Managing external imbalances in Montenegro - will faciliate integration to EU

Montenegro as a new state has had similar approach to the development models as other European transition economies. High openness to foreign investments andeuroisation have influenced high liquidity, fiscal and financial expansion. With the current crisis, Montenegro is experiencing significant slowdown of economic activity, external imbalances, shortage of foreign capital, low credit activity, fiscal tightening and increase of public debt. This article aims to investigate the main effects to balance of payment imbalances in Montenegro. It compares economic indicators with the Eurozone countries, especially with the countries of the Eurozone periphery, trying to find similiraties and differences and possible policy recommendations, based on the experience in the Eurozone.