The investors are fleeing, all fingers pointing at Abazovic
DPS from Montenegro criticized Deputy Prime Minister Mr. Abazovic.Source: B92
He was criticized for "ignorant and frivolous, almost charlatan approach to serious state affairs."
Since he took the office, he has demonstrated only that, causing, as critics said, obvious and bad consequence – resulting in the biggest daily decline in the value of government bonds in history.
"Not so long ago, Abazovic, as an MP confused Thailand with Taiwan and hoisted the Montenegrin state flag in a country that Montenegro and about 150 other countries do not recognize. Now, firmly believing that he is not only an expert on security but also on the economy, he tried to excel in the field of investments in front of the Parliament", the DPS stated.
According to them, the consequences of such irresponsible behavior is causing devastating damage to the state of Montenegro and economy.
"His populist approach to politics, frivolous approach and irresponsible statements regarding China's debt have produced dramatic consequences."
The DPS reminds the Government and its ministers that they owed the country almost a billion euros at the beginning of their mandate, because the previous government left them with a stable financial situation.
"That is why we are asking the Government for an urgent reaction and stabilization of the situation on the bond market, in order to stop the collapse of their value and to minimize the damage that Abazovic caused," the DPS said, the Podgorica portal CdM reported.
Two-pence from experts
Professor at the Faculty of Management in Podgorica and economic analyst Vasilije Kostic also believes that the record daily decline in the value of Montenegrin bonds on the international financial market, of 6.4 percent, was influenced by unbalanced statements made by government officials.
According to the CDM portal, the historic decline in Montenegrin government debt securities occurred after the statement made by a government official, namely by Abazovic, who, after asking Brussels for a European bank to undertake a loan from Exim Bank for the first section of the highway, also told the BBC that Montenegro could, in theory, lose a part of the territory should the agreement with the Chinese is disregarded. Professor Kostic said that this case should be a warning to state officials, as well as politicians, to refrain from judging the state of public finances, especially when the situation is far from good.
"Each word was spoken from a high-ranking politician or a state official has its weight, a 'price tag' in financial markets where expectations are traded in a certain way, so everything that shapes them is relevant in either a positive or negative direction," Kostic said in a statement for CdM.
He also added that, having that in mind, it is not surprising that investors, upset by the statements of government officials, "flee" from Montenegrin securities and lower their value consequently.
It is difficult to predict what the consequences may be since the desires of financial markets are unpredictable, but, as he pointed out, it is quite certain that they do not support the credibility of Montenegro and security in the capitalization on purchased bonds.
"It is certain that the meritorious information from the meritorious place should reassure investors, that is, annul the current bad perception and distrust in the financial capacity of Montenegro, in its public finances," Kostic believes.
Complete this in a competent way, and investor confidence will get restored. Professor believes that this can only be a short-term reaction to the market and that things will return to normal with a slight oscillation.
The director of Montenegrin Mortgage Bank, Gojko Maksimovic, stated that "currently there is a big sale of Montenegrin Eurobonds, caused by inaccurate interpretations on the debt to Exim Bank,” CDM stated.