At 9.00 pm on the 12^th of November 2011, Silvio Berlusconi resigned from his position as Italy’s prime minister, due to a failure to preserve his majority in the Chamber of Deputies, the lower house of the Italian parliament. Primarily, of course, Berlusconi’s departure came after pressure from internal and foreign institutions, public opinion and political leaders, as a consequence of the country’s worsening economic crisis and fears that he was no longer capable of the necessary strong leadership at this time.

His meeting with President Napolitano at the Quirinale marked the end of one of the most controversial government in Italian history, and is seen by many commentators as the last chapter of Berlusconi’s life as a political leader.

Enter Monti

The day after, Napolitano appointed Professor Mario Monti as new prime minister, asking him to form a new government capable of solving Italy’s chronic debt crisis. Monti is a well known figure in Europe and abroad: a member of the Trilateral Commission (as is Lucas Papademos, the new Greek prime minister, whose own situation was assessed in this recent Balkanalysis.com article), international adviser to Goldman Sachs, a former European Commissioner for competition and former rector of the eminent Bocconi University of Milan.

No surprise, then, that this appointment by Napolitano was praised by European and international institution like the IMF and World Bank. Less predictable was the support Monti immediately gained from domestic political parties (including Berlusconi’s, which has still a relative majority), industrial representatives and trade unions’ officials- each of them, for different reasons, having identities light years away from that of an insider to international financial trusts.

In two days, Monti accepted his designation and defined his new so-called “technicians’ government,” which won a trust vote both from the lower and the upper chambers of the Italian Parliament. The principal members of the technical government are: Giulio Terzi di Sant’Agata (a former ambassador to the US) as Minister of Foreign Affairs; Anna Maria Cancellieri as Minister of Interior; Paola Severino as Minister of Justice; Francesco Profumo as Minister of Education; Corrado Passera as Minister of Development and Infrastructures, and Admiral Giampaolo di Paola as Minister of Defense.

Unprecedented Expertise

Each of these ministers is a recognized expert in the field in which he or she will operate as a public official- a fact which represents quite a rarity in Italian political tradition. This comes as a confirmation that the first hardship of Monti;s cabinet is to be recognized by international and Italian observers as a credible answer to the risk of collapse.

And indeed, the new government is now being called upon to make many crucial decisions, and not only restricted to the economic and financial sectors, which constitute its main area of expertise and will require its biggest efforts. In Italian newspapers today, the question most frequently being repeated is “what next?”, implying that a long-term solution to the crisis cannot be reached only on national terms, but must involve new policies in economic management at an EU level.

The sides are principally two (or three, maybe): those saying that the debt crisis may be solved only through a wider participation of European Central Bank in financing “shaky” countries, and those, with Germany ahead, which underline the “domino-risk” of using money from virtuous states to help squanderers (the third being the position of those pointing out, in different ways, that the problem is Europe itself).

Concerns for Economy, and a Medium-Term Presence

Needless to say, the decisions that will be taken in Brussels will affect the behavior of European countries towards the Western Balkans, and will have an impact on their economies; European countries such as Germany and Italy are the main commercial partner of the area. As was seen in a previous Balkanalysis.com article, investors are attracted by the dimension of new markets, the cheap labor costs, the profitable tax regime and so on. Sound political and diplomatic relations permitted also high-level alliances in energetic and financial sectors, whose effective outcome depends now widely on the success of the “economic rescue” of Italy and Euro-zone.

In the Western Balkans, economic integration in the European market precedes the admission in the European Union for the most populous countries of Croatia – the forthcoming 28th EU member – and Serbia, as well as for smaller countries “looking for approval” like Montenegro and Kosovo, that adopted the euro as everyday currency (for practical and business reasons, not by virtue of any qualifying procedure, however).

As was well reported in the broad research collected in no. 3 of PECOB’s paper series (Portal of Central Eastern and Balkan Europe), dated September 2010, the crisis affected Balkan states by slowing down still fragile economic systems, bound to political and infrastructural reconstruction; as a consequence, the dreaded reduction of foreign investments, the unemployment, the perceived corruption and the lack of solid welfare, could constitute a major factor of destabilization in the region, boosting inequality, poverty and differences between social classes. These were of course the same factors that led, 25 years ago, the Yugoslav Federation down the road to collapse.

