Montenegro Mulls Writing Off Debts of Poor

Montenegro's Ministry of Finance said it is considering new measures to help the poorest segment of the population, including a write-off of debts.

"With a thorough analysis of all possible effects, short-term and long-term, we are open to consider new incentives for the most vulnerable segments of the population, including a model that was recently implemented in the region," the ministry said.
 
Last week, Macedonia announced a plan to write off debts of citizens who cannot pay their credit card debts and bank loans. Only citizens on welfare, the long-term unemployed, people who lost a spouse in the last five years and the disabled may apply.

Macedonia’s Finance Ministry has urged utility companies to join the government-backed scheme in return for receiving annual tax breaks.

In recent months, Montenegro has already implemented a series of measures for the poor through new subsidies for employment, pensioners and power utility bills.

The Ministry of Finance has also proposed tax benefits for the voluntary financial restructuring of bad loans.

Analysts concede that a mass write-off of debts could have favourable economic effects for the poor, and for the banks that participate in this action, but some warn that the Macedonian model is not applicable in Montenegro in entirety.

Economic analyst Ivana Gudovic charged the government with populism, saying the measure was intended to ensure the poor vote for the government parties in the upcoming re-election in the capital, Podgorica.

There have been similar announcements in the past, she told BIRN, which had not led to much.

'The key question is what the criteria for assistance will be, when Montenegro has no data that accurately...