Montenegro PM Rules Out Abandoning Euro

Montenegro is concerned that the eurozone crisis could hit the small Balkan country's economy, but Prime Minister Igor Luskic said he does not believe the euro will collapse or that Montenegro should resort to using its own currency.

"I think that tying the Montenegrin economy to the euro is a much better option than the adventure of printing our own currency," Luksic told Associated Press on Monday.

The euro has been the official currency of Montenegro since 2002. Three year earlier, in 1999, the country adopted Germany's Deutschmark as the official currency.

Although Montenegro is not a member of either the EU or the eurozone, it switched to the euro when the single currency was launched.

Luskic said the main reason why Montenegro was sticking to the euro was because introducing a new currency would imply "tremendous costs."

Meanwhile, although he does not believe the current crisis will affect Montenegro's economy as much as Greece's, Luksic admitted that growth next year may be lower than the projected growth figure of 2.5 per cent of GDP.

"The main reason for concern is that branches of foreign banks in Montenegro could stop providing loans," he said. "Our banking sector relies on banks that are dominantly from the EU," he added.