Thus, many eyes are now looking at the new Italian government’s moves with growing concern, because they will have consequences outside Italy too. This is even more the case since it is now likely that the present government will remain in charge until the next elections (spring 2013), and will thus set medium-term policy for the entire country.

Balkan Banking Connections

At first sight, this government seems to have less interest in the Western Balkans than the previous one had, considering that Berlusconi was considered by many domestic observers as a close friend, or at least an ally, of the former Montenegrin President Milo Djukanovic.

Many business agreements have been signed under the aegis of this Adriatic friendship, such as the acquisition by Italian group A2a of almost half of the national Montenegrin electric company EPCG, or the building of new pipelines from Bar to Bari. Most of these agreement were financed by Italian banks and specifically by the two giants, Intesa-San Paolo Group and Unicredit Banca, which already hold a consistent part of the financial market in Yugoslav successor states.

A clue as to the new government’s Balkan orientation may be found in the presence in the Monti cabinet of Corrado Passera. Still last week CEO of Intesa-San Paolo, Passera has been deeply involved in the group’s investments in the Western Balkans during the past years. Even if he resigned from his bank as soon as he was appointed Minister of Development and Infrastructures (which also covers energetic supplies), it is reasonable to imagine that he will take advantage of his experience towards the area and support those project he financed as a bank manager.

However, the main characteristic of this technical government lies exactly in the personal biography of the ministers: at least five of them have had long careers in the financial and entrepreneurial area. The new Minister of Welfare, Elsa Fornero, was together with Passera a high-rank official of Intesa-San Paolo, vice-president of the Surveillance Council since 2010; we might also recall her role as consultant to the World Bank in 2003-2004, when she was appointed to evaluate the state of transition economies such as Russia, Lithuania and later, Albania and Macedonia.

Military and Diplomatic Appointments and the Balkans

The new government is then well aware of the possible consequence of an Italian “step back” from the region, at least for how it might affect the financial and credit markets. But the possible role of the new Italian cabinet as a stability factor in the Western Balkans stands out also in the military and diplomatic sectors: Admiral Giampaolo di Paola, appointed as Minister of Defense, is currently serving as Chairman of the NATO Military Committee but has long experience as Italian Chief of Staff, and has frequently visited Bosnia and Kosovo, where Italian soldiers are participating in EUFOR and KFOR peacekeeping missions, respectively.

The task of cutting through the diplomatic knots of the Western Balkans will fall on the new Minister of Foreign Affairs, Giulio Terzi di Sant’Agata, current Italian ambassador to the United States. A member of the Italian representation to the United Nations during the nineties, he served in New York as vice-president of the Italian delegation in the Security Council during the war in Bosnia. And he is considered one of the leading Italian experts on international security and human rights: during his career, he has been a close counselor of the Minister of Foreign Affairs, especially for issues related with the Balkans and Middle East.

Another more subtle aspect of possible diplomatic influence concerns Italy’s unique religious dynamic. The new Minister for International Cooperation and Integration, by necessity, is also the minister tasked with handling the Balkan countries. The nominee is Andrea Riccardi, a top official of the Catholic Comunità di Sant’ Egidio. This is the same organization whose member is Juliusz Janusz, appointed by the Holy See as apostolic delegate to Kosovo on 10th February 2011. The significance of the Vatican’s overtures in Muslim-majority Kosovo has been discussed by two Balkanalysis.com articles, the first in October 2008 and the second in April of this year.

This thus leads us to another important link between Italy’s new government and the Balkans: that between the Vatican and Catholic “headquarters” in Rome, which are well represented in this cabinet and may condition Italian foreign policies in the next months, even towards project and investments in the Balkans.

Other Concerns: North Africa and Above All, the Economy

Certainly the Western Balkans will not be the main concern of the new executive, if we consider the general situation on the Mediterranean chessboard: the turbulent events in North Africa and the consequences of the Arab Spring require careful attention from Italy, being a neighboring country. But Admiral di Paola, speaking as NATO commander, frequently underlined the importance of enlarging the Treaty to Balkan countries, as members or partners. This position has been depicted as clashing with Russian interest in the region and in Serbia in particular, as a consequence of the ineffectiveness of the NATO-Russian council (Russian envoy Dmitry Rogozin said in 2009 that it is a council where “scholastic discussions were held”).

