Montenegro to Cut Public Sector Wages in 2015

Montenegro published its draft budget bill for 2015, which includes cutting 7.3 million euro off the public-sector wage bill compared to 2014, reducing the figure to 380 million euros.

It comes after the cabinet last week set the 2015 budget at around 1.9 billion euros.

The figure is a quarter higher than 2014, to cover loans for highway construction and repayments of previous loans.

The bill is a disappointment to trade unions, which last week reiterated their demand for an increase in salaries in 2015.

Finance Minister Radoje Zugic said that Montenegro could not afford wage rises. "The ministry open to discuss the issue... but we clearly told them that there will not be an increase," Zugic said.

Education, health and military unions are the most persistent in demanding significantly higher salaries next year.

They have demanded increases of 30 per cent, saying the government has the money to cover the rises as many state institutions "use more resources than they should".

Unions have based their demand for salary raises on a previous agreement with the government, which promised negotiations on wage rises if GDP recorded growth of over 3.5 per cent, which the Montenegrin Statistical Office has confirmed.

The government expects to run a budget deficit of 6.78 per cent and may borrow up to 650 million euros in 2015 to cover loan obligations and the budget deficit.