Kosovo Urged by EU to Postpone Currency Transition in Ethnic Serbian Areas
In a recent development, the European Union (EU) has called on Kosovo to delay its attempt to enforce the use of the euro currency in ethnic Serbian-dominated areas, despite the country not being a part of the EU. The move comes as new rules have come into effect that would prohibit the use of the Serbian dinar in these areas, which still rely on Serbia for financial support.
Currently, most of Kosovo utilizes the euro as its official currency. However, the northern regions, predominantly inhabited by ethnic Serbs, have continued to use the dinar. Many residents depend on financial aid from the Serbian government, often received in cash in the form of dinars.
On Thursday, the government of Kosovo implemented regulations that prevent banks and other financial institutions in the disputed areas from conducting transactions using currencies other than the euro. The Central Bank of Kosovo had introduced these rules last summer, but their enforcement has caused concerns among Western powers, who fear that this move may exacerbate tensions between Kosovo and Serbia.
Serbia's pro-Russia president, Aleksandar Vucic, held talks with the Russian ambassador in Belgrade on Thursday, following discussions with Western officials on Wednesday to address the issue at hand. Vucic expressed his concern on Instagram, stating, 'I informed Ambassador Botsan-Kharchenko about the latest unilateral move by Pristina, clearly directed against the Serbian people in Kosovo and Metohija, as well as about the possible consequences of this irresponsible act of the Kosovo regime.'
In response to the situation, the EU released a statement expressing concern for the potential impact of the currency transition on the daily lives of Kosovo Serbs and other communities, particularly regarding schools and hospitals. The EU also criticized the lack of prior consultation on the matter and urged Kosovo to engage in dialogue and find a negotiated solution through the EU-facilitated Dialogue.
Deputy Prime Minister Besnik Bislimi assured the EU that the new rules would not negatively impact or penalize citizens. However, the implementation of these regulations has already led to repercussions, with the closure of Serbian bank Komercijalna Banka AD Beograd's branches in Kosovo being reported by the Central Bank.
The history between Serbia and Kosovo remains complex, rooted in the 1998-99 war between Serbian forces and ethnic Albanian separatists. The conflict resulted in the deaths of approximately 13,000 individuals, mostly ethnic Albanians, until NATO's intervention pushed Serbian forces out through a 78-day bombing campaign. Kosovo eventually declared its independence in 2008, but Serbia does not recognize it as a separate country.
The EU and the United States have been actively pushing for both Kosovo and Serbia to implement agreements reached by President Vucic and Kosovo Prime Minister Albin Kurti earlier this year. So far, progress in the EU-facilitated normalization talks has been limited, particularly following a shootout in September 2020, involving masked Serb gunmen and Kosovo police, which resulted in four fatalities and heightened tensions between the two parties.
Efforts have been made to address certain issues, such as payment for energy consumed in Kosovo's north and the recognition of each other's car license plates. However, the lack of compromise from both sides has raised concerns, with EU foreign policy chief Josep Borrell warning that their refusal to collaborate may jeopardize their chances of EU membership.
As the situation unfolds, it remains to be seen how Kosovo and Serbia will navigate this latest challenge in their pursuit of normalized relations and EU accession. Dialogue and negotiation are essential for resolving the tensions and finding a mutually agreeable solution to benefit all stakeholders involved.
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Llazar Semini reported from Tirana, Albania.
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