The “technicians’ government” led by Mario Monti is going to face more than one trial in its effort to drag Italy out of the crisis. Many questions are still unanswered: will Monti’s cabinet just follow the ‘golden rules’ expounded by the IMF and international financial organization, since it is constituted by representatives of these groups? And what will guarantee, let alone the control of public debt, the redistribution of wealth and the economic growth necessary to avoid default and a tragic chain effect in the European Union and neighboring countries? Time is short, and everyone is expecting to receive an answer as soon as possible.

Given the unprecedented severity of the financial crisis and its possibly transformational effects on the entire EU, it is natural to assume that the Balkans will not loom large on the agenda of the Monti government. However, where and how it chooses to act will no doubt reflect the cumulative experience and interests of the cabinet members discussed above.

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Along with learning more about what comprises the offerings of this famed destination, readers are also treated to some interesting details on local attractions, and the steps Budva tourism (and that of Montenegro in general) have taken to remain relatively unaffected by the global economic downturn- plus some news on what visitors can expect for the upcoming 2011 summer season.

……………..…………….

Chris Deliso: Thanks for taking the time to speak with me today. First, I would just like to get a general idea of what you do at the Budva Tourism Organization, particularly to promote the destination?

Tanja Drašković: We at the local tourism board promote Budva as a destination, by ourselves as well as in cooperation with the proper government ministry and the national tourism board. We have some joint campaigns throughout the year. Basically, our main goal is to present Budva as a tourist destination, and to make it a better product and develop the town as a brand. We are constantly working to see what needs to be done in order for the product to be better.

CD: Beyond promotion aimed at the tourists from abroad, how does this work involve reaching out to the local tourism providers? Do you provide some kind of advice or training to the local restaurants, bars, hotels and so on?

Budva's walled old town, set alongside beaches, is one of Montenegro's most recognizable sights (photo: Chris Deliso)

TD: We are in constant contact with the local restaurants, cafés and bars to offer our help. And we as an organization release touristic flyers that include the places that we recommend. We list what’s good to see and do locally, and in these flyers we only list the restaurants and bars that we think are the best.

CD: So, it is not an issue of advertising? That is, that these entities cannot pay to be listed in the tourist information?

TD: No, that’s free- we are non-profit-

CD: But are there any specific criteria, or else how do you decide which such places to promote?

TD: We don’t have specific criteria listed for bars or restaurants to follow for inclusion. But generally, they should have a high standard of service for customers and operate in a professional manner.

CD: How extensively does the tourism board operate in Budva? Where can visitors find your material?

TD: We provide service and information about the area’s tourism offerings at different points throughout the municipality. In high season, everything is free, and tourists can get information about hotels, private accommodation, and generally all that is available. Also, we provide a service whereby local inhabitants who offer private rooms can register their guests with us, and then we can give this necessary information to the police for them.

CD: That seems like a useful idea. I imagine it must make it easier for accommodation providers, possibly older folks, or else who perhaps live far from police stations…

TD: Yes, it makes it easier for them, as they do not have to travel all the way to the police to hand in the guest registration information every day.

Steep walls and narrow laneways characterize Budva's old town, which is thronged by tourists durng high season (photo: Chris Deliso)

CD: And, I would imagine this system may also result in more tax collection for the municipality? I mean, throughout the region, not just in Montenegro, it is a common practice for persons to rent rooms without any license or reporting of profit.

TD: Yes indeed, local tax revenues have risen since we started providing this service. But by offering it, we also want to show them that there are actually pluses to being legal.

CD: How that? How do the rooms providers benefit?

TD: We have local campaigns, as well as with the state authorities, to help persuade them why they should be officially registered. Besides that it’s always safer for them to work legally, once we have registered a private accommodation provider, we can then include them in all of our Budva tourism promotion campaigns, nationally, regionally and internationally. Each year we have several campaigns promoting not only the hotels but also private accommodation. We have published a catalogue of private accommodation on offer in Budva, and we hand them out at every tourism fair we go to, and at every press conference we hold.

CD: This does sound like an advantage, especially for those providers who can’t market themselves or who don’t have much internet visibility. When did you start trying to get the local private accommodation people to declare themselves?

TD: The campaign started in 2005 and now we have maybe 20,000 registered rooms, offered by about 5,000 providers- four times more than we had at the beginning! This has had a financial impact too, since the tourist tax per visitor is one euro per day- this sum is divided between the national and local tourism organizations and Budva municipality.

