Montenegro: country overview

Montenegro is one of Europe’s newest countries, created in 2006.

Member of Schengen area: No

Political system: Republic

Capital city: Podgorica

Total area:  14 026 km²

Population: 0.6 million

Currency: euro

Country overview

Evidence of the country’s rich heritage remains highly visible today – from the many well-preserved old towns to the religious monuments and national cuisine.

While still relatively unknown as a tourist destination, it is gaining rapidly in popularity having become a recent entry in several respected lists of ‘places to see’.

The name ‘Montenegro’, meaning ‘black mountain’, is likely to have come from the thick black forests that covered Mount Lovćen in medieval times. These may now be less dense, but for such a small country, Montenegro is home to a surprisingly varied collection of natural attractions. Around half of the country is still covered by forest, while visitors and locals alike also enjoy the Adriatic coastline, lowlands and high mountain ranges. The Tara River canyon is also the deepest and longest in Europe, and the second-longest in the world.

Tourism plays an important role in the Montenegrin economy, but it is the service sector in general that accounts for the largest part of GDP. The remainder comes largely from industry (aluminium and steel production) and agriculture.

Economy overview

Montenegro's economy is transitioning to a market system, but the state sector remains large and additional institutional changes are needed. The economy relies heavily on tourism and the export of refined metals. Unprofitable state-owned enterprises weigh on public finances. Montenegro severed its economy from federal control and from Serbia during the MILOSEVIC era and maintained its own central bank, adopted the deutsch mark, then the euro - rather than the Yugoslav dinar - as official currency, collected customs tariffs, and managed its own budget. The dissolution of the loose political union between Serbia and Montenegro in 2006 led to separate membership in several international financial institutions, such as the European Bank for Reconstruction and Development. In January 2007, Montenegro joined the World Bank and IMF. Montenegro became the 156th member of World Trade Organization in December 2011. The European Council (EC) granted candidate country status to Montenegro at the December 2010 session. Montenegro will begin negotiations to join the EC in 2012, if it meets the conditions set down by the European Council, which call on Montenegro to take further steps to fight corruption and organized crime. Unemployment and regional disparities in development are key political and economic problems. Montenegro has privatized its large aluminum complex - the dominant industry - as well as most of its financial sector, and has begun to attract foreign direct investment in the tourism sector. The global financial crisis had a significant negative impact on the economy, due to the ongoing credit crunch, a decline in the real estate sector, and a fall in aluminum exports. In 2011, real GDP growth reached 1.8%, the highest it has been in three years.

Useful links

Delegation of the EU to Montenegro

Government of Montenegro

Tourist information

EU membership