Despite problems with corruption and organised crime, Montenegro, a small Adriatic country with a population of less than a million, is set to open EU membership talks as early as 2011.

Overview

Following the disintegration of Yugoslavia in 1992, Montenegro remained in a federation with Serbia. During the ensuing wars in Bosnia and Croatia, Montenegrin police and military forces participated in attacks by Serbian troops, yet Montenegro itself was untouched by the conflicts.

In 1996, Montenegro split from the regime of Serbian leader Slobodan Milošević and forged its own economic policy, unilaterally adopting the German Deutschmark as its currency. When Germany switched to the euro in 2002, Montenegro did the same – despite not belonging to the euro zone.

Serbia and Montenegro formed a new 'state union' in 2003, but three years later Montenegro held a referendum on independence: in a poll strictly monitored by the EU, 55.5% of citizens voted for separation and 44.5% voted to remain with Serbia. On 3 June 2006, Montenegro's declaration of independence was adopted by its parliament.

For a couple of years before the split, the EU tried unsuccessfully to discourage the separation of Montenegro from Serbia. Up to now, the prevalent opinion in Brussels remains that the former Yugoslavia should not disintegrate any further.

The philosophy of those in Montenegro who had pushed for separation was that once liberated from Serbia's complicated regional context, the small country could advance much more swiftly towards EU membership. But on the other hand, it became clear after the split that Serbia had a much greater administrative capacity to take onboard the EU legislative 'acquis' than Montenegro.

A tourist country

Montenegro, a tourist country, has an attractive Adriatic coastline and is bordered by Croatia to the west, Bosnia and Herzegovina and Serbia to the north, Kosovo to the east and Albania to the south. It has a population of just under 700,000 – one-fifth of whom live in the capital city, Podgorica.

The major ethnic groups in the country are Montenegrins (43%), Serbs (32%), Bosniaks (8%), Muslims (5%) and Albanians (3%). Yet with their historical, religious and linguistic ties, differentiations between Montenegrins and Serbs tend to hinge on how people define their own identity.

Montenegro has experienced strong economic growth since 2006. The growth has triggered an increase in foreign investment. The global crisis has slowed the country's development – affecting tourism, infrastructure and exports – yet it is in a better position than many of its neighbours.

Montenegro's formal EU accession process began in October 2005, when the EU began negotiating a Stabilisation and Association Agreement (SAA) for Serbia and Montenegro. Following independence, Montenegro launched its own SAA negotiations – which were finalised in October 2007.

Montenegro officially applied for EU membership in December 2008. It is currently awaiting an opinion from the European Commission which, if positive, will lead to the country acquiring official 'candidate' status. If this happens, accession negotiations could begin in earnest in 2011.

In November 2009, upon the recommendation of the European Commission, the EU's member states agreed to lift visa requirements for citizens of Montenegro travelling to the Schengen area. The liberalisation came into effect on 19 December 2009 (EurActiv 01/12/09).

Issues

The Serbian connection

Montenegro has a special relationship with Serbia due to the cultural, historical, religious and linguistic ties between the two. Indeed, many Montenegrin citizens declare themselves to be Serbs rather than 'Montenegrin', reflecting these close connections.

An independence referendum in May 2006 delivered a close result, 55.5% to 44.5%, yet ultimately led to a comfortable victory for Prime Minister Milo Djukanovic's centre-left, pro-European coalition in general elections a few months later (EurActiv 11/09/06).

Montenegro's recognition of Kosovo in October 2008 sparked outrage in Serbia and resulted in Belgrade expelling the Montenegrin ambassador. Montenegro recently established diplomatic relations with Kosovo – prompting another angry response from Serbia as it awaits a ruling from the International Court of Justice on the status of its former province (EurActiv 17/05/10).

In May 2010, Prime Minister Djukanovic accused Serbian President Boris Tadić's advisor Mladen Djordjević of ''interfering'' in Montenegrin politics by offering help to the opposition. Tadić rejected the accusation.

Montenegro and the euro

Montenegro has never had its own currency in modern times. After using the German Deutschmark for six years, it unilaterally adopted the euro in 2002 when Germany made the switch along with the other EU members of the euro zone.

However, unlike official members of the euro zone, Montenegro does not have its own euro-denominated notes or coins. Its banks do not register or track notes in circulation.

The absence of monitoring makes Montenegro a prime location for money laundering. According to Conservative MEP Charles Tannock, rapporteur on Montenegro in the European Parliament's foreign affairs committee, it is ''a very easy place for organised crime to go, buy large amounts of unregistered euro notes through the banking system and launder them for their notes coming from another jurisdiction'' (EurActiv 19/05/10).