CD: To return to the previous subject, when you mention tourism fairs, which are the ones you attend generally?

TD: We go to many. Through them, accommodation and other local services that are officially listed have the chance to be put into contact with tourism groups and providers who attend more than 20 of the biggest fairs in Europe. These include the tourism fair in Paris, the World Travel Market in London, the Berlin and Frankfurt tourism fairs, as well as in Moscow, Prague, and Italy, and of course, all of the regional ones.

Our organization often goes to these events together with the national tourism organization of Montenegro, but we also go alone sometimes to some of them.

CD: As we all know, there have always been many jokes in the region about the stereotype of how lazy those Montenegrins are. And I do recall, some years ago now, how slow and uninspired the service seemed to be in Budva. However, nowadays it seems to be much better. Do you feel this is the case? If so, have you done anything as an organization specifically to address the issue of professionalism in tourism?

TD: Yes, I feel we have improved. There are lots of things we do as an organization to help train tourism providers, though of course we can’t order people what to do. We do have roundtables to talk to the local hotel industry and representatives of local tourism organizations, travel agencies, etc.

This is being done not only for Budva, but also for other locations in Montenegro and nationally. The majority of our discussions are aimed at persuading people that they need to really try and be better, for their own good. As a result we can say that we have better hotels. And this is helping to drive change, as it became a necessity for owners to give better service to keep up with their competitors.

CD: For individuals working in the tourism industry here, what is the situation with education and certificates in tourism- things that might help their further career this industry?

The stunning Boka Kotorska Bay (Bay of Kotor), north of Budva, is famous for its fjords and historic structures (photo: Chris Deliso)

TD: There are several faculties, including a Montenegrin-Canadian educational center. They issue hospitality and tourism certificates for waiters and others who will work in the future in hotels. There are also two faculties, in Bar and Kotor, for tourism. The students who are studying hospitality there also need to undertake practical training during the summer.

CD: Montenegro has a population of only 625,000, and tourism is considered its major industry. Do you have any information on what percentage of the population is involved with it?

TD: It is substantial, especially on the coast, where the figure is probably more than 60-70 percent.

CD: One of Budva’s most famed attractions is the secluded, semi-island of Sveti Stefan, where numerous world leaders and celebrities have enjoyed vacations over the years. However, the situation has been unclear since privatization talks- is it now closed or open?

TD: Sveti Stefan is going to be re-opened to the public on the first of June- that is the information we have. It was closed due to restoration and repairs by a private company operating on a 30-year lease. It is going to be exclusive, with the Villa Montenegro Sveti Stefan, open since 2008, and Hotel Sveti Stefan.  These are sophisticated and exclusive properties. They finished renovations on the hotel last summer, and throughout the whole year they invited prominent persons from the world to see it-

CD: I hear Ronaldinho was among them…

The sweeping view from high above on the Mausoleum of Lovcen attest to Montenegro's largely wild, mountainous terrain (photo: Chris Deliso)

TD: Yes, it was widely known tat he was one of the guests invited, though they tend to keep the guest list private. The guests can also arrive by boat for maximum privacy.

CD: With all this exclusivity, what is the public able to see on Sveti Stefan?

TD: They can walk the area, and admire the architecture and atmosphere, and also they can use the beach on the left- it is a public one. The other one on the right is a private hotel beach.

CD: Some regional tourism providers are expecting to benefit from the current unrest in North Africa, believing that travelers who had plans to visit Tunisia or Egypt will be changing their minds. Does Montenegro share this view? And, in any case, what are your expectations for the upcoming season for the country?

TD: Any relation between tourists choosing Montenegro instead of Egypt or Tunisia has not yet been seen. The problems in North Africa began early this year, but by that point we had already talked to hoteliers and gone to several tourism fairs, meaning that we had the majority of contracts for this summer signed before the unrest started in that region. So, the foreign tour operators we have worked with were clearly very satisfied even before those events.

But probably it will have some effect, and if people cancel they can certainly come to us- we are a very popular and attractive destination. Croatia and Turkey are also very popular and could probably gain this year from a change in the tourist behavior as well.

CD: Finally, if you could say a few words about why foreign tourists should choose Montenegro- how do you prefer to ‘sell’ the destination? Budva is considered the party capital of the Montenegrin coast, but is there anything else to it?

