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The Atlantic Council of the United States

From Podgorica to Brussels: Montenegro on the Road to Europe

Robert Gelbard,
Gelbard International Consulting

Damon Wilson,
Executive Vice President,
Atlantic Council

Igor Lukšić,
Prime Minister of Montenegro

Tuesday, October 11, 2011
Washington, D.C. 

Transcript by
Federal News Service
Washington, D.C.

DAMON WILSON: Good morning. My name is Damon Wilson. I’m the executive vice president here at the Atlantic Council. I want to welcome you to the council today for this Global Leadership Series conversation with His Excellency Igor Luksic, prime minister of Montenegro. I am particularly delighted to welcome the prime minister to the council for his first address in Washington about its path – Montenegro’s path towards Europe – as prime minister.

I’ve just returned from Montenegro myself this last weekend, where I participated in a third-year running strategic retreat on Montenegro’s integration prospects, its aspirations to join NATO and the European Union. I’ve had the opportunity to hear about the tremendous work the prime minister is doing, and so I’m so glad that we were able to offer you a more public venue here in Washington to deliver your message to this audience.

It was at one of these retreats along the beautiful Montenegrin coast that I first had the opportunity to meet the prime minister when he was serving as finance minister. It was clear then that you would play a critical role in Montenegro’s transformation, and you’re doing that today. I’d also like to thank Ambassador Bob Gelbard, with Gelbard International Consulting, for supporting the council’s work on Southeast Europe and for helping to make today’s event possible.

I couldn’t think of a better day for the prime minister to deliver remarks entitled “From Podgorica to Brussels: Montenegro on the Road toward Europe.” Yesterday, the prime minister had excellent meetings here, including with Vice President Biden and Secretary Clinton, to discuss Montenegro’s path towards Europe, especially its candidacy for membership in NATO.

While critical work remains to be done, Montenegro is well positioned to become NATO’s newest member. And today the European Commission released a major progress report on Montenegro, in which it declared Montenegro is, quote, “now ready to begin to open accession negotiations.”

Montenegro’s progress is not by happenstance. It’s the result of political leadership and tough decisions. Having restored its independence only five years ago, Montenegro has been unambiguous in its choice to be part of a Europe whole, free, and at peace. Mr. Prime Minister, you can be proud of the fact that you are leading Montenegro so decisively and quickly to Europe.

Today’s event is also part of the council’s program on completing Europe. Our “Completing Europe” program is premised on the belief that despite the economic and political crisis gripping Europe, the United States has a role to play – a critical role to play – in helping the nations of Southeast Europe who commit to free markets, democracy, and the rule of law to join the great institutions of the West – that is, NATO and the European Union.

So it’s with great pleasure that I welcome Ambassador Bob Gelbard to the podium, who will introduce the prime minister. Ambassador Gelbard is not only a good friend and colleague; he’s an active board director of the Atlantic Council.

Ambassador Gelbard has also been deeply involved in the council’s work on the Balkans, drawing from his experience as President Clinton’s special envoy – special representative to the Balkans from 1997 to 1999. He has also served as U.S. ambassador to Bolivia and Indonesia, and as an assistant secretary of state who focused on rule of law issues. He’s now the president of Gelbard International Consulting. Bob, the podium’s yours.

ROBERT GELBARD: It is really a great honor and pleasure to introduce Prime Minister Luksic. I’ve had the privilege of being engaged with Montenegro and the entire region of the Balkans since 1995, when, obviously, it was a very different place. I first became involved in Montenegro at a time when, as the prime minister said just a few minutes ago, it was the Benghazi of the Balkans.

It was really an island of resistance, in many ways, and progressive thinking, in terms of what was going on in that region. And during the period from 1997 through 2000 or so, it was an area that was striving to meet Western ideals.

I had the pleasure of meeting the prime minister a number of years ago. He was already a star. He is now, I am told, the youngest head of government in the world. Can that be true?

PRIME MINISTER IGOR LUKSIC: (Off mike, inaudible.)

MR. GELBARD: He may be young in years, but he is old in wisdom. When I found out we were going to have this session, and I was asked to introduce him, I went to a Montenegrin friend of mine who is in Podgorica, and I asked what I should be saying about Prime Minister Luksic.

And here’s what I was told: He represents the new Montenegro. He is modern; he is educated. He is internationally oriented. He is focused on economic empowerment of Montenegro, emphasizing infrastructure to attract foreign direct investment. He is proactive in strengthening positive interdependence and establishing new regional cooperation in the Balkans. He’s creating change by including younger generations in the public conversation in Montenegro.

And he is one of the great Balkan – one of the first Balkan leaders to have his own blog and to have a Facebook page. And finally, he is a poet. But of course, he’s also an economist, which I really like, too. It is really a great honor to introduce Prime Minister Igor Luksic. I know you will be extremely interested in what he has to say. Thank you. (Applause.)

PRIME MINISTER LUKSIC: Thank you, Ambassador. Ladies and gentlemen, I’m greatly honored to be in the position to talk to you today, at the Atlantic Council. But let me start by recalling our first meeting, which I’m not sure Ambassador Gelbard would remember.
But it was back in March 1999. I was part of the visitors program. It was my first ever trip to Washington, and it was seven of us coming from the Montenegrin foreign ministry. And it was in a dramatically different context. It was on the eve of the NATO campaign over Yugoslavia, which Montenegro was part of at that point. It was also about Kosovo.

Twelve years ago – twelve years afterwards, I think we’re talking about a different Montenegro. And I’d like to thank you personally – I’d like all of our friends in the United States that have helped Montenegro get into the position to be here today at the doorstep of the European Union, at the doorstep of the NATO because that’s what really is the ultimate goal of our country and everything we’re doing, we’re doing actually for the purpose of making Montenegro part of the Western world, a country that will share fully Western values.

