Montenegro proposes ‘Euro model’ pension and wage reforms

Euro model pension reform minimum wage increase social security contributions Montenegro economy

The Montenegrin government has adopted the ‘Euro model’ reform package, which includes significant changes to the social security and wage systems. Starting in January, the government proposes reducing the pension and disability insurance contribution from 10 percent to zero. This shift will change how future pensions are calculated, moving from a system based on insurance length and contribution base to one based on employment duration and reported earnings.

Alongside the contribution changes, the reform proposes substantial increases to minimum wages based on education levels: 1,000 euros for low qualifications, 1,250 euros for medium education, and 1,400 euros for higher education.

The proposal has met with mixed reactions. Employers, represented by the Union of Employers, have expressed concern that the reform could harm small businesses, increase prices in sectors like tourism and transport, and lead to higher unemployment. Pensioner associations have also voiced opposition, arguing the reform shifts the financial burden from the pension fund to the state treasury and could lead to a drop in average pensions relative to salaries.

Economic projections from the IMF suggest that if contributions are abolished, the budget deficit could reach 10.7 percent of GDP in 2025 and 13.3 percent by 2029, with public debt potentially rising to 102.5 percent of GDP by 2029.

Entities

Government of Montenegro · IMF · International Monetary Fund · Milojko Spajić · Montenegro · Party of Pensioners, Disabled and Restitution · Podgorica · Pokret penzionera Crne Gore · Slobodan Mikavica · Union of Employers of Montenegro · Za dostojanstven život čovjeka

Claims

What the coverage asserts, and how many sources carry each claim.

[● 3 SOURCES] Pensioner associations claim the reform shifts the financial burden from the pension fund to the state treasury and all citizens. tvpljevlja.me
[● 4 SOURCES] The government proposes reducing the pension and disability insurance contribution from 10 percent to zero starting in January. prv.mk · plusinfo.mk
[● 5 SOURCES] The government proposes minimum wages of 1,000 euros for low qualifications, 1,250 euros for medium education, and 1,400 euros for higher education. prv.mk · plusinfo.mk · bizniscg.me · cetinjskilist.com
[● 2 SOURCES] Pensioner associations argue the reform would cause the average pension to drop from 54 percent to 43 percent of the average salary.
[○ 1 SOURCE] An IMF stress scenario suggests the budget deficit could reach 10.7 percent of GDP in 2025 and 13.3 percent in 2029 if contributions are abolished. plusinfo.mk
[○ 1 SOURCE] Under the proposed scenario, public debt could rise from 61.5 percent of GDP in 2023 to 102.5 percent by 2029. plusinfo.mk
[● 2 SOURCES] The Party of Pensioners, Disabled and Restitution (PIR) announced a protest in Podgorica. tvpljevlja.me