TD: Well, first of all, Montenegro is a very stable and safe place to come for holidays. Here, tourists never need to worry about anything that could disturb their stay. And here in Budva specifically, yes, we are famous for night-life, but we have a lot of variety as well. In addition to the beaches, concerts and partying at bars and nightclubs, we have cultural events in the summer, and there are a number of quieter places nearby, like Miločer and Pržno, small villages and towns attractive to families and seniors.

CD: If tourists choose to use Budva as the base of their stay in Montenegro, and wish to take boat trips to the Boka Kotorska Bay or Dubrovnik in nearby Croatia, or trips into the mountains, are these things that can be arranged locally?

TD: Yes! Lots of tourist agencies have such excursions. It is advisable to reserve a few days in advance, during July and August. And aside from the boat trips to the bay and its fjords, or even to Dubrovnik, there are trips offered for rafting on the Tara River, and some have options for sleeping there for a night or two before coming back.

CD: I have heard the opinion of some tourism professionals here that Budva’s location on the central part of the Montenegrin coast is an advantage. Do you agree? Does this location make it a good base for those wishing to enjoy regional activities while staying in Budva?

The exotic and the austere: a palm-fronted historic church in Budva's old town (photo: Chris Deliso)

TD: Well, Montenegro is a small country, and therefore easy to travel around it, but yes, this is an advantage of staying in Budva. The best sandy beach in the country, at Ulcinj, is only 1.5 hours away, and it is a similar-length trip to both Dubrovnik and the northern town of Kolašin near Biogradska Gora- a national park with forests and a lake. Jeep safaris, hiking or horse riding are all popular in the north of Montenegro. And near Skadarska Lake, we have lots of wineries. Visitors can follow a ‘wine route’ through the villages producing our best wines.

CD: Over the past few years, when Montenegro started getting a lot of foreign interest and investment in tourism, some people have feared that it might become completely unaffordable. Has this turned out to be the case? Have Montenegro’s traditional regional visitors been frozen out at all?

TD: No. There is now just a greater variety of hotels and restaurants. So, you can have a five-star lunch accompanied by the best service, but also local bars and smaller eateries for an inexpensive meal and snack. The fresh fish is particularly excellent. People can expect to pay around 20 euros for private rooms- so it is still affordable.

CD: This is good news for many people, considering the effect seen elsewhere in the region with development- Croatia, for example became more expensive, and even Ohrid-

TD: We had the possibility to have the same problem before the global financial crisis, but then the minister of tourism, national tourism board, and we in the local board told the hoteliers and restauranteurs to not raise the prices, to keep things steady-

CD: Amazing! They actually listened?

TD: Yes, and the people who followed this said that it paid off, keeping prices on the same level.

CD: So, do you think that this strategy explains why Montenegro basically was saved from the crisis that affected other regional destinations, such as Greece, in the past couple years?

TD: I don’t know whether we can say if it was only due to one thing in particular. We also did special packages for reasonable prices, and it was a very good policy, as it turned out later.

CD: I would like to finish by asking you to identify for us what makes Budva unique for you? Do you have any good local stories about the place?

TD: Budva is one of the oldest settlements on the Adriatic, at 2,000-plus years old. It has a very rich culture, and this can be seen in the beautiful old town, as well as in the museum of ethnography. You can see the marks of all the civilizations that lived here and contributed to our present traditions.

The Budva area also has very beautiful nature- more than 25 sandy beaches in the municipality, all accessible by car, and some you can also approach by boat.

CD: Very nice. But how about some history? After all, everyone loves unique stories about special places. Do you have any good local legends to share?

TD: Yes, there are many interesting stories from our history. For example, Budva was for a time part of the Austro-Hungarian Empire, but near its very border; on a hill east of here, there is a memorial plate on a very big rock made by Emperor Franz Joseph II, in 1873 or 1875. We are now making a very nice walking tour in the area. Also, there is a beautiful Roman mosaic in Petrovac worth seeing. Budva, and indeed the whole Riviera, has always been a settlement with a rich past, Greek, then Roman and all the cultures that came after.

CD: What about underwater treasure, pirate wrecks and so on? Any exciting stuff like that?