That’s why it is incredibly important the news that have come from Brussels, and it’s indeed quite a nice coincidence that I’m actually in a position to talk to you today in Washington about our achievements in Europe because I believe it is Euro-Atlantic axis which actually presents the essence of the Montenegrin foreign politics and foreign priorities.

Therefore I’d like to – I’d like to draw your attention to what we’ve been doing in past year or so to deserve the accession talks recommendation by the European Commission. I think it is important for another reason. I think it is important to tell about that in more details because it’s clearly compatible with our – another foreign priority: It is actually completing Europe. It is actually our goal to be part of the NATO as I believe countries in our region, in Western Balkans, should share that goal. It is not quite so at the moment; it is not that all the countries share both goals, but I hope that situation will change in time to come because, in Western Balkans, it is essential that we all coherently move towards both of the institute – both of the integrations, and it is the – that the final contribution to the peace and stability and security in our region.

Therefore I’d like to – I’d like to draw your attention to what we’ve been doing in past year or so in order to respond to those seven benchmarks that European Commission set before us a year ago.

It was about supervision of Parliament, of the executive office, and we had to bring about the new elections law in order to make it fully in line with the new constitution. It sounds quite a tactic – quite a technical and measurable indicator to pass a law. It shouldn’t be so difficult. But at some point, it appeared to be difficult because our opposition wants to make a deal over some other issues that are very important for Montenegro. It was the language – basically political language deal of the educational (sic) language.

It may sound a little bit absurd, but in Montenegro there is people who speak Montenegrin, there is people who speak Serbian, there is people who speak Bosnian, people who speak Croat, there are of course people who speak Albanian, but it is not a South Slavic language, but other four are South Slavic languages. And it’s basically the same language, but there is fundamental human right to have to respond to, and there was a certain need to discuss over that issue, which is very important. And it – there was a need to find a solution which will be in a – which will be appropriate with regards to our constitution. So we had a dialogue.

And actually I think the benefit we had of the elections law is that finally we passed it through the Parliament. We responded to one of the benchmarks; but as a positive externality of the process, we showed that in Montenegro, in Western Balkans, political leaders can find a solution through dialogue over most difficult issues. And I think it is a – it is a good example, not only in case of Montenegro; it is a good example for the region.

Secondly, it was – it was a challenge to continue with the improvements of the public administration. Our public administration obviously lacks administrative (?) capacities. We have to work to make it – to improve the situation because, later next year, when we enter the real accession talks to the European Union, it will be a lot more sophisticated, a lot more technical, a lot more statistical phase of our integration. We’ll have to improve administrative capacities. Therefore we’ve had to pass new piece of legislation; we’ve had to accommodate for new procedures, new practices, in order to make it as efficient a public administration as possible. Given that we are a small country, it makes it even more difficult because, in the process of European integration, you need to have all those sort of institutions that even – that other big countries have. It’s just that you have to be more efficient and more effective in producing – in producing adequate outcome.

Rule of law – that’s one of the most critical benchmarks, not only for Montenegro. It is one of the most critical ones for all the countries in the region. There’s been a wide scope of activities – in order to respond to the rule of law, in order to respond to the need to combat organized crime and introduce anticorruption policies, and I think we’ve also showed quite credible efforts in doing so. With regards to the rule of law, we have even – we have even gone so far to amend the constitution, and we are right now debating the amendments to the constitution to place independent judiciary as strong as possible based on the Venice Commission’s recommendations. But there is also – there is also a passage of several new pieces of legislation, which will make it more transparent, more effective, more efficient – court procedures – and there is whole set of activities to improve the way our system performs at operative level.

There is short-term priorities and long-term priorities. Of course, in all of these activities, we are at every moment aware that we are not going to solve the problem of the organized crime for good by only doing what we’ve done in the past several months. We’re not going to weed out corruption all of a sudden because it is something that – it’s not so easy to weed out. And in all other benchmarks, more or less the same. It’s just that what we’ve tried to do is to show credible efforts that our institutions could tackle all of those problems, and that’s why we have managed to convinced European Commission to acknowledge that and ask European Council to approve the recommendation to open accession talks.

I’m thankful to the – to the American administration because American administration through various programs have – has been helping Montenegro building administrative capacities in all these aspects. I’m thankful for the cooperation we’ve had in battling organized crime because it is through regional and international cooperation that we were able to exchange important information in order to cut certain recent attempted illicit trade, to assail certain criminal groups, and also to bring them to justice. So, therefore, those activities will continue because that’s the only way it can be.

We have reached out to the civil sector. We have reached out to NGOs. We have managed to create an atmosphere of cooperation. Every piece of political system has its role: Government is there to govern; opposition is there to criticize; civil sector is there to be a partner and, to some extent, to be a watchdog; media is there basically to be a watchdog. So civil sector is there to help, to resolve a lot of problems that could be resolved in a joint activity and, through the process, I think we have – we can identify a number of people who could later on help our administration to navigate through the accession talks we’re going to have because some people that belong to civil sector could be very credible partners in the – in negotiating certain chapters with European Commission and that’s the intention we will have: to introduce as many people from the civil sector, from universities, people with specialized knowledge because that’s what we’ll need. We’re a small country, and we cannot afford to waste any human resource.

We have also reached out media. Montenegro has joined the handful of countries – a dozen of countries, rather, that has excluded defamation from the criminal code. Of course, there were opponents to that decision. I think very strongly that it was necessary move because, at some point, we have to show strength to move or to cross certain lines of traditional – of traditional behavior in Montenegro.

