Igor Lukšić

Igor Lukšić was appointed Minister of Finance in 2004.[10] As such, he oversaw the final disassociation of state finances that had started long before with the federalization of Yugoslavia. The robust post-independence boom made it possible to very effectively consolidate the budget (a record surplus of 7% of gross domestic product was achieved in 2007) and to drastically reduce national debt.

Igor Lukšić as Finance Minister defined himself as a pro-business reformist, and many times expressed that he believed in the power of entrepreneurship and private property. He advocated privatization in order to save and modernize jobs in Montenegro.[11]

As a small and open economy, Montenegro was hit hard by the global late-2000s recession of 2008. The income side of the budget practically collapsed with the slackening of tourism revenues. The Montenegrin government had to increasingly rely on foreign sources to finance its expenditures. The issuing of Eurobonds in September 2010 was considered by the government a major success and proof of the confidence in Montenegro's finances, as the demand by investors for Montenegrin government securities was three times as high as the supplied amount. The Ministry of Finance under Igor Lukšić issued ten-year bonds at a value of 200 million Euros at a fixed interest rate of 7.85 percent.[12] Rumours appeared many times that the Ministry of Finance was also seeking an agreement with the International Monetary Fund, but government officials, including the minister himself, always talked about it as a possible opportunity but as something that should be avoided if the possibility remains,[13] and with successful issuing of Eurobonds, the government was able to avoid this possibility.

Inauguration of Igor Luksic. To the left: Filip Vujanovic, President of Montenegro

Igor Lukšić was long seen as the designated successor of former Prime Minister and one-time Head of State Milo Đukanović. When the latter resigned his office despite winning the election in 2006, Igor Lukšić was his first candidate as his successor (Đukanović remained the chairman of the Democratic Party of Socialists, so still had quite an influence over the nomination process). However, in the end the party nominated Željko Šturanović as Prime Minister, which was seen as a compromise between Đukanović and Svetozar Marović, another figurehead of their generation in the DPS. Igor Lukšić retained his office as Finance Minister in the new cabinet, and when Sturanovic resigned two years later due to health problems and Đukanović took over again, Lukšić was elevated to the rank of Deputy Prime Minister as well.

Due to international controversies around him, the premiership of Đukanović was seen as a major obstacle in the EU integration path of Montenegro.[14] He eventually resigned four days after Montenegro was given official candidate status on 21 December 2010.[15] The DPS unanimously nominated Lukšić as Đukanović's successor.[16] The Parliament of Montenegro took a final vote on the matter on 29 December 2010. With Lukšić as prime minister, Đukanović will remain DPS party leader as he did during Šturanović's government.[17]

Prime Minister Lukšić, then the youngest prime minister in the world,[18] faced a double challenge: modernizing society and implementing reforms, while maintaining the political stability of the country and respecting traditions set by previous governments at the same time. As a result, regardless of his statements that his decisions were independent of the former President and Prime Minister of Montenegro, Milo Djukanovic, many still regarded the latter as a figurehead, and argued that the country was still being run from behind the scenes by Milo Djukanovic.[19] Lukšić responded to the question from Reuters news agency, in his first interview to the foreign media after his confirmation as Prime Minister, saying, "I am in charge. I will always, when I find it necessary, consult with many people ... But I would not accept doing this job if I had to bear all the responsibility and if the decisions were made somewhere else."[20] Lukšić's political credo was to govern by clear, precise and applicable rules, with the objective of leaving less room for discretionary decision making and corruption. While he said, "Montenegrin society has relied throughout its entire history on strong personalities", his main aim was to create trust in political institutions instead.[21] One of his top priorities was to achieve Montenegro's membership of the European Union as soon as possible. To speed up this process he demanded changes in values in society, and more individual initiatives than state interference. In his inaugural speech, he stated, "The Government cannot and should not be the solution to all of society's problems and shortcomings; it should be accountable and efficient in carrying out its constitutional and statutory obligations. I will require everyone to be accountable for his part in the task, so that we all individually and jointly contribute to Montenegro’s overall development."[22]

