EU moves toward a fix for Montenegro’s euro use as accession talks near the finish

As the European Union pushes Montenegro’s accession talks toward closure, Brussels is confronting an issue that is less political than technical: Montenegro has used the euro since 2002 without formal membership in the EU or the eurozone. What began as a stabilisation measure is now becoming a legal and institutional obstacle at a point when the process is shifting from negotiation to treaty drafting.

Unilateral euroisation outside EU treaty rules

Montenegro adopted the euro unilaterally in 2002, without any formal agreement with the European Central Bank or within an EU framework. This “unilateral euroisation” sits outside EU treaty requirements, which generally require candidate countries to join the Union first and then meet convergence criteria before adopting the common currency.

With accession talks moving toward closure, the arrangement is increasingly difficult for EU institutions to reconcile with existing rules. Montenegro’s finance minister Novica Vuković said the European Commission is working on a pragmatic solution, and that a formal proposal is expected by the end of May.

No realistic exit—and limited options for Brussels

The problem is not simply procedural. Reversing euroisation is not considered realistic because the euro underpins Montenegro’s financial system, banking stability and external credibility. The country does not have an independent currency; its central bank operates without monetary sovereignty and relies effectively on eurozone monetary conditions.

That leaves Brussels with constrained choices. One approach under discussion would be a formal recognition mechanism that legitimises Montenegro’s existing euro use within the accession treaty framework, aiming to avoid a disruptive transition. Another possibility would involve transitional arrangements linked to fiscal discipline, financial supervision and alignment with eurozone governance rules.

Why timing matters for investors and enlargement credibility

The schedule heightens the stakes. Montenegro is currently the most advanced EU candidate, with 14 negotiating chapters provisionally closed and an accession target around 2028. The EU has already begun drafting the accession treaty—an indicator that unresolved institutional issues could carry over into execution rather than being deferred.

Economically, Montenegro’s unilateral euroisation has clear investor-facing effects: it removes currency risk, lowers borrowing costs and supports confidence. But it also reduces traditional macroeconomic flexibility by eliminating exchange rate adjustment and independent monetary policy, which increases reliance on fiscal discipline and careful management of external balances.

A test case for how enlargement fits treaty law

For Brussels, the challenge is to maintain legal consistency while keeping momentum in enlargement policy—especially as Montenegro becomes a test case for accelerating accession in the Western Balkans. In effect, the negotiations are not about whether Montenegro will use the euro—it already does—but about how that reality can be embedded formally into EU structures without creating precedents that could complicate future enlargements.