That doesn’t mean, of course, that we have sorted out all the problems by only excluding defamation from the criminal code. I think there is more to be done in terms of the freedom of expression, in terms of freedom of speech, and that’s important, and we will continue supporting free media. At the same time, what I’m advocating for is that – is the need for the media to gather around and set a self-regulatory body. That’s the only way to introduce more professionalism, more standards in reporting to make it really a sustainable – a sustainable role of the media community in any democratic society. So we all have to understand that we have to work to improve the way we perform. That’s the only way it can be.

And last, but definitely not least, benchmark was related to the human rights. Human rights in terms of policies – antidiscrimination policies, and the need to resolve the legal status of some people, who are internally displaced people actually, that moved to Montenegro as a consequence of the earlier troubles in the region and most of them belong to Roma population.

So by doing that, by concentrating on those activities, we have improved our legislation, we have also set up certain mechanisms, certain vehicles that will help monitor the human rights in – issues in time to come, and we have also – we have also invested a lot efforts to help those Roma population, not only resolve the legal status, but by making simple gestures, introduce them into the system. My office has employed one of the young talented Roma people and I think we need to offer that chance to all of them. That’s the only way to make those vulnerable groups part of the system, part of the administration, and that’s what it is about, when we’re talking about European values, when we’re talking tolerance, when we’re talking about providing people with a chance.

All of this I’ve explained in a – in a bit more details because I believe some of these benchmarks are overlapping and are very compatible with another foreign priority. It is NATO. I believe that the sooner Montenegro gets into the NATO, the better – the better for Montenegro because it will be a final contribution to the security in Montenegro, but it will be extremely positive example for the other countries in the region that we have to cherish security, we have to cherish political stability, and it’s not easy. It’s not easy in our region. There is still certain – several open issues, which I will come to in couple of minutes’ time.

So we’ll be focusing on all the necessary reforms we have to undertake in order to reform the defense, in order to reform the army, in order to make – in order to introduce standards, which will make our army compatible with NATO. That’s of course – that goes without saying. But additionally we will further commit to peacekeeping missions. We are already part of the ISAF mission in Afghanistan. It is sometimes difficult to explain to our people why it is important for Montenegrin soldiers to be there in Afghanistan. And it is not only because it is a clear signal that Montenegro is ready to assume all the responsibilities as part of the NATO; it is also our clear evidence that we are ready to assume responsibilities that are expected from every country in the world to tackle global challenges.

It is probably – it is – so it is – it is – it is probably difficult to explain all of this, but what – that’s exactly what we’re trying to do and very recently we passed a new decision to expand our participation in Afghanistan by creating additional room for the people who will be in charge of training, instructing Afghan police and Afghan army to help the security transition move as fast as possible. Two people are already in Kabul, in military police school, two will join them in March and probably, as we’ve been advised, over time as security transition moves, we may be asked to replace soldiers with more instructors, more trainers, because then there is more added value to the process because we are interested to help the very process move as swiftly as possible, of course, knowing all the challenges that the allied countries are facing in that – in Afghanistan.

It is probably more easier – it is probably easier to explain to the people why we should assume some responsibilities in the wider region Montenegro belongs to. I’m referring to the Mediterranean countries. We’re already taking part in certain peacekeeping missions, such as peacekeeping mission in Cyprus. In broader terms, we’re already taking part in Liberia peacekeeping mission, and one thing I also said is that we are ready to take part, if needed, in to the democratic changes in Libya – to help democratic changes in Libya.

We were referring to Montenegro as Benghazi 12 years ago, and since then, we’ve been investing a lot of efforts to democratize our society. So it is not only the army that could – or the officers that could help security transition in Libya, to make it more standardized, to make it more modern, it is – it is also people who belong to the civil sector that could be partner to establishing some of the democratic institutions of the new political system that should arise in Libya in time to come.

And a third obvious priority, with regards to NATO, will be to fight for more public awareness in Montenegro. There is a growing trend of support obviously, according to all the polls, but it is – it is obviously not enough to make it overwhelming support, which I’m quite often telling to my interlocutors, is probably reasonable to expect. Even if you ask people in the member states of the NATO, you won’t have much enthusiasm about it. But I think this is not what we’re talking here about. Actually what we’re talking here about is the need to make certain decisions, which you simply know are good for your country, even if people sometimes would not fully understand, but that’s what leaders have to do. Sometimes they have to fight for the cause which not many people understand and, at the same time, we need to work diligently to try to pass the message as convincingly as possible.

Interestingly enough, when you ask people whether Montenegro will eventually become part of the NATO, 80 percent respond yes. So there is obviously an implicit consent to that. There is no real opposition to that foreign priority, and I think that’s what matters more than simple surface indicators.

So people simply prioritize things differently, and we have to – we have to continue explaining to them, and that’s why part of the government ministers will be visiting several – all the municipalities in the – in the – in the – in the upcoming months in Montenegro to discuss the economy, to discuss social situation in those municipalities, but also to hold public events, to talk more about the need to join security integration as far as Montenegro is concerned. It is – it is quite convincing if people who belong to other portfolios, than being prime minister or foreign minister or defense minister, talk about the need to join NATO and, from the security point of view, not from their own portfolio point of view.

Briefly, on economy, which I believe is quite important, as many people wonder what Montenegro is going to do in European Union if – in times of economic hardship, which I’m trying to explain as I believe that Montenegro should go into the European Union. I’m convinced that European leaders will find solution to weather the economic storm which is – which is about, and I’m sure that euro will survive. And this is not only because of the costs of euro – exit or the breakup of the eurozone; it is also because economy – economic system of European Union has been intertwined so deeply that there is basically no more national economies. It is going to get intertwined even more, and I think that it is only in times of the crisis – global crisis that we have really understood how globalized our economy is and how globalized it will be. Therefore it is important to invest all the necessary efforts to save economies, and I’m hopeful that it will really happen.

