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Speeches - 2001

At opening the money exhibition on December 23, 2001

At passing the Law on Central Bank in the Montenegrin Parliament on March 15, 2001

At opening the money exhibition on December 23, 2001

Dear President, authors of the exhibition, ladies and gentlemen.

It is my honor and pleasure, and a true opportunity on the occasion of transition to Euro as the official means of payment in Montenegro, to be able to review with you here in Biljarda the history of money in Montenegro.

Everything that you will be able to see tonight in Biljarda,  represents the confirmation  of historic facts of our right  to decide on type of money and its use  by ourselves led by interests of citizens and the state of Montenegro.

The money was coined in Montenegro since the second century before new era.  First in Risan, then in Mojkovac i.e. Brskovo, Bar, Ulcinj and Svac but also in Kotor and Budva.

Foreign money was used in Montenegro in some historic periods – greek stater, different Roman, Byzantium  and Venice money, Turkish aspra, arslanija, grosh, Russian rublja, Austrian fiorim.  

This exhibition may convince us that we used to have also our money in Montenegro. Djuradj I  Balsic coined his own money with  emblem of wolf chest and  shield,  and so was the case  with Balsa II (Skadar dinar), Djuradj II, Konstantin Balsic, Balsa III. There are 11 types of money that there are records of, but not many of them were preserved.

At the idea of a banker Carl Rotshield, Petar II Petrovic Njegos  prepared for the production of Montenegrin Perun of which today we have an offprint in red wax.

Before the issue of Princedom money i.e. Kingdom of Montenegro, we had  in circulation Austrian  fiorim, and afterwards  circulation of crown on the golden backing and the foreign currency exchange rate established  by the Ministry of Finance.

Montenegro as the sovereign and internationally recognized state, first as princedom, and later as kingdom, issued its own money Perper meaning sophisticated in Greek language There was total of eight issues of metal, silver and golden coins and three issues of paper money.

Metal, golden and silver money was coined in Vienna, except one issue of silver money that was coined in Paris. The author was Ilija Sobajic, and the engraver Stefan Svarc. Paper money was printed in Prague, Cetinje and Paris. 

Although Perper was supported with the Montenegrin state property and represented the responsibility of Kingdom of Montenegro that was transferred to the Kingdom of Yugoslavia, it was devaluated because, opposite to the real situation, 2 Perpers were exchanged for one dinar.

After that we had common currency – dinar on three occasions, that either failed along with the Kingdom of Yugoslavia or devaluated  in the highest hyperinflation in the world  in 1993, i.e. abandoned  as of the adoption of the Law on the Central Bank after devaluation of 1-33 i.e. 3300%.

In 1999 we were at the crossroads of choosing the crucial decision that was adopted at that time, and a year afterwards the decision was  embodied  into legislation. We observed these past experiences and had in mind  the future of the citizens and the State of Montenegro  and  opted for the currency of the United Europe  whose part  we want to be, convinced that it will not be changed in this century.

I would like to thank you for being here tonight and I invite you to see the exhibition.

At passing the Law on Central Bank in the Montenegrin Parliament on March 15, 2001

Esteemed representatives, dear President,

Writing on banking problems, “Glas Crnogorca” dated October 14, 1884, says:” All these inconveniences would be easily resolved if a well designed  money and credit institute is  established in our country. That institute,  to call it savings bank, National bank, credit union or whatever we like, would be  the regulator  of our  money market, great assistant and benefactor of the entire national work,  initiator of the spirit of  savings and capitalization for our people and its savior in moments of  money need”. 

Far back in 1885, upon the establishment of the Code of the sovereign Danilo I, the rule number ninety was written, that reads: “ Any Montenegrin or Highlander  who as of today wants to lend money  in order to gain profit, has to make a book  before two witnesses, to keep the record of the money lent for profit, and if the book is not made, than the recipient shall provide collateral that will not exceed  20 % of the received amount, and the one who earns more profit, shall be deprived of the principal he wanted to make profit upon and that principal shall  be placed in the national treasury as any other fine”. 

With the adoption of the General Property Code, foundation of banks and savings banks and issue of the nation’s own currency, Montenegrin monetary authority was established and banking system created.  

Dear President, esteemed Representatives,

It has been a long time since then, and historic experience has taught us that Montenegrins felt economic and social progress and welfare measured by basic parameters of economic and social development, when they were able to take political and economic decisions independently and to negotiate on their own future directly with all relevant parties. That was the case when Montenegro was independent state and in the period after the World War II, when, for example, the Governor of the National Bank of Montenegro was equal member in the Council of Governors of NBY as the supreme authority in former Yugoslavia. 

That was not the case in the period between the two world wars when the banking system at the time of the former Yugoslavia failed, and it was not the case at the time of the Federal Republic of Yugoslavia. 

