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EU Relations with Montserrat

Montserrat is a British OCT. In July 1995, Montserrat suffered a violent volcanic eruption, which required the setting up of a safety zone (North) and an exclusion zone (South), the latter covering over half the 102 km² island. Since Plymouth, the capital, is in the exclusion zone, a provisional capital was set up in Brades. The total population of Montserrat stands at 4,785 inhabitants.

Economy

Before the volcanic eruption, it stood at 10,400, but about 8,000 people fled the island after the disaster (only 2,700 inhabitants in 1997). The volcanic eruption has put a serious damper on Montserrat’s small open economy. Per capita GNP stands at US$ 4,814 (2005). External aid for the development of the security zone has had a positive impact, especially in the construction sector. Montserrat continues to suffer from the consequences of the volcanic eruptions, as more than half of the island remains uninhabitable. Montserrat has a significant budget deficit. Regarding transparency and exchange of information for tax purposes, Montserrat committed to improving transparency and establishing effective exchange of information in tax matters.

Political background

The UK remains responsible for foreign affairs, defence, internal security, the public service and the offshore financial sector. In other areas, executive power is exercised at island level. A general election took place in Montserrat on 31 May 2006. The 9 seats were contested by 3 parties – the New People’s Liberation Movement (NPLM) led by outgoing Chief Minister John Osborne, the Movement for Change and Prosperity (MCAP) led by outgoing opposition leader Rosalind Cassell-Sealy and the Montserrat Democratic Party led by Lowell Lewis – and 4 independent candidates. A 77% turnout of the 3000 strong electorate, in a well-organised and orderly election, resulted in Lowell Lewis receiving the highest number of votes, followed by 4 MCAP candidates. The remaining seats went to 3 NPLM and an independent. The new government, led by Dr Lewis, was first a coalition between the MDP, the NPLM, but was replaced in February 2008 by a coalition between the MDP and MCAP. There is a genuine parliamentary democracy in Montserrat.

External and regional environment

Montserrat is a full member of the Caribbean Community (CARICOM). Montserrat is also a member of the Organisation of Eastern Caribbean States (OECS), which share a single Central Bank, the ECCB. The ECCB and the Ministries of Finance of Member States determine and monitor monetary policy for the Eastern Caribbean dollar. Montserrat requires prior UK Government approval, in the form of an Entrustment, before undertaking international commitments. Montserrat shows great interest in the EPA process, even though, as an OCT, it is not directly involved in the process.

Relations with the EU

The initial 9th EDF allocation amounts to € 11 M. Adding the transfers from previous EDFs, the indicative territorial allocation amounts to € 16,9 M, which is provided as budgetary support focused on trade in services, and in particular on tourism.

Following the Mid-Term Review of the 9th EDF, the initial allocation has been increased with 5.6 M€, for an extension of the existing budget support programme and for the repayment of an outstanding EIB loan, which was granted for the reconstruction of the port that was devastated by the volcanic eruptions.

Montserrat receives an allocation of 15,66 M€ under the 10th EDF.

Last update: 17/02/2012 | Top