But we are concerned. We need to be concerned because some ineffectiveness in decision-making and the fact that Slovakia, for example, yesterday rejected the bailout plan, to expand the other facility is definitely going to increase concerns. Therefore, it – certain decisions have to be made very soon, but in the meantime, what we can do, as a small country that is pretty much interested for the stability in the capital markets is to conduct economic policy which will deserve credits.

I yesterday had meetings with the president of the World Bank; I had a meeting with the program director of – managing director of the IMF, Ms. Lagarde; and I explained basics of the economic policy of Montenegro, which is – which is focused on three pillars.

First pillar is fiscal and financial stability; next is budget deficit should be about 1.5 percent; and we should be able to contain public debt at about 43 or 44 percent of GDP. That sounds quite good, but the problem is that we all walking knife edge. And it is easy to change that situation if there is no access to the capital markets, if there is more recession, if there are big shocks from either selective default in Greece or some other – some other ineffectiveness – sort of ineffectiveness in making decisions. Then it may be a lot harder for the countries.

Therefore, in order to make it sustainable approach, we’ve been discussing possibilities to sort of ensure Montenegrin public finances by providing World Bank’s guarantees to enable us (to) collect more money in the markets, if needed. And also we’ll be discussing possibilities of cooperation with the IMF that help small countries have access to capital markets at some – at some decent cost.

But this is also short term, and I think one of the reasons why the crisis has prolonged is because many people have only talked about the short term. It is also about long term. It is about structural changes; it is about business climate.

The only way to support entrepreneurs is by cutting red tape. Coincidentally it also helps cut possibilities to corrupt administrations, so there is – there is positive externality in attempts to improve entrepreneurship, but that’s exactly what we’re doing. We are relying upon structural agenda, which is sometimes very difficult to – for people to understand, and this is also one of the decisions you have to make though most of the people would not accept, would not – would not accept.

I’ve been watching TV these days when I’m in my hotel room – and normally CNN – and a lot of advertisements is about people protesting to cut – to see their benefits being reduced in terms of Medicare/Medicaid and so on. So it is something that is – you find very difficult to explain to the people, but we have to, and those are – there are two policies: One is pension policy; the other one is labor policy.

We introduced reforms to the pension system last year. We have introduced the retirement threshold to 67, and we have joined the handful of countries that have done so, for both men and women. There is some time to pass before we actually reach that level, but that’s inevitable response to the demographic challenges we face in today’s Europe, and Montenegro shares those challenges. I’ve seen the most recent census indicators. We are – we are an aging country, and we have to respond adequately with the long-term policies – long-term approach. And also the point is to contain pension costs, which are quite high in Montenegro – public pension costs.

Other policy in structural agenda is related to labor reforms. We need to find the more proper balance between flexibility and security, and it is also quite hard to explain to the people why we need more flexibility to the labor market. Why we need more flexibility to hire people, but also to fire people as it is the only way to – not to suffocate small- and medium-sized companies or one of the ways not to suffocate them. So there is the need to be more flexible in the labor markets, and I hope that – rather sooner than later – a new – a new labor law and amendments to labor law will be passed by the Parliament. That’s simply inevitable.

And a third pillar of the economic policy, as I said, is related to business climate. We simply took “Doing Business” report of the World Bank – we tracked those indicators where we do not stand very well and we produced an action plan and followed it. I hope that already this year there will be some progress but I’m sure that next year, actually, as most of the – (inaudible) – legislation will become effective and implemented, will show real progress.

On the – on the region, I’d like to say a couple of things before I conclude my speech. I think that we have a great chance that the whole region will have positive balance in the end. In the beginning of the year many people were skeptical about positive balance in – from the European point of view in our region. Most of the people were not convinced that Croatia could conclude accession talks this year, or if could, then only late this year.

Many people were skeptical that Montenegro could navigate through those seven benchmarks. Everybody was quite desperate about hopelessness of Serbia’s noncooperation with EFT. And there was growing instability and in some of the countries political instability because there is no government still in Bosnia-Herzegovina, unfortunately, and there was growing instability in Macedonia.

But I think we have great chance to turn this year into a positive balance year in terms of the European aspirations of the region. The fact that Croatia has been invited in, the fact that Montenegro has been proposed accession talks be open, the fact that Serbia is getting candidate status country or is – European Commission is proposing so, the fact that there is now more stability in Macedonia, the fact that there are signals that central government in Bosnia-Herzegovina will be set up hopefully soon – but at least entities are being conducted and effecting policies – and the hope to resume technical talks between Pristina and Belgrade, hopefully this week, will definitely be a good, good signal because we have seen changing tides this year.

First half of the year looked promising, then we had deterioration because of the relationship between Belgrade and Pristina, and now, again, after the European Commission’s report, it looks more bright. So I think we need to grab the chance. And I think that all sorts of decisions should not be postponed – should not be delayed. And I hope that European Council will, as soon as possible, make a decision to approve European Commission’s recommendations because it will be a strong impulse for the security in the region, strong impulse for the political stability of the region and it is going to set ground for economic prosperity in time to come.

I’d like to thank you very much for your attention and I hope I’ll have some possibility to respond to questions if there is any. Thank you very much. (Applause.)