Despite this problem, the adoption of the euro has helped Montenegro achieve macroeconomic stability, maintain low inflation and attract significant levels of foreign investment and tourism in recent years (EurActiv 09/06/10).

Corruption and organised crime

As in all the former Yugoslav republics in the Balkans, corruption and organised crime remain a serious problem in Montenegro and legal mechanisms need to be improved, concluded the European Commission in October 2009.

''Overall, the institutional, legal and administrative capacity for fighting organised crime has been strengthened. The improvements to the legislation on criminal procedure are a major step in the right direction. However, the capacity of the police and judiciary to deal with such cases remains limited,'' stated the Commission's 2009 progress report.

Yet the Montenegrin ambassador to Germany, Vladimir Radulović, believes that Montenegro's small size means that organised criminal groups cannot prosper. ''In such a small place as Montenegro, where literally everyone knows everyone, it is almost impossible to have the structures of organised crime,'' he affirmed (EurActiv 10/06/10).

The Montenegrin government was recently accused of involvement in a tobacco smuggling operation. A court cleared Miroslav Ivanišević – a former official working for Prime Minister Milo Djukanović – of the smuggling charges, ruling that he had acted within Montenegrin law. Djukanović was also indicted, but benefited from his immunity.

In May, British newspaper The Independent named Djukanović as the twentieth richest world leader, with an estimated fortune of £10m (€12m). It described the Montenegrin leader as ''mysteriously wealthy'', referring to the smuggling allegations denied by Djukanović.

Positions

After meeting Prime Minister Djukanović on 9 June in Brussels, European Council President Herman Van Rompuy praised Montenegro's progress in implementing reforms and its role in promoting regional dialogue and cooperation.

''I would like to commend the prime minister for the significant progress achieved in the course of European integration. I appreciate his government's efforts aimed at state building and the necessary reforms," Van Rompuy said.

"I would also like to highlight Montenegro's record in inter-ethnic dialogue and cooperation. In many ways, Montenegro serves as an example for the region," he said. 

"I assured the prime minister of the EU's full support for the European vision of Montenegro. We agreed that work remains to be done. The EU is keenly interested in the implementation of the reforms. Sustainable progress in the fields related to the rule of law, such as judicial reform, and the fight against corruption and organised crime, remain of utmost importance for us. There are no shortcuts, the remaining challenges must not be underestimated," the Council president added. 

"We also agreed on the importance of regional cooperation. The European integration of the Western Balkans must be complemented by vigorous efforts to promote regional cooperation. I praise the leadership of the prime minister and his government for assuming important responsibilities – from the Central European Initiative through the Adriatic Ionian Initiative to the South East European Co-operation Process,'' Van Rompuy concluded. 

Montenegrin President Milo Djukanovic has said that he expects the country to gain EU candidate status in November 2010, as it "deserved'' to do after what it had done with ''economic and democratic reforms so far".

He also urged the EU to continue with its enlargement policy, saying it was "truly in the interest of Europe'' to continue with its unification. ''That is a strategic vision. If Europe fails to establish that vision I fear that it will lose competitiveness compared to other world players," he said.

Milica Pejanović Djurišić, Montenegro's ambassador to France, said that the country's situation in terms of corruption and organised crime was ''not worse than others'' in the region and that Montenegro is ''well advanced in comparison to other countries'' on the road to EU accession, as reforms had begun ''even before relations between Brussels and Podgorica were institutionalised''.

She called for EU-Balkan summits to take place more regularly due to ''Montenegro's accession process accelerating'' and said she preferred to follow the 'regatta' principle, by which the most advanced states towards accession cross the finish line first – rather than all the Western Balkan countries joining as a bloc.

Vladimir Radulović, Montenegro's ambassador to Germany, believes that Montenegrin society has undergone a radical transformation since the 1990s and is convinced that the country will be able to initiate membership talks next year.

''To sum it up: when I compare Montenegro today to Montenegro at the end of the eighties or in the nineties, we are talking about two completely different societies. We are not perfect. We are considered to be on the 'periphery' of Europe, insignificant to everybody but ourselves. But the progress that has been made in only four years is absolutely remarkable," Radulović said.

"I have no doubt that we will become an EU candidate country – either in December of this year or early next year – and that accession negotiations can be opened in the course of 2011,'' he told EurActiv.de in a recent interview.

Radulović also elaborated on the ''complex relationship'' between Montenegro and Serbia and the ties that many Montenegrins still feel to the former Yugoslavia. ''It is true that a lot of Montenegrin citizens declare themselves to be Serbs – even though they were born in Montenegro, as well as their ancestors, their fathers and grandfathers,'' he said.