Igor Luksic with First Lady Michelle Obama and President of the United States Barack Obama

While as a member of the ruling Democratic Party of Socialists (DPS) he is officially a social democrat, several have observed that his views on economic policy are rather liberal. Furthermore, among his political ideals one could see more politicians from the right, than from the left. Besides the former British Prime Minister Tony Blair, Lukšić has mentioned the current British Prime Minister David Cameron as a respected contemporary politician (he also "likes" David Cameron on Facebook[23]) and the former "Iron Lady" Margaret Thatcher and Winston Churchill are among his historical political models.[24] Besides Lukšić's personal preferences, a reason can be the strong influence of the "neoliberal" economical school of Professor Veselin Vukotic in Montenegro at the University of Donja Gorica. Professor Vukotic was a teacher of both Milo Djukanovic and Igor Lukšić, an important figure in putting together the privatization programmes in Montenegro. (Igor Lukšić is a lecturer of economics at the University of Donja Gorica).

At the same time, Igor Lukšić has used more "patriotic" messages than most members of the DPS, who show a much more technocratic attitude to politics. Unlike his predecessors, Lukšić emphasized his use of the Montenegrin language, and in his policies he tried to represent interests of the "Montenegrin nation".[25]

Igor Luksic with Štefan Füle, European Commissioner for Enlargement and European Neighbourhood Policy

One of the government's top priorities was to achieve Montenegro's membership of the European Union as soon as possible. As the cabinet was inaugurated right after achieving candidate status, it was expected that it would speed up the integration process and implement the remaining reforms needed to get a starting date for the accession negotiations. Upon forming his government, Lukšić decided to merge the Ministry for European Integration with the Foreign Ministry, and charged the newly appointed minister Milan Rocen "with providing continuous communication with Brussels, as well as with other departments in the government and other social entities".[32] The Prime Minister pledged that he would personally coordinate all activities that are aimed at implementing the reforms required for EU accession.

Another focal point was international cooperation on security issues: the Lukšić cabinet was devoted to NATO membership for the country and maintained a Montenegrin presence in international peacekeeping missions, particularly in the Afghanistan ISAF mission, the EU operations in the waters off Somalia as well as in the UN Mission in Liberia. In December 2015, Montenegro completed the Membership Action Plan of NATO and was invited to begin accession.

The Government of Montenegro recognised the Libyan National Transitional Council on 21 July 2011. As a candidate country, Montenegro also signed the statement condemning violence in Syria on 18 August 2011.[33]

Igor Luksic at Sveti Stefan

Igor Lukšić started his tenure by expressing that he was trying to phase in a new kind of governance, by applying a more deliberative approach to politics. During the first 100 days of his cabinet he organized meetings with representatives of different groups within Montenegrin society, including the opposition parties, NGOs, various minority and church representatives.[34] The approach was welcomed quite warmly.[35] The NGO sector also welcomed the decriminalisation of libel, which took place in June 2011 under the Luksic government, and was regarded as a measure that improved the freedom of the press in Montenegro.[36] The part of interior policy regarded as most important by international observers was the fight against corruption and organized crime, as problems with criminality are perceived as the biggest hurdle on Montenegro's way toward EU membership. Lukšić initiated some anti-corruption measures. The cabinet strengthened the powers of the National Commission which was established to deal with the issue; one-stop shopping was introduced in offices to cut red tape and minimize the opportunities for bribery; several core laws were updated to comply with GRECO and European Commission recommendations. However, while Lukšić emphasized that everyone was equal under the law, he continued to state that he believed that no member of the previous or current government deserved to go before the prosecutor's office,[37] which discouraged those observers who expected that the alleged corruption issues of his predecessors would be prosecuted. Still, the fights against corruption and organized crime did gain momentum after Lukšić took office. The arrest of the mayor of Budva and his accomplices (among them the brother of former Deputy Prime Minister Marovic) marked the first case of a high-level politician facing corruption charges in Montenegro. In terms of organized crime, several successful investigations in cooperation with other countries were carried out in 2011, dealing a heavy blow to drug trafficking, money laundering and human trafficking in the region.