MR. WILSON: Prime Minister, thank you very much for those remarks. I think you did a terrific job of helping us understand how far, how quickly and why Montenegro has moved so quickly on the path to Europe in a short period of time. You walked pretty methodically through how Montenegro has meet the European Union’s benchmarks with – talked about with quite a bit of clarity your priorities for NATO reform – to try to meet standards for NATO membership and outlined an economic policy in which you have both policy and statistics that would be the envy of most European countries right now. You spelled out that Montenegro does offer a success story in a difficult region.

You ended your remarks on a positive note about the region and I just want to parse that a little bit more and ask you – you know, if you do – you mentioned how the year started off with some trepidation about where the region was going and, how compared to the beginning of the year, things are a little bit better in that situation. If you recognize, obviously, good progress with Croatia on the verge of moving forward with its EU membership, however, there is a real concern that the type of leadership and policies that you’ve just outlined are not really what we’ve been able to see through many of the other countries in the region.

You know, Serbia’s headed for a bit of a rocky period as it approaches elections. Bosnia, while we have the prospect of government, is still – the opportunity cost of what Bosnia has put it through this year, it’s come at a high price. We have elevated concerns and instability in Kosovo. And frankly, many of us who have been great champions of Macedonia’s move toward NATO and the European Union have been frustrated with the lack of progress in Macedonia as well.

Why is that? How has Montenegro got – how have you put together a set of coherent policies that are having an impact, moving your country forward, and yet there isn’t the quite the same traction throughout the same region – the same pace, the same speed. What explains that and what do you think the impact of Montenegro’s progress will be on your closest neighbors?

PRIME MINISTER LUKSIC: Well, first of all I believe it is because Montenegro did not suffer from the wars in the region. We had an impact, of course. We were also under sanctions which brought about some – I mean, some distortions to the system. But in principle we didn’t have to sufferer from the wars in the region.

Secondly, there’s been a tradition of good interethnic relationships in Montenegro. (Chuckles.) Interestingly enough, president of the World Bank was interested to learn more about Montenegrin history at yesterday’s meeting. So that’s why I took from 30 minutes, which was estimated, to almost an hour – or even over an hour. And he was interested in learning more about the interethnic relationship in Montenegro.

So I was trying to explain that it was the vision of the rulers in the 19th century in Montenegro to integrate them into the country which was expanding (against ?) Ottoman Empire. Prince Nikola – King Nikola of Montenegro, he was actually building mosques, he was restoring churches and so on in order to make those people feel part of Montenegro. All of that helped us weather the storm of the ’90s and even early 2000s.

Additionally, I think we managed to produce a broad consensus of European integration and that’s what also helps enormously. Any government that might think of suspending efforts to move into the integrations – European integration – would be, you know, assailed heavily from all means by – not only by the opposition but by civil sector, by media community and so on. Simply, there is broad consensus that we need to be part of the EU and probably – and through that process manage to share all the values we’d like to share and by making Montenegro really part of the Western world.

And that’s, I believe, what has helped in our dynamics with regards to – with regards to making – or making happen those foreign priorities.

MR. WILSON: Thank you. I want to use the prerogative of the chair to ask one more question and then turn to the audience, so just please catch my eye if you’d like to ask the prime minister a question. But before I do that let me turn to NATO. This is the Atlantic Council. The Atlantic Council was formed 50 years ago by Dean Rusk, Dean Acheson, Christian Herter, in part to help support and advocate for the NATO alliance here in the United States.

And while our mission has evolved, that still remains at the core of our discussion here. You outlined pretty methodically the reforms that your country is going through to prepare not just for the European Union but for NATO as well. But I want to ask you on a more emotional note, you know, you mentioned 12 years after the war – 12 years after a war in which NATO bombs fell on Montenegrin territory, how do you make the case for NATO with the people of Montenegro?

You mentioned some of the polling data, and I think it’s the 40 percent or so around support for membership within the alliance, which is actually on par with what it was in many of the other countries before the joined the alliance. But if you put yourself – help us understand, when you’re doing a town hall outside Podgorica how do you make the case to the people of Montenegro that Montenegro should be the member of an alliance which 12 years ago you were in a very different situation facing them?

PRIME MINISTER LUKSIC: Because I believe that it is – it is actually joining to NATO that helps us maintain the policies we have been conducting in past years. It is actually a lot of our security. People in Montenegro know that we’re living in a region which as a lot of stumbling blocks to go over in terms of security, in terms of politics, in terms of all the changes that we are going through.

And that’s what makes the case viable. In order to, you know, preserve our stability, in order to preserve security, in order to preserve those very good interethnic relations we have and so on and so on, it all makes case of the NATO. And though there are people who are skeptical for this or that reason – some people are skeptical because they belong to elderly people who still remember, you know, the titanic showdown between NATO and Warsaw Pact. There are also people who still remember, you know, the campaign from 12 years ago and so on and so on.

But I think little by little we are building our case and I’m sure that at a certain point it will be the majority of the people who would support it. But at the same time, as I was explaining through the lecture, you know, people are more and more interested for, you know, economic prospects – more interested for jobs, more interested for employment, they’re more interested for those, you know, public services – more individually tangible issues.

And at some point they just leave it to their leaders to make certain important decisions. But I think we are producing a good interaction in those sorts of things.

MR. WILSON: Terrific, terrific. Let me bring the audience into our conversation. If I call on you, please identify yourself for the media here as well. I think I saw from our Polish colleague in the back – very appropriate in your hat as the EU presidency right now.

Q: Good morning. Damon, it’s great to be here again and Mr. Prime Minister, thank you very much for a great speech. I’m Marchi Pesarski (ph), Poland’s DCM (ph). I’d like to congratulate you on what seems to be a very successful visit to Washington. And also I would like to congratulate you on the commission’s recommendation that will start the negotiations talk with Montenegro. I think it’s been a great achievement of your government and an important milestone in their sort of path to the European integration.