''Most people in Montenegro still feel that they are part of this big, greater country that was known as Yugoslavia. There is a certain political, mental and psychological dualism that you will not find in any other country. There are lots of people who are very loyal or, at least, mindful of what Serbia says,'' he explained.

British Conservative MEP Charles Tannock, rapporteur on Montenegro in the European Parliament's foreign affairs committee, said that the country's small size means that its administrative resources are struggling with the workload required to implement EU standards.

''One of the general problems Montenegro faces is that it is a mini-state, with a population of under a million. Therefore its administrative resources are very stretched in doing all this kind of work and are having to 'reinvent the wheel','' he told EurActiv in a recent interview.

''One of the things I have been urging is that the Croats – who translated the entire acquis – should make that available to the Montenegrin authorities, as they don't really have the expertise or the financial resources to do this kind of work and they need a lot of help from the Commission. But I think they should also get it from their neighbours who speak a commonly-understandable language. So I'm urging the Croats to make their documents available,'' he added.

Yet Tannock is confident that Montenegro will be able to open its EU membership negotiations in 2011 and will recommend this to the Parliament and Council – provided that the Commission is satisfied with the country's responses to its questionnaire.

''Provided they give the green light, in my report – which I aim to bring out immediately after – I will be arguing strongly that they should also be allowed to open negotiations, which in all likelihood should be able to start in 2011,'' he stated.

Zdeněk Sychra, a European studies expert at Masaryk University in the Czech Republic, observed that Montenegro has made considerable steps towards the EU since 2006 but that problems remain – notably political influence on the judiciary and corruption.

''We can see some problems: the influence of political elites upon judicial bodies and public administration; insufficient administrative capacity; organised crime; extensive corruption and insufficient success in the fight against it; excessive centralisation of the decision-making process; the shadow economy; and so on,'' he told EurActiv.cz.

''Despite the aforementioned progress, there is still a problem with the practical implementation and application of new reform laws. These things can be improved step-by-step during the negotiation process,'' he added.

Sychra also lauded the impact of the euro in Montenegro. ''The euro helped the Montenegrin economy to reach macroeconomic stability and low inflation, and the country has become more attractive and safer for foreign investment.''

Timeline

  • 1991:Break-up of Yugoslavia begins.
  • 1992: Montenegro remains part of smaller Federal Republic of Yugoslavia (FRY), together with Serbia.
  • 1996: Montenegrin government severs ties with Serbian regime. Montenegro forms its own economic policy and adopts German Deutschmark (DM) as its currency.
  • 1999: EU proposes new Stabilisation and Association Process (SAP) for South Eastern Europe.
  • Nov. 2000: Zagreb summit begins SAP for Serbia and Montenegro within FRY.
  • 2002: Montenegro unilaterally adopts the euro after Germany replaces the DM.
  • 2003: FRY reconstituted as State Union of Serbia and Montenegro.
  • June 2003: Thessaloniki Summit confirms that SAP countries may join EU once they are ready for membership.
  • Oct. 2005: Negotiations on Stabilisation and Association Agreement (SAA) opened between EU and Serbia and Montenegro.
  • 21 May 2006: Referendum on Montenegro's independence from Serbia (55.5% vote for separation; 44.5% vote to remain with Serbia).
  • 3 June 2006: Montenegro's declaration of independence formally adopted by Montenegrin parliament.
  • 12 June 2006: European Council declares will to develop relations with Montenegro as a sovereign, independent state. Bilateral recognitions by member states follow.
  • 10 Sept. 2006: Parliamentary elections in Montenegro.
  • 26 Sept. 2006: SAA negotiations launched.
  • 22 Jan. 2007: Council adopts European Partnership for Montenegro.
  • 15 Oct. 2007: SAA officially signed, together with interim trade agreement.
  • 19 Oct. 2007: Montenegrin parliament adopts new constitution, largely in line with European standards.
  • 1 Nov. 2007: European Commission Delegation opens in the capital, Podgorica.
  • 6 Apr. 2008: Pro-European President Filip Vujanovic re-elected. Vote seen as affirmation of country's march towards EU integration.
  • 27 May 2008: Commission presents roadmap identifying benchmarks for visa liberalisation for Montenegrin citizens.
  • 15 Dec. 2008: Montenegro formally applies for EU membership.
  • 23 April 2009: Council invites Commission to submit opinion on Montenegro's membership application.
  • 16 July 2009: Commission proposes that Council lift visa requirements for Montenegro.
  • 9 Dec. 2009: Prime Minister Milo Djukanovic delivers Montenegro's replies to Commission's accession questionnaire in Brussels.
  • 19 Dec. 2009: EU lifts visa requirements for Montenegrin citizens.
  • 1 May 2010: SAA enters into force.
  • 2011: Target date for opening EU membership talks.