A few weeks before the inauguration of Igor Lukšić, Montenegro experienced the worst flood of its modern history. Rebuilding efforts were alleviated by flood relief donations from nine NATO countries and Russia,[38] and the first-ever online fundraising campaign in Montenegro, also promoted on the then-debuting Facebook page of Prime Minister Igor Lukšić.[39]

In 2011, Montenegro would have seen its first Gay Pride Parade in its history. Prime Minister Lukšić pledged his support for the event, stating that society had to show that it is mature enough to accept differences. However, his own minister for minorities and human rights made a controversial statement that if there were homosexuals in the country, "it is not good for Montenegro".[40] Despite official support for the event scheduled for 31 May, the organizers eventually called it off after two alleged attacks against gay persons in Montenegro. At the beginning of September, a milestone international conference was held on gay-rights issues and gender equality, with the cooperation of the American Embassy.[41][42] Though the conference was attended by leading experts across the globe, it was boycotted by most of the NGO sector, which demanded the dismissal of Minister of Human and Minority Rights Ferhat Dinosa, more substantial public support for the Pride Parade and a stronger stance on violence against members of the LGBT community.[43]

In 2011 the government of Montenegro conducted the first official census since regaining independence in 2006. Though observers found both the legal background and the whole process of the census in line with international requirements, the census sparked quite a political turmoil as opposition parties suggested that political pressure was being applied on citizens in order to tailor the census results regarding the ethnicity figures of the population.[44] However, the census took place without any upset, and numbers did not reveal any substantial shift in figures that would have indicated a fraud.[45]

In July 2011, Lukšić hosted a reception in honour of the Montenegrin Royal Family, the House of Petrovic-Njegos, in Cetinje. The event celebrated the adoption of the Royal Family Law, initiated by Lukšić's cabinet, to regulate the status of the descendants of the House of Petrovic . Prince Nikola welcomed the adoption of the law, as it enables the Royal Family to participate in European processes in Montenegro.[46]

One of the largest remaining legal reforms the Lukšić cabinet had to put in motion was the harmonization of the Election Law with the new Constitution adopted in 2007. However, it required a two-thirds majority in the national assembly that the ruling coalition lacked. Opposition parties were in a position to blackmail the government, demanding that the Serbian language be officially named the second official language of the state (the first being Montenegrin), and that it be included in the school curriculum. This distinction was more important politically than linguistically, as it reflected the difference between pro-Serb and pro-independence identities within Montenegrin society. The stand-off that blocked the efforts of the government to give a boost to the European integration process was so severe, that Prime Minister Lukšić even mentioned the possibility of holding an early election to resolve the current situation,[47] but this move was widely seen merely as tactical by the Montenegrin public.[48] Compromise was finally reached in early September, when the parties agreed upon the name of the subject taught in class as "Montenegrin-Serbian, Bosnian, Croatian language and literature". The Election Law deadlock was widely seen as the first serious political conflict during the tenure of Igor Lukšić, and although at first he was seen as unable to show enough strength, but the final compromise had his position strengthened.[49]

Igor Luksic attending a panel discussion at the World Economic Forum in Vienna, discussing economic policy in the crisis, June 2011

As Prime Minister, Lukšić remained a firm supporter of privatization and foreign direct investment in the Montenegrin economy, as he saw this path as the only one leading to a rapid modernization of the country.

Upon inauguration, Igor Lukšić said his cabinet would "place special emphasis on growth in the energy, tourism and transportation sectors, with particular attention on development in the northern part of Montenegro" and would “continue with energy efficiency promotion, becoming more dependable on renewable energy resources.”[50] The first task is, however, to bring the economy back on track after the crisis. Igor Lukšić stated that the economy has a long-term growth potential of 5% per year, and stagnation has been left behind, as a 2.5% growth is expected for 2011. Prime Minister Lukšić is said to be committed to fiscal discipline, he stated that the current deficit would be turned into a primary surplus as early as 2013, and that public debt would culminate in 2011 at 41% of GDP. According to the first data concerning 2011, FDI is returning to the country. Also, the second Eurobond issue was carried out at an interest rate half a percentage point lower than the previous one, indicating that investors have solid confidence in Montenegrin state finances.[51]