At the beginning of this decade Montenegro transferred its monetary system authorities to the federal level, having as a consequence the following: 

  • The highest hyper inflation in the world measured in million of percentages,
  • Expansion of pyramids like Dafiment, Jugoskandik and Inos and different insurance companies  that deceived  thousands of citizens,
  • non –performance of obligations based on frozen foreign exchange savings  by the NBY and the Federal state,
  • after short –term stabilization at the time of the Governor Avramovic,  new inflation and  devaluation  of the national currency for 4,000%.
  • Constitution of the Federal Parliament in an unconstitutional manner and disabling Montenegro to influence monetary policy through process of the election of the Governor and the NBY Council,
  • Interpretation of the Constitution as requested by the regime, elimination of the NBY Council and Montenegro representative in the Council  as well as in the structure of NBY,
  • Personnel changes led into discrimination of banks and the economy of Montenegro by the NBY and direct damage on those basis exceeded DEM 200 million.  

At the same time Montenegro was discriminated and directly damaged through performance of the Federal budget by tax measures, in the area of customs, foreign trade, insurance and the treatment of Montenegro as occupied area by the so called federal institutions. 

As finals we have humiliating and still existing constitutional changes that place Montenegro down to the level of the smallest municipalities in Serbia, disabling an influence on (beside other things) monetary policy, rehabilitation of the banking system and, what is of extreme importance, regulation of relations with the international financial organizations. 

The Government of Montenegro based upon its constitutional authorities, by decrees and decisions adopted at the end of the last year, undertook jurisdiction over the sphere of monetary and financial system.  With the introduction of German mark as parallel currency, negative trends were stopped and quite obvious positive effects to the economy and the population created. 

Dear Representatives, esteemed President, 

The Law on the Central Bank represents basis for the reform of the financial system that will allow further progress in the process of privatization and rehabilitation of the Montenegrin economy and arrival of quality investors in Montenegro. 

The Law on the Central Bank of Montenegro enables constitution of autonomous monetary system, based on DEM as monetary unit, means of payment and currency for reserves, until the introduction of EURO, creating conditions for the establishment of sound banking system, and along with the Law on Banks, it represents grounds for the reform of the entire financial structure of the Republic. 

The adoption of this Law enables creation of assumptions for involvement into international financial institutions. 

This Law governs establishment of the Central Bank as independent organization, responsible for monetary policy, establishment and maintenance of the sound banking system and efficient payment system in the Republic. 

The Central Bank was empowered with authorities that prevail in banking systems of the market economy. Within those authorities the Central Bank shall:  grant and withdraw licenses to banks in compliance with regulations; regulate and supervise their work; perform and supervise payment system with foreign countries; perform the activity of a banker, advisor and fiscal representative of the Republic bodies and organizations; perform regular macro-economic analysis; render banking services in favor of foreign governments, foreign Central Banks as well as in favor of international organizations and other international institutions in which the Central Bank or the Republic  take part; take deposits from banks, state bodies and organizations, domestic and foreign banks, international  financial institutions and donor organizations etc. 

For the efficient performance of functions that the Central Bank is responsible for, it was given the authority to prepare and take part in the preparation of the relevant solutions in the sphere of monetary, foreign exchange and banking system that are in function of performance of its authorities. 

Furthermore, the Central Bank was provided with the possibility to give recommendations to the Government on the occasion of creation of the Republic of Montenegro economic policy, thus achieving necessary cooperation between  these two institutions in harmonization of monetary policy and other segments of the economic policy. 

The Central Bank is managed by the Council whose most significant authorities relate to determination of politics in compliance with the Bank functions; adoption of regulations, recommendations and orders issued by the Central Bank; making decisions upon applications for licensing and withdrawing licenses to banks, financial institutions and payment system, establishment of general guidelines for the operation of the Central Bank etc. 

With regard to authorities they are entitled to, the Council members may only be persons with well-known integrity, who will perform their duties in the Central Bank in such a manner as not to put their own personal interests or interests of parties related to them before the interest of the Central Bank and its clients. 

In the course of operations, the Central Bank is authorized to grant loans out of its own funds to commercial banks for the maintenance of their daily liquidity purposes, under conditions prescribed by the law, but it is forbidden to grant such loans to the Government or other legal entities or private individuals. The Central Bank handles foreign exchange reserves, except those that commercial banks are in charge of, and performs supervision over implementation of regulations on foreign exchange operations. 

The provisions of this Law indicate to the recognition of the need for payment system reconstruction, i.e. rationalization of the previous functions of the Institute for calculations and payments. 

The supervisory function of the Central Bank shall provide for financial discipline by supervising not only legal aspect of licensed banks and financial institutions operations, but their credibility as well. If it comes across certain irregularities in operations of commercial banks, the Central Bank shall implement adequate measures including liquidation. 

Due to a possibility of maintaining unrealistic book entry evidences by the banks, the Central Bank may by means of implementation of international accounting standards request the banks and financial institutions to provide information on their operations  and financial position. 

Though the Central Bank is independent and self-governing, it is anticipated that audit of statements, records and balances shall be performed by an internationally recognized independent auditing company, while  the Inspector General shall be in charge of the control of operations on the level of the Central Bank. 

Dear Representatives, esteemed President, 

Additional to the fact that the adoption of this and other laws shall enable the continuation of the reform process and development of institutional structure   corresponding the market economy, it will also enable the establishment of prerequisites for integration processes with closest neighbors in the regional involvement into European and transatlantic structures.



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