenario involving a hypothetical 10-employee company, raising all salaries to the new legal minimums—€1,000 for primary/secondary education, €1,250 for secondary, and €1,400 for university graduates—could increase total monthly labor costs from €7,537 to €13,448. This represents a yearly cost increase of approximately 78.4%.

Conversely, a sustainability analysis suggests the model remains viable if accompanied by increased productivity, a crackdown on the grey economy, and improved tax collection. Projections indicate that formalizing labor and taxing vacant apartments could generate between €55 million and €135 million annually. The analysis posits that higher net wages could stimulate domestic consumption and trade, provided that businesses can adapt through increased sales or cost savings.