Opponents said that Lukšić – then Minister of Finance and Deputy Prime Minister – played a significant role in the controversial issues around Prva Banka, partly owned by Djukanovic's family. Lukšić openly confronted the central bank's then-governor, Ljubisa Krgovic, and his policy making. Different views were also aired with regards to the way to resolve troubled bank.[52] The Parliament cut short Krgovic's mandate and replaced him in October 2010. Lukšić was also one of the most outspoken advocates of the government's decision to approve a €44,000,000 bailout plan for Prva banka Crne Gore from the state budget. In an interview he said that the way in which Prva Banka ensured liquidity did not have to be investigated. Lukšić said that Prva Banka had repaid all of its loan, which the Government approved within the agreed deadline. He added that it did not have to be investigated whether it had used the funds deposited by the Montenegrin Electricity Enterprise (EPCG), which increased the money flow.[53]

In an interview with Reuters news agency, he acknowledged the role Krgovic played in saving the financial stability in Montenegro. "From time to time we had policy clashes," he told Reuters. "But I respect everything Mr. Krgovic did for 10 years as central bank governor," he was quoted as saying.[54]

Prime Minister Lukšić was seen by many as a politician still controlled by former President and Prime Minister Milo Djukanovic. Although Lukšić tried to persuade journalists and his fellow citizens that he was acting on his own, and consulted Djukanovic only as often as he consulted other Montenegrin politicians, the Montenegrin opposition continued to accuse him of being the "puppet" of Djukanovic. One of the first steps taken by Lukšić was to reorganize the cabinet inherited from Djukanovic, more six new ministers. At the same time, several members of the government were still considered loyal to Djukanovic.[55] Newly appointed Deputy Prime Minister Dusko Markovic and "inherited" ministers Milan Rocen and Boro Vucinic were the most notable remaining figures in the cabinet widely seen as close allies to Djukanovic.[56]

The allegations about Djukanovic's influence were also fuelled by the fact that he retained the post of chairman of the ruling DPS party and Lukšić was only given the post of vice chairman. But some analysts described him before as a "serious" and quite autonomous player.[57] Lukšić himself rejected being just the hand of Djukanovic, mentioning that while consulting with the former prime minister sometimes, the final decisions were in his hands.[58]

Igor Luksic together with Chancellor Angela Merkel on his Berlin visit

While during the premiership of Milo Djukanovic there were no highest-level diplomatic meetings between Germany and Montenegro, one of the first diplomatic trips of Igor Lukšić led to Germany to the invitation of Chancellor Angela Merkel.[59] A few Months later the leader of the German diplomacy, Guido Westerwelle visited Igor Lukšić in Podgorica during his Balkan tour.[60]

EU politicians found the achievements of the Lukšić government encouraging and expressed readiness to support Montenegro's European integration. EU's Enlargement Commissioner, Stefan Füle, told members of the European Parliament, "His commitment to pursue the reform process and strong determination to meet the key priorities set out in the Commission's opinion are encouraging. It is now crucial to focus on implementation and establish a solid track record."[61]

During a meeting with Lukšić, Füle said that the Montenegrin Prime Minister had proven that the determination and ambitions were there. He added that the European Commission would "provide as much help as we can to assist Montenegro," in particular to meet the seven EC priorities that must be achieved in order for accession negotiations to begin.[62] Head of the EU Commission, Jose Manuel Barroso, also praised the Lukšić government. During a visit to Podgorica, he said, "I'm pleased with the commitment and the efforts demonstrated by the Prime Minister's government, and I have congratulated him on his work so far. But more work remains to be done. It's important that the government has elaborated a detailed Action Plan that focuses on the shortcomings identified in the Commission's Opinion, which provides you with a clear road map for progress. The key now is implementation. Strong leadership and ownership are needed to address the priorities, in particular those related to the rule of law."[63]