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Socio-economic measures for the coronavirus crisis in Montenegro
First package of socio-economic measures
EUR 280 million to maintain current liquidity and supporting the most vulnerable categories of the population
- Postponement of loan repayment of economic entities by the Investment and Development Fund (IDF)
- Postponement of payment of taxes and contributions on salaries as well as obligations under the Law on Reprogramming for up to 90 days
- Creation of a new IDF credit line intended to improve the liquidity of entrepreneurs. The full value of the credit line is EUR 120 million, while the single loan-taking enterprise, can take a loan of up to EUR 3 million, with a 2-years grace period, and interest rate of 1.5% - 2%, depending on the source of the financial means.
- One-time financial assistance to pensioners with the lowest pension and beneficiaries of material security, in the amount of EUR 50.
- Postponement of payment of lease of state-owned real estate for a period of 90 days, as of April 1, 2020
- Facilitation in settling electricity bills
- Commercial and public broadcasting companies are waived from paying any broadcasting fee for the next three months. Moreover, Ministry of Culture will pay one-time financial help to these broadcasting companies.
Second package of socio-economic measures
About EUR 40 million have been set aside for that by June to preserve jobs and create preconditions for a faster recovery of economy
- Subsidies in the amount of 50-100% of gross salary of employees.
- Reliefs in order to improve the liquidity of the economy by reducing the VAT refund period and extending the exposure limit of the customs guarantee for deferred payment of customs debt.
- Reduction of salaries for groups of jobs A and B in Articles 22, 23 and 24 of the Law on Salaries of Public Sector Employees during the period of the second package of measures. These groups of employees include highest earning officials and reduction accounts to 50% of the salary.
- One-time financial assistance for the unemployed registered at the Employment Service who do not exercise the right to financial compensation and for pensioners who receive proportional pensions which amount does not exceed the amount of the lowest pension.
- Advance payment of 80 percent of premiums to agricultural holdings. Full value: EUR 3.500.000
- Payment of extraordinary compensation to beneficiaries of old-age benefits. The single payment is worth EUR 64 euros, number of beneficiaries was 3.200, and full value of this help was EUR 225.000.
- Payment of one-time support to professional fishermen. Full value: EUR 200.000
- Payment of contributions to holders of agricultural insurance for six months. Value: EUR 100.000 e, the number of individuals enjoying this benefit: 529.
- New favorable IDF credit line for agriculture and fisheries. Single loan-taking enterprise can take a loan of up to EUR 20.000, with interest rate of 1,5%, grace period of 1 year and due date of 2 years.
- Interest subsidy for a new IDF credit line for agriculture and fisheries. Value: EUR 150.000
- Market intervention programme. The government will ensure that all extra domestic agriculture supply on the market will be bought off and stored, to maintain market stability. Value of this intervention: EUR 3.000.000
- Support for the purchase of domestic products
- Support for timely settlement of obligations to producers by trading companies
Third package of socio-economic measures
EUR 1.22 billion- a development package with a long-term view on the valorization of domestic resources in the function of sustainable development. It covers the period of 4 years
Short-term measures
- Defined model of fiscal incentives, based on: subsidizing interest rates for credit lines with IDFs and commercial banks during the grace period for reprogramming of existing (tourism and agriculture sectors) and new credit placements (priority development projects);
- Creation of favorable credit lines (within the IDF and commercial banks) intended for financing short-term and long-term priority development projects;
- Tax relief by defining a lower VAT rate for certain areas and activities; The reduction of VAT goes from 21% to 7% in hospitality sector.
- Defined model of direct support to the economy through subsidising the salaries of employees in certain areas. In tourism, this support will account to EUR 16.2 million.
- Created a competitiveness programme as a direct grant to the economy, with 17 programme lines, with a reduction of administrative procedures when applying; Value of help: EUR 10 million solely in 2020.
- Defined concrete and market-based rapid and strong development breakthroughs, i.e. structure and dynamics of potential investments by areas for long-term economic development of Montenegro, as a continuous measure during and after COVID-19 crisis in accordance with sectoral policies of competent ministries created for the needs of the third package of economic measures.
- Support to vulnerable categories of the population in order to combat the negative effects of the pandemic. The support amounts to EUR 200 and full value of this support is EUR 1.8 million. Additionally, a rise of 13% is planned for the beneficiaries of lowest pensions as of January 1st, 2020, thus the difference for 2020 will be paid to them retroactively.
- Model of providing additional fiscal space, and its putting into service of implementation of measures
Medium and long -term measures
- Strengthening IT activities
- Support to the tourism sector
- The concept of rapid breakthroughs in the agriculture and fisheries sectors
- Rehabilitation and development economic measures
- Traffic support
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