TD: There are several sites near Petrovac to explore, and a shipwreck has been found between there and Bar- an Austro-Hungarian warship that was sunk in WWI. It has stayed there for several years while the government continues to investigate to see how is its condition, and what to do with it-

CD: Maybe this will be a mission for someone like Robert Ballard… but what about older vessels? Any ‘pirates of the Adriatic’ shipwrecks to be found?

TD: The warship is sunk in an area that is not so deep, so I think it will be very easy to work with. There are old stories of pirates off the Montenegrin coast, but I don’t know if they are true. In the old, there were people from some of our villages who were part of pirate fleets traveling through the Mediterranean; but no one wrote about the details.

CD: So, if we can conclude with some of your thoughts about the upcoming Budva tourist season. Are you optimistic? And are there any special events going to be held here?

TD: We think it’s going to be a very good summer, and our local tourism organization has prepared lots of small festivals, music, folklore etc., for summer. There will be all in all more than 10 from June through September. On the 13^th of July, the date of the independence of Montenegro, we will celebrate the founding of the tourism organization too with a big party. And at the end of August, we have in nearby Petrovec the traditional fishermen’s festival- Petrovacka Noc, or “Night of Petrovac.” There we will have free fish, beer and wine for all the visitors.

CD: Sounds great! What about big music events, though? I know you have been starting to get world-known music stars in the last few years. Who is on for this year?

TD: It is true, Budva has had everyone from the Rolling Stones and Madonna to Julio Inglesias, Italian singer Anna Oxa, Lenny Kravitz and many jazz groups and DJ parties. We have a program called “Budva Summer” and in that we always try to make at least one big concert. For example, last year at the opening of Sveti Stefan, we had Andrea Boceli. We always try to have notable musicians like that each summer.

CD: And, I imagine there are lots of concerts from regional “ex-YU” artists?

TD: Yes, of course, regional musicians are very popular, we have them regularly, singers like Severina from Croatia, Zdravko Čolić –

CD: Hey, I love Zdravko Čolić! But what about this year? What are going to be big shows in Budva in 2011?

TD: I can’t say yet, but we will announce them in June- visitors can keep an eye on our official Budva.travel website, This will have updated schedules soon.

CD: Sounds good! Thanks very much for taking the time to speak with me. We wish you good luck and a good season in Budva this year!

TD: Thank you!

Speaking for Britain’s Daily Mail, tourism ministry official Ferdinand Wieland attested that the government’s strategy “…is to not just renovate old hotels, but create state-of-the-art new projects and turn Montenegro into a higher-quality tourist destination.”

Documenting several high-profile developments currently opening or under construction, the newspaper noted that price adjustment for properties has settled since a peak in 2007, but that interest remains relatively higher than in other once-touted Balkan getaways such as Bulgaria. Further, the excitement surrounding exclusive hotels such as the newly-opened Aman Sveti Stefan – on the fabled isle near Budva – remains palpable.

Key to the government’s strategy is a new “super-marina”, known as Porto Montenegro, being built near Tivat. The 10-year project will include luxury amenities, apartments, a five-star restaurant, and leisure activities. It is being backed by Peter Munk, a Canadian mining executive with extensive business activities in Eastern Europe and Russia.

In October 2006, Munk concluded negotiations with the government, taking over a Yugoslav-era shipbuilding and naval yard. At the time, the pioneering investor enthused that with the acquisition, “…we are establishing a brand new industry which will enable Montenegro to be competitive with the most successful yacht harbors on the Mediterranean.” according to SETimes.com.

Now, completion of the first residential units and 85 of the planned 600 yacht berths well ahead of schedule is adding to industry confidence, reads the Daily Mail, especially at a time when other planned projects in the region have stagnated due to the state of the economy.

Proclaiming that their marina is being ‘created by yachtsmen, for yachtsmen,’ the Porto Montenegro management has assembled a notable team of international heavyweights to design, build and outfit the place. Among these include landscape designer Robin Lane Fox, vice-chairman of the British Horticultural Society who has done work for Queen Elizabeth II, and structural engineering company ARUP, whose past projects include the Sydney Opera House, Centre Pompidou in Paris, and several venues for the Beijing Olympic Games in 2008, according to the Porto Montenegro website.

Yachting is an important part of the draw in a small country often compared with Monaco and San Tropez. Numbers for the year so far are impressive. On July 28, Radio-Television Montenegro quoted Sanja Brankovic of the Tourism Organization of Kotor as saying that thus far in 2010, some 110 ships with 47,965 passengers and 248 yachts with 965 passengers have been moored in the harbor.

