Political independence through monetary dependence? The case of Montenegro

As an economic policy, currency substitution – the use of a foreign currency in lieu of a domestic currency – is rarely associated with nationalism. This is due to a natural tendency to equate nationalism with economic mercantilism and with the political need to foster nationalist feelings among the population. This need not to be the case, though, as the case of the newly independent Montenegro demonstrates. How can we explain the apparent inconsistency between nationalist leaders fighting for independence and opting to use the currency of the European Union (EU), the quintessential supra-national entity? This paper suggests that conventional explanations need to be complemented with a contextual historical analysis of nationalism. By incorporating the fluid and multifaceted nature of nationalism which, in the hands of skilful political elites, can be reframed to include apparently contradictory positions, I suggest that euroisation has been extremely consistent with nationalist goals. As the content and directionality of nationalist discourse shifted, the euro was transformed into a symbol of national identity in this Newly Independent Country.