And my question will be about European – I mean, the – Montenegro’s bid for EU – for the membership in the European Union. Since Poland is – holds the presidency of the council in the European Union, we have made the enlargement one of our priorities. And we believe simply that it has been one of the most successful European policies that really reshaped the face of Europe.

And also, I think it’s send also an important signal to the United States and the outside world that the European project is far from collapsing and indeed it’s still very – it is very attractive — attracts the attention and sort of inspires a lot of sort of energy and effort to make proper changes. And of course, you mentioned Croatia membership. We are looking – we look forward to signing the negotiation agreement with Croatia this year in Poland. Good news about Serbia.

And so I want to ask you what’s your strategy forward in terms of a – of European integration? What would be your message that you would like to bring to the European capitals – why they should sort of go along with the commission’s recommendation? And by the way, we will keep our fingers crossed for you.

MR. WILSON: And I would add to that, just as you’re talking to your counterparts in European capitals – they’re in crisis. They’re focused on something completely different right now. What kind of response are you hearing? How are they able to even focus on the issue of Montenegro? Give us a sense of that as well as you answer that.

PRIME MINISTER LUKSIC: The rest of the Balkan countries have been reassured every now and again that our European prospective is clear and that we have – I mean, since Thessaloniki Summit in 2003. So there is clear European prospective for the countries. And what we are arguing for is that European Union should not change its approach in terms that – regatta principle is fair enough and that we do not need neither sort of short cuts. The only thing we want to see if that if we are judged positively by the European Commission, which is in charge of producing assessments, then I believe it would be a grave mistake not to take into – not to take that into consideration and postpone certain decisions because something else is on the agenda.

I think we are all, by enacting reforms, by going to – by walking the road we have decided to walk, I think we are all contributing to the European unity. And I think it is Eastern European countries are also the – that play an incredibly important role in the process because you’ve gone through the process in the ’90s and early 2000s. And enlarging process, as I absolutely agree with you, has proven to be one of the most successful European policies.

Therefore, it is necessary to continue with the process and I was very, very glad to see that European Commission is also proposing candidate status for Serbia. I think that’s important. And I hope that European Council will approve that as soon as possible because, again, that brings us to the point after which there is no return. There is no reversibility. And that’s extremely important for the region because I think it’s about time we finished with the rest of Balkans burnings issues. And the only way to do that is by introducing reforms to the system, absolutely, but at the same time recognizing, acknowledging those reforms and letting countries inside.

MR. WILSON: Mr. Prime Minister, let me pick up two questions and take them as a package. Let me turn to Ambassador Obsitnik and to our State Department colleague.

Q: Good morning. I’m Vincent Obsitnik, former U.S. ambassador to Slovakia. I’m not going to comment on the stability mechanism, I’ll let the government do that. (Laughter.) I want to congratulate you on all the great progress you’ve made and certainly, as you know, Slovakia’s history, they made great progress as well in all their reforms and then came foreign direct investment, which is very crucial for them. I think to date U.S. companies have invested probably about $5 billion into Slovakia. And that’s going to be important for Montenegro.

And I’d like to know from you, what do you think are the major areas of investment that foreign companies would be interested in in Montenegro? Where is your competitive advantage? Where do you think that people should start investing in your country?

MR. WILSON: Good question. Let me pick up the second question as well, please.

Q: Hi. I’m Jennifer Gresham (ph) – (inaudible) – Central Europe at the Department of State. And please, my warmest congratulations on your opinion today from the European Union, and thank you so much for sharing this day with us here in the United States and what is a very successful visit. I wanted to applaud you for your leadership in taking Montenegro on this path towards the European Union but more generally for showing the region that political will and leadership can get you where you need to go. And so really, my warmest congratulations and heartfelt thanks for helping our region move forward.

I wanted to also thank Ambassador Darmanovic – point him out in front of the crowd here – that he really is a dynamic envoy for your country here in Washington and I really wanted to thank him for all of his activities and services that he does for Montenegro and for our bilateral relationship. There is a question here. (Laughter.)

The question is, some of the biggest challenges that Montenegro is facing are rule of law issues and organized crime issues. And so you’ve talked about a lot of other issues as well. And I wanted to know more about your strategy for combating organized crime and raising rule of law.

MR. WILSON: All right, so two of the biggest challenges – attracting foreign investment, your comparative advantage and the key issue – the key challenge you have on organized crime and rule of law.

PRIME MINISTER LUKSIC: What – the only way to respond to a crisis is by letting investors in Montenegro. And in past years we’ve had a good record in terms of foreign investments. I’m not actually quite happy about the record of American investments. And I’d like to see more of those. And I believe that all that we are doing to improve the way our systems perform will attract more American investors to Montenegro – to the region.

Currently we are discussing several projects which are in the pipeline and in attempt to diversify economy as much as possible, because I think one of the lessons we have learned from the crisis is that we need to diversify our economies. And even though the Montenegro economy is a small one, and one could probably argue that, well, one or two sectors is fine, I don’t think it is the case. And the more we do in tapping our resources the better.

Therefore we are now – we are now working to give a kick off of certain big real estate development projects which are going to be done with good partners and that would further improve our tourism capacities, because that’s obviously one of the – one of the industries in which Montenegro could have more growth in time to come.

Additionally, it is energy and I would like to encourage all the – all the American investors who have – who are in the energy business to try to look at what is – what is it we are offering. As a country that has significant resources, hydro potential but also (coal-fired ?) potential, and then there is imminent oil and gas tender that should attract investors who might be interested in exploring oil and gas opportunities in Montenegro. I’d like to encourage all of those who have that ambition to come to Montenegro and see what is it we can do.

