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Previous Letters: 

Blazo Sredanovic


At the invitation of the EU High Representative Javier Solana, experts of the Working Group on Economic, Social and Monetary issues of Montenegro and Serbia/FRY took part in a seminar on the key principles of the functioning of the EU in the fields of the common/internal market, foreign trade, customs, taxes and monetary policy. 
The High Representative Javier Solana did not participate in the seminar, although such a possibility had been announced. 
The Seminar was organized in continuation of the three rounds of talks, which resulted in the well-known differences presented to the general public through a joint report. 
The discussions were constructive and focused on the requirements and criteria for drawing closer to the EU. It has been generally agreed that this is a long-term process, which will take some ten years. The EU representatives have reiterated their well-known views regarding the option that they believe ensures a faster and more efficient way to integration in the EU. 
The representatives of Montenegro put forward arguments backing their view that federation with Serbia is not viable. Firstly, the high costs, i.e., a minimum of 150 million Deutsche Mark a year, which would amount to some 1.5 billion Marks in the period until a possible membership in the EU. Such funds are not available either at the federal level, or from the EU. These are the costs that the citizens of Montenegro would pay in order to maintain the federation. 
In relation to the discussion on the internal market, data have been presented regarding the exchange of goods between Montenegro and Serbia. Montenegro sells 10.6% of its exports to Serbia, while Serbia sells only 4.6% of its exports to Montenegro. It is evident that both Montenegro and Serbia sell their goods and make their earnings in other markets, which confirms a need for wider regional integrations. This is also one of the key requirements made by the EU. 
The talks also addressed the issue of customs policy. The EU representatives have insisted on a single customs policy. Following the explanation that the average tariff rate in Montenegro is 3% and in Serbia it is 10.5%, that Montenegro has no need to protect its economy by high import duties, and the fact that Montenegro has its own Customs Law, the EU representatives did not have any additional arguments. 
The Montenegrin expert team expressed its disagreement with regard to the reservations of the EU representatives relating to the introduction of the Euro in Montenegro since returning to the dinar and to a single monetary policy (which would create the possibility of printing money), would be disastrous for the economy of Montenegro. This would annul the effects of the economic and banking reforms and slow down the restructuring of the economy, the growth of productivity and growth of investments. 
It has also been emphasized that Montenegro has already for five years been functioning as an autonomous and independent economic system, that many institutions indispensable for development of a market economy have already been formed, and that key economic laws have been enacted 
The representatives of the Montenegrin delegation insisted on a faster and stronger regional integration, emphasizing that this is the only way for a faster economic transition and preparation for inclusion in the EU.
The Montenegrin expert group understands that it is the interest of the EU to start talks with Montenegro and Serbia in one package within the FRY. However, the expert group cannot accept such an insistence by the EU representatives, because it is not possible to ensure an equal position for Montenegro and protection of its strategic development interests within a federation. The EU, which was established as a union of independent states, can provide a good model for resolving the relationship between Montenegro and Serbia. 

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