After years of political instability stalled Montenegro’s EU accession process, the country has reinvigorated its efforts to join the 27-nation bloc under Milojko Spajic's government that came to power after the 2023 general election. 

The renewed impetus for enlargement since Russia’s invasion of Ukraine has given an opportunity for Montenegro, along with other existing candidate countries, to advance. At the same time, both Russia and Serbia – which regard Montenegro as part of their spheres of influence – are distracted by other issues, as pointed out in a memo published by the German Council on Foreign Relations (DGAP). 

Its authors argue that the coming months will be critical for Podgorica to demonstrate reform progress, and for the EU to respond. Both sides’ “moves will also be closely watched by Nato, which is prepared to exploit new vulnerabilities in this Nato member strategically located between Serbia and the Adriatic Coast,” the report says.

While Russia is typically quick to exploit weaknesses in Montenegro, formerly part of its sphere of influence but now a Nato member, currently “with Russia busy with other challenges and Serbia focusing on the persistent crisis in Northern Kosovo, the EU is currently at an advantage vis-à-vis potential spoilers”, the report says. 

As well as the Kosovo issue, Belgrade is also in a tricky domestic political situation following the December 2023 elections, which sparked thousands-strong protests amid claims of rigging. A new government still has to be appointed post-election, and President Aleksandar Vucic has promised new mayoral elections in the capital Belgrade. 

Renewed vigour

Meanwhile, within Montenegro there has been renewed vigour and commitment to EU integration since the appointment of Spaji of the Europe Now (PES) movement as prime minister in October 2023. 

In the months since, there has already been some progress. “Under its new government, Montenegro has unblocked its accession process. Although the small country faces many obstacles, it now represents the best opportunity for the EU to regain momentum for enlargement in the Western Balkans,” says the report, ‘Montenegro’s EU Push: Imminent Opportunities and Challenges’. 

It is based on the findings of a fact-finding mission to Podgorica by experts from four European think-tanks – DGAP, the Jacques Delors Institute, Clingendael and Carnegie Europe – in February, and co-organised by DGAP and Ana Nenezic of local think-tank Analitiko. 

The country started EU membership talks in 2012 and has opened all 33 negotiating chapters. However, it has only closed three so far, as progress was long stalled by a lack of political will. The Democratic Party of Socialists (DPS), which had ruled Montenegro since before independence, lost its majority in 2020, and since then there have been a series of short-lived and unstable governments. 

Now Spajić's administration has started to address long-standing issues, including the appointment of key judicial figures and enhancing cooperation with EU agencies like Europol to combat transnational crime. There is also a broad consensus across party lines, crucial for advancing EU-related reforms, with the opposition, led by the DPS, backing the cabinet on matters related to the EU. 

Spajić has stressed the government's commitment to meeting EU requirements, stating that any mistakes or delays on the EU track will result in dismissals within his cabinet. The government's focus in the coming months is to meet interim benchmarks on the rule of law and fundamental freedoms by June and to initiate the closure of more negotiating chapters by October.

The European Commission is closely monitoring Montenegro's efforts as it prepares its Interim Benchmark Assessment Report (IBAR). While optimism is running high in Montenegro, EU officials have cautioned against overconfidence, stressing the need for sustained reform efforts.

Finances stabilised 

At the same time, as bne IntelliNews reports, Montenegro’s finances have stabilised since the country struggled to pay an instalment on its loan from China’s EximBank back in 2021. This was after Montenegro was the worst hit country in the Emerging Europe region by the coronavirus (COVID-19) pandemic and lockdowns. 

Since then things have improved considerably. At the beginning of March this year credit rating agency Standard & Poor's (S&P) upgraded its outlook on Montenegro's B/B credit rating to positive.

This positive shift in the credit rating outlook signals encouraging trends in Montenegro's economy and positive expectations for the future, S&P said.

The positive outlook is particularly grounded in the potential strengthening of Montenegro's fiscal results expected in 2024-2025. Despite the current prediction of an average budget deficit of 3% of GDP for the next two years, the country achieved a balanced budget in 2023. This achievement was driven by robust revenue generation, supported by one-time factors like income from economic citizenship and EU donations.

A few days later, the government raised $750mn from its first US dollar bond issue, above its initial plan for up to $700mn amid significant interest from investors totalling $4.6bn.

Challenges loom 

Despite the positive momentum for EU accession and Montenegro’s improved finances, the DGAP memo warns of challenges ahead, mainly related to domestic politics. 

The coalition government, led by PES but comprising diverse political factions, faces the delicate task of maintaining cohesion. 

A new rift has opened up between Spajic and President Jakov Milatovic, who recently quit the PES and criticised Spajic’s government. However, the report says, “Despite the new feud between them, the current parliamentary majority is holding and looks more lasting.” 

The report also addresses concerns related to the inclusion of MPs from ZBCG, due to take place within a year assuming the coalition lasts. The party and its leader Andrija Mandić, now Parliament Speaker, were staunchly pro-Russian and against Euro-Atlantic integration. The authors note that ZBCG has committed to the government’s foreign policy, including 100% alignment with the EU on sanctions against Russia, and Mandić is “acting as a constructive player”. 

Looking ahead, the report says, “the biggest risk is posed by the looming reorganisation of [the] cabinet”.

“The real test will come with the inclusion of ZBCG’s ministers in the cabinet. This, in turn, will also increase the indirect influence and spoiler potential of Belgrade – and perhaps also Moscow – over further developments in Podgorica,” it says. 

“Due to accumulated frictions, it might take place very soon and, to balance the strengthened role of ZBCG, also involve the Bosnjak Party (BS), the national conservative party of Montenegro’s Bosniak minority, joining the government. One of the political casualties of the reshuffle might be the current minister of justice, Andrej Milovic, who has already been excluded from the PES,” the report adds. 

“A lot will depend on Spajic’s political clout and learning curve. It seems that his government has bought time at least until the summer to consolidate its ranks and deliver results in the EU track as well as on the economy and public finances.”