It – one of very important investments that is going to unfold in time to come is related to putting this interconnecting seabed cable between Montenegro and Italy that would – that is hugely important infrastructure investment that would actually interconnect west Balkans and energy potential, so western Balkans with Western Europe. And we are actually privileged to have that possibility. It’s sort of pipeline, gas pipeline in case of Montenegro, which will definitely turn Montenegro into a possible hub, energy hub and make viable lot of other investments in the region and help other countries have growth in that sector. So energy – we’re looking at energy as a – as a great possibility.

There is obviously the need to further restructure some of the industries. I still believe that certain industries have – such as aluminum, steel, so on have potential in Montenegro turning into – for example, in case of steel, into specialized steel production, or in case of aluminum, by, if needed, changing partner, strategic partner, we could probably access the funds that would be a contribution towards higher aluminum production and other benefits that could come out from that industry.

And, of course, agriculture, food processing – because those four sectors, which need to be underpinned by transport, by other services, financial services and so on, could be the – could be the groundwork for the – for the future growth of Montenegro, which we estimate to be at about – the potential output we estimate to be at about 4 (percent) to 5 percent. Given Europe’s 1 (percent), 2 percent growing potential, it could help us catch up in some two decades to meet a relatively high level of income in Montenegro.

MR. WILSON: You’ve got – you enjoy 4 (percent) to 5 percent now. Is that –


MR. WILSON: – growth – right.

PRIME MINISTER LUKSIC: In response to the need to introduce reforms in the rule of law, as I said, there is wide scope of activities. One is related to constitutional amendments, which we are – which we understand we need to do, and we’re working together with the Venice Commission. In this case, our ambassador is not helping us. He’s helping Ukraine, Egypt and other countries as his involvement is also with the Venice Commission. But we are – we are preparing the amendments, and I hope that we’ll be able to pass it in the course of this year.

Additionally, as I said, we have also passed several new pieces of legislation. So there is an adequate, I believe, legislative infrastructure for everything we need. So we have to turn to improving administrative capacities. We need to turn to implementing – full implementation of those laws and so on and so on.

And in the past year or so, I think we have built a good track record. I’m quite, you know, proud, I have to say, when I talk to foreign officials who come to see me and say, we are thankful for the cooperation in combating organized crime. I learned that from – I heard that from Italian foreign minister, who said that their state prosecutor’s office would have only but compliments for the cooperation. It is through the prosecutor’s office’s cooperation between Montenegro and Serbia that we – that they managed to collect necessary information to start processing some of the cases. It is also through the regional international cooperation that we managed to seize narcotics. Such was the case in Spain or so, Germany. We have improved our cooperation with DEA, with – (inaudible) – with other agencies. And I think that’s what – that’s what really matters.

I think Montenegro has built a credible track record as a country that has capacities to deal with the problem. And we will only continue doing so. I was actually proposing, in yesterday’s meetings, that we might set up even some joint centers of communication – (inaudible) – Montenegro to provide regional response to tackling this problem, because that’s what makes investors encouraged and that would incredibly improve the overall investment perception. And I think we have – we have really made up our minds about that and we’ve shown quite credible efforts.

MR. WILSON: This seems to be the key area where you’ve got work going forward. It seemed at our strategic retreat in – (inaudible) – this past weekend, there was a lot of acknowledgment for the laws that had been passed, the progress and reforming codes, and a real focus on implementation, as you said yourself, as the priority right now.

You mentioned, very interestingly – and I think it’s worth noting – that Serbia’s law enforcement cooperation with the United States is doing a great deal to help Montenegro improve its record in this – in this area of rule of law and combating organized crime, and I think that nexus of cooperation with Belgrade, which has a direct impact on helping your Euro-Atlantic aspirations, is an interesting angle, an important angle to this.

Let me pick up –

PRIME MINISTER LUKSIC: We have also one – we have also a law enforcement agreement which we implement ourselves. And American experts are helping joint investigating team which works under the umbrella of the special prosecutor’s for – office for organized crime and corruption to deal with most difficult cases. They will get training; they will get best experience, and – in order – in order to deal with most difficult cases. And they already started doing so.

MR. WILSON: Terrific.

Let me pick up a last round of questions and begin with Ambassador Kirn here.

Q: Thank you. Mr. Prime Minister, let me join all others in congratulating for good news from Brussels. It is –

MR. WILSON: And I’m just interrupting to let our audience know, the ambassador of Slovenia, Ambassador Kirn.

Q: Ah, ambassador of Slovenia.

It is good news for you, it is good news for everybody in the region because it means that this process is very much alive and that there are countries and leaders who are committed and dedicated to go into the (path ?) of Euro-Atlantic integration.

Now, the true value of Euro-Atlantic integration is when this process is undertaken in parallel. So when it comes to EU, this is good news, and paving the way for accession with EU is good news, as I said.

Now, next year, we have NATO summit in Chicago. One would hope – and that is definitely what Slovenia would hope – that NATO summit will also take advantage of this momentum and make this parallel process of Euro-Atlantic integration also visible in terms of the NATO perspective.

May I ask you, in these circumstances, although NATO summit is still far away and our agendas may be, you know, focused with different issues, but nevertheless, what are your expectations in terms of the NATO perspective that may be discussed at the summit in Chicago?

MR. WILSON: Thank you, Ambassador. If there are no other questions, I may add one last one and give them both back to you to close on.

