Montenegro Raises Minimum Wage to 1,000-1,400 Euros

Montenegro’s Prime Minister Milojko Spajic announced on the evening of September 17 that starting in January, every wage in the country, in both the public and private sectors, will rise under a new government program called the Euro Model, approved by the cabinet at a session held the same day in Podgorica. For Serbia, the decision matters mainly because of regional competition for workers: Montenegro, a candidate for full European Union membership, is now rapidly pushing its minimum wage above what counts as an average salary across much of the region, raising the question of how many young people from Serbia and neighboring countries will start looking to Podgorica as a new place to work.

Under the Euro Model, the net minimum wage for employees with a basic or lower level of education will be 1,000 euros, for those with secondary education 1,250 euros, and for university graduates 1,400 euros. According to Spajic, the program covers more than 250,000 employees. The portal CdM reports that Montenegro’s current minimum wage stands at 600 euros for basic and secondary education and 800 euros for university-educated workers, meaning the increase at the lowest level will almost double it.

Who gets a bigger paycheck starting in January?

Pensions are rising along with wages. According to the announcement, pensions will be adjusted four times a year starting in 2027, the average April pension is expected to pass 600 euros, and the minimum pension 500 euros. Even before the new scheme formally takes effect, every pensioner is due an extra 100 euros this December as a winter bonus. Spajic also said that if social partners accept the government’s request to apply the increase in the coefficient’s calculated value equally to the public and private sectors, net pay for some positions could exceed 2,000 euros.

In his address on the reform, the prime minister had a message for Montenegrins who had left the country:

“And finally, one message for those this reform announcement finds in Munich, Vienna, Dublin, Zurich or Chicago: you no longer have to choose between family and a decent life. Come home.”

Spajic framed the message as part of a broader argument, saying the departure of young people from Montenegro was the result of a “feudal economy of low wages” and that the state now wants to reverse that trend before it loses a significant share of its population, as he said happened to some countries after they joined the European Union.

On how the reform will be funded, the prime minister said it is covered by growth in consumption and employment, a crackdown on the gray economy, an expected return of the diaspora, spending discipline, and measures against organized crime and corruption aimed at seizing illegally acquired assets. By his projections, the budget deficit would run between 4 and 5 percent during the transitional year of 2027, before falling to around 3 percent in 2028, within the Maastricht criteria.

Why employers are calling for an urgent meeting

The government’s decision, made without prior consultation with social partners, has already drawn a reaction from the business community. Filip Lazovic, a representative of the Union of Employers of Montenegro, told RTCG that the process undermined social dialogue:

“That’s not good. If we’re talking about wages that we want to bring up to European standards and stop people from leaving Montenegro, then we also have to talk about European standards that require those affected by such decisions to be consulted before they’re made. And when it comes to a decision on the minimum wage, it directly affects every business in Montenegro, small, medium or large, because each one will have to pay the set minimum wage.”

Lazovic added that it isn’t sound to talk about raising wages without backing it up with productivity growth or a new source of financing. The Union of Employers of Montenegro said in a statement that it is organizing an urgent meeting with Spajic:

“The announcement of the minimum wage increase has drawn enormous attention and concern from the business community. We are working on organizing an urgent meeting with the prime minister, at which businesses will be able to get answers about the announced program.”

According to unofficial information from the broadcaster Vijesti, Finance Minister Novica Vukovic did not vote for the proposal, given that the decision was made at an electronic cabinet session held over WhatsApp. Media reports say the model also calls for scrapping, starting in January, the 10 percent pension and disability insurance contribution currently paid by employees, folding it into net pay instead, and for abolishing the 12 percent mid-tier corporate profit tax rate.

For Serbia and the rest of the region, the question now isn’t just how Montenegro will manage to fund such a steep jump in its minimum wage, but whether neighboring economies, Serbia included, will have to respond with similar moves to hold on to their workforce. Spajic claims the average net wage in Montenegro will soon top 1,400 euros, which he says would put it ahead of Greece, Bulgaria, Romania and Hungary, with the only regional competition he sees coming from Croatia.

No date has yet been set for the Union of Employers’ urgent meeting with Spajic, and Montenegro’s parliament, where the Euro Model has been forwarded for further review, has yet to weigh in on the proposal.