Industry and governmental leaders are keen to present tourism development as the prime focus for economic development in the tiny, rugged and often spectacularly beautiful Adriatic state. At least for three months of the year, there is promise for seaside tourism- while Montenegro would like to also develop its mountain-based offerings for summer and winter sports as well. Developing and lengthening the season by adding on things like spa and wellness centers is an area of new attention.

While the current economic crisis has seen decreases in tourism in traditionally-touristed countries such as Greece, June saw a 13 percent increase in passengers at Podgorica and Tivat airports over last year. On July 8, Turkish Airlines began running direct flights to the Montenegrin capital on a thrice-weekly basis, making Montenegro even more accessible to global travelers.

For the British media, Mr. Wieland also stated that he expects western visitor levels to increase by up to seven per cent this year, up from the around 1.2 million visitors who visited Montenegro in both 2008 and 2009.

Already, increased visitor numbers have been noted, according to the Radio-Television Montenegro report. For example, the public relations manager of the Budva Riviera Hotel Group, Tijana Kotarac, said that the company’s hotels in Budva and Petrovac have experienced a 13 percent rise in total stays over last year.

She added that the majority of guests from abroad or from Russia, Serbia, France, Germany, Bosnia and Herzegovina and the countries of Eastern Europe.

Set invitingly on the Adriatic between Albania and Croatia, mountainous Montenegrin has received great foreign investment interest over the past few years due to its potential as a sea and mountain tourism destination. Indeed, these complementary geographies make Montenegro stunningly beautiful, and also help explain its long and eventful history as a wild land of insurrections, feudal fiefdoms and smuggling. This prevailing mentality remains ensconced in political life, and corruption is often pointed to as presenting a major challenge. However, a positive EC country report in October 2011, which gave the country the green light to start membership talks, appears to indicate the Brussels is more willing to turn a blind eye in order to hasten Montenegro’s process towards integration.

Montenegro was the last Yugoslav republic to remain in state union with Serbia (until 2006). Its mixed Venetian, Ottoman and Yugoslav histories have left it with an eclectic mix of architecture, including seafront fortresses and mountain-top churches. Both before and after independence from Serbia in 2006, the issue of separateness of a Montenegrin language and church from those of Serbia has also been infused with historic and political argumentation, leaving a subtly divided society. Muslim minorities include ethnic Albanians in the south and Bosniaks in the Sandzak region that spills over into Serbia.

Despite not being an EU member, Montenegro was granted the right to use the Euro as its currency, and was even before the amicable separation with Serbia treated more favorably by the Western powers. It escaped bombardment during NATO’s 1999 intervention, when political leaders banked on then-Yugoslav president Milosevic’s unpopularity to present themselves as a friendlier ally for the West. Now, several years after independence, the country happily accepts suitors from far and wide, and retains its historic identity as a middle ground where perceived enemies from without can meet to safely and discreetly do business.

Outstanding Issues

Relations with Serbia and Kosovo, especially concerning refugee return issues and final border demarcation with the latter; corruption and organized crime in relation to political leaders;  the future of NATO and EU membership.

Forward Planning: Points of Interest

• The relative speed of Montenegrin recovery from global economic woes, and how this issue will affect tourism and construction projects
• Pace and development of EU membership accession negotiations, authorized on October 13, 2011 by the EC
• Investigations (or non-investigations) of government officials over corruption and organized crime on a transnational scale
• NATO membership accession, expected by 2012, and the impact this might have on regional stability as well as the country’s relations with Serbia and Russia.

Filip Vujanović, President

Igor Lukšić, Prime Minister

Ivan Brajović, Interior Minister

Duško Marković, Justice Minister and Deputy Prime Minister

Milorad Katnić, Finance Minister

Predrag Sekulić, Minister for Sustainable Development and Tourism

Boro Vučinić, Defense Minister

Milan Roćen, Foreign Affairs and European Integration Minister

Brands & Distinctions

Sea and Mountain tourism, including canyoning; Water polo; poetic epics

Major Industries

Tourism, aluminum and steel production,  agriculture, construction

Key Trade Partners

Germany, Serbia, Switzerland, Italy, Russia, Bosnia, Greece

Main Airports

Podgorica, Tivat