Your party is a dominant political force in Montenegro and, frankly, faces little prospect of electoral defeat in the near term, I think you could say safely. And in part, this is a testament to the political skills of yourself, your party’s leader. But it’s also – as you go through the process of integration, it’s sometimes a challenge to those – to help understand the nature of Montenegro’s electoral system and its democracy. Could you offer a few thoughts on sort of the role of the political opposition in Montenegro combined with civil society and how that sort of functions to ensure sort of a healthy democratic balance and check within the system? So those two questions will bring to a close –

PRIME MINISTER LUKSIC: On Chicago summit, well, it could be really great if there is good news for Montenegro from Chicago summit. If there’s some good news, I’m sure that it won’t be a mistake. This would be really good news not only for Montenegro; it will be really good news for the region.

Again, I think it is – it is incredibly important to work towards NATO because of the reaching that necessary line that we have to cross, after which I’m sure there is not (a civility ?) of any processes in Montenegro. That’s why it is incredibly important. And that’s why where are focused so much in attaining all those – all those goals.

We have passed recently the Annual National Program, which will be presented to Brussels soon – this month. And by that, we started a new Membership Action Plan cycle. We ended one successfully. We have taken now to have all the suggestions, including most – the most important ones, and we are now dealing with all of those in order to really produce a good MAP cycle that may encourage NATO member-states to provide with some good news for Montenegro.

At the same time, I have to say that we’re not, you know, obsessed with dates. And the Chicago summit may be a good opportunity to encourage Montenegro to continue with the efforts, as I’m sure that at some point in time we will be part – integrated part of the NATO.

I mean, at the same time, eventually, it is only by introduction of Montenegro into the family that northern Mediterranean will be fully covered in terms of the security integration which I think, from the wider point of view of the region in which we’re living – Mediterranean – is quite an important – quite an important achievement. And therefore, it is not that – there is mutual – I would suppose there is mutual interest.

Of course, we’ll be – we’ll be focused on responding to outstanding requirements. There is the need to improve the structure of the military budget, and so on and so on. And I’m sure that the next MAP cycle will be – will be also successful, and may encourage, again, countries that belong to NATO to produce some good news about us.

But again, we’re not obsessed with dates. We understand that it is – it is our priority to focus on reforms. And the results will come – it – like the same, like in case of the European Union. It was up to us to produce reforms, to deliver. And the European Commission has chosen positively. I’m sure it will be the case with the NATO at some point.

On the role of the political opposition, to be honest with you, I agree with you that at this point in time, they don’t seem to be competitive; which in the long run I really believe is not good for the society. I think that we need more dynamism, more dynamics, more modern approach, more productivity from the opposition because – and this is – this is – don’t get me wrong but – it is – for a – for a country which is in process of transition – Montenegro is – or is aiming at concluding transition, it is absolutely necessary to have dynamic political spectrum. And therefore, I think all that we have managed to do in past year or so, or in past years, is also – has also been aiming at improving the way politics is done in Montenegro, in a more transparent and a more accountable way, with more role for the parliament to supervise over the executive office, and so on and so on. That’s the only way it can go.

And therefore, civil sector is, as you’ve mentioned civil sector – I will – I will just reiterate what I said during the lecture. You know, government is there to govern, to do it the best we can. Opposition is to criticize and provide with other sort of solutions. Civil sector should be a partner, and to both basically. And that’s the only way to improve – to improve the state of affairs.

And I think we have taken good road and I think, also, that, in several years’ time, Montenegrin politics will be further strengthened by introducing more dynamism, more competitiveness. I think that’s important. And that’s the only way to really make things happen in Montenegro.

MR. WILSON: Thank you, Mr. Prime Minister. I want to end our conversation on just three points. First, to pick up on what you said about Chicago, Ambassador Kirn’s comment: You’re at the Atlantic Council. In the run-up to Chicago, we really do intend to put more of a spotlight on Montenegro. We continue to – want to continue to work in partnership, because I really believe that Montenegro is NATO’s next newest member. And I actually would like to see us be a little bit more ambitious for what we’d like to do at Chicago.

So it remains a priority for us here at the Council and I think that’s why your visit is important for us to help sort of kick off this public conversation about further enlargement within the alliance, and Montenegro’s specific prospects, because Chicago should be an important milestone.

Second, I just want to echo the ever-effective diplomatic words of Jennifer (sp) – ever the diplomat – in complimenting Ambassador Darmanovic. One of the things that all of us who have worked on these issues in the past have grown to appreciate is when a country like yours is beginning the process of integration, beginning the process of moving towards particularly NATO but also the European Union, that your representative, your face in Washington is a critical component to that, helping to shape the debate here. You’ve sent one of your best to Washington. We’ve had the pleasure to get to know the ambassador well, to work with him closely. He’s been a terrific advocate for your country, but also through his work on the Venice Commission, helping to demonstrate what Montenegro has to offer a broader community. And so thank you for that, Srdjan – thank you, Ambassador Darmanovic.

MR. : And don’t forget the chess team from Washington is helping also. (Laughter.)

MR. WILSON: That’s right. That’s right.

And finally, just a word of thanks to you. I think your visit to Washington is a reminder how political leadership matters. The decisions that individuals take about their own countries have a direct impact on the trajectory those countries take. And at a time when we really are worried about the West, the trans-Atlantic relationship, the future of the eurozone, we’re worried about southeast Europe, I’m not all that worried about Montenegro right now. You’ve got work to do, but you’ve demonstrated through the talk today, you have a clear agenda and you’re focused on tackling those issues one by one. So thank you so much for coming to the Council today sharing your thoughts with the audience.

PRIME MINISTER LUKSIC: Thank you. Thank you.

MR. WILSON: We appreciate it. Thank you. (Applause.)