An American Times Interview with the European Union Ambassador to Montenegro – Mr. Mitja Drobnic

 

European Union Ambassador to Montenegro: Mr. Mitja Drobnic

 

The American Times takes a seat with the EU Ambassador and Head of Delegation to Montenegro, Mr. Mitja Drobnic, to gain an outside perspective on the future, challenges as well as opportunities that exist within Montenegro. 

 

Ambassador Drobnic, many US citizens may not be fully aware of what the EU delegation’s role is in Montenegro or elsewhere. Please offer our American readers a synopsis of your function.

The role of any European Union delegation varies depending on the country. The EU and Montenegro is at the highest level that the European Union has with a non-member state. We are not here with a cold or cynical tone where we simply guide them through the contractual and legal obligations set forth through our charter; rather we are advocates for Montenegro’s prosperity and furthering our relationship.

We are interested in the country making the necessary reforms. In order to facilitate these reforms different roles are played by different institutions. The European Commission is dedicated to making sure the candidate country meets the criteria for accession in a timely fashion. The pre-accession stage is not easy, we must bring to the surface rooted issues which sometime means difficult conversations are in order to act efficiently, but it is in the interest of the country. It requires the country to invest and that investment will not return until accession is granted in the future. Of course at the end of it all Montenegro will have strong reforms in place, access to the internal EU market which is over 500 million people, access to EU funds, free movement of persons along with consumer and environmental protection for a better quality of life.

The benefits to Montenegro are quite obvious. Why does the EU want Montenegro?

Well, it’s a European country. The EU decided to offer the ability to join the EU after the fall of the Berlin Wall to Central European countries and after the Thessaloniki Summit the decision was made to allow Balkan nations the ability to apply for membership. In general though I think it is the natural orientation of the EU to close the physical gap in its membership countries to create an open system from Greece to Sweden. There are also political aspects. The rest of Europe has had a painful experience with the Balkans and we are definitely interested in establishing peace and stability in the region as it is difficult to co-exist next to a troubled country.

Are the requirements to enter more stringent following the 2007 accession of Romania and Bulgaria which has had its own issues?

They are because the integration process is always evolving commensurate with the changing landscape due to globalization. For example, the recent crisis has revealed weaknesses in the economic and monetary union which has led to new European Union legislation and new instruments that were not previously harmonized prior. In this instance I speak of taxation elements and economic governance controls which are indeed hedges against future crises. So certainly this will have an effect on future expansion criteria.

The pre-accession stage is not easy, we must bring to the surface rooted issues which sometime means difficult conversations are in order to act efficiently, but it is in the interest of the country.

What are some of the successful reforms that the Government of Montenegro has been able to achieve?

It would be prudent to start with the fact that Montenegro is still in transition for historical reasons. They had to go through two independence periods; from the dissolution of Yugoslavia and then in 2006 from the Serbia-Montenegro state the latter of which led to an embargo period from the UN Security Council [1992-1995]. For these reasons Montenegro has experienced a delay in its transitional period. With that in mind we are just now getting to foundational, prerequisite reforms of a primarily political nature. For example, the rule-of-law is a huge area and it isn’t solely about corruption or organized crime. This is about the whole set of rules. As you know a market economy cannot function without consumer protection, competition policies and so on.

Positively, in this regard, there was an amendment to the constitution this past year with the purpose of anchoring the independence of the judiciary function. By doing so it prevents the government from changing laws to suit their short term needs. This was an achievement but now we must monitor the implementation. Currently they are in the process of appointing a judiciary council which should happen very soon. Parallel to that with the view of increasing efficiency within the judiciary system there are reforms taking place from the courts to the police. So it’s a whole set of basic reforms. Due to the EU’s experience with previous enlargement they have decided to focus on this area first because it requires time and as I said it’s the basis for other areas of harmonization.

Let’s talk about civil society’s role in today’s Montenegro.

Civil society is a critical part to the transition of any emerging society. One of the problems in this country is the concentration of power where there has not been a regular change in government for the last 20 years. As in business, competition brings quality and so it does in politics. I believe civil society is important as a countering device. Montenegro’s civil society organizations serve us well by acting as an extended set of ears on the ground regarding human rights and even economic concerns which we may miss as we are only a delegation of 50 persons. As such, we encourage their presence and contribution to Montenegro’s 2014 Progress Report due later this year.

This may be difficult to gauge at the moment, but in your opinion is there a timeline in which Montenegro will achieve accession?     

Let me explain the process of integration and negotiations. The country does not negotiate on the adoption of the EU legislation rather it negotiates only at the time of implementation. The country either obligates itself to implement the legislation at the time of entry or they get a transitional period. But it’s not only about transposing the legislation, it’s about the implementation and enforcement through the courts if necessary which is always an area of concern.

If a country opts out of the transitional period by closing negotiations immediately there are still periods prior to integration starting with the “screening period” which looks at where the country is and where it will be in the future. Following this there are specific benchmarks that must be met and concurrent assessment of implementation as time proceeds. As items are met negotiations for that chapter are closed, yet monitoring still continues from the EU for adherence purposes.

So, based on these facts as well as some things stated earlier, to predict a timeline at this period in time for Montenegro would be pure speculation because we really do not know how quickly the country will progress. My opinion is that we are about 5 years away from envisioning a time-frame.

What are some sectors which offer options for investors?

The country’s economy is not well diversified. They have almost no industry. The main areas of the economy are services, tourism and transport with the energy sector emerging as a nice opportunity in the near future. Through energy they can become an export hub through the undersea cable being built from Montenegro to Italy.

Aside from this the country must find ways to attract industry. Although there are few local capacities for the development of this sector I believe through continued improvement of the investment environment investors will not be as reluctant to come from the West.

What are the main items holding up further investment from Western Europe and the US?

I would say confidently that legal uncertainty is a major issue. If an investor has a business related issue court procedures are a very long and cumbersome process. Following this is the relatively unstable environment where conditions are changing frequently making it difficult to forecast even a 5 year period. Finally, bankruptcy procedures are not clear.

We read that the European Investment Bank (EIB) is about to purchase 20% of the Montenegrin Stock Exchange Company [Berza] as well as looking at buying into local banks, insurance and brokerage companies. Do you see this as a positive sign in the overall climate?

Yes, definitely. The EIB is a strong reference for foreign investors and should certainly be noted.

From your interesting perspective as the Head of the EU Delegation to Montenegro please offer our readers a personal message regarding this country?

Investors considering entry should keep in mind that the situation in Montenegro will change rapidly. The problems at the moment will gradually disappear. If an investor comes now they can certainly count on improvement in the future because this process of integration will without doubt bring substantial changes in the investment environment. In the range of 5-10 years this country will be very much aligned with the internal market of the EU with all the rules that American investors are accustomed to. Again, the energy sector offers a good opportunity and even the infrastructure is underdeveloped so one should keep an eye on future tenders in that regard.

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