EU urges Kosovo to delay euro currency requirement amid tensions

The European Union urged the government of Kosovo to delay plans forcing ethnic Serbs in the country to replace the Serbian dinar with the euro, amid ongoing tensions.

Most of Kosovo uses the euro, even though the country isn’t part of the EU. But parts of Kosovo’s north, populated mostly by ethnic Serbs, continue to use the dinar. Many rely on the government of Serbia for financial support, often delivered in dinars in cash.

On Thursday, Kosovo’s government put into effect rules that ban banks and other financial institutions in the area from using other currencies in local transactions. Kosovo’s Central Bank had issued the new rules last summer.

The decision has sparked concern among Western powers, fearing more tension in Kosovo’s relations with Serbia’s government, which criticized the measure.

Serbia’s pro-Russia president, Aleksandar Vucic, met with the Russian ambassador in Belgrade on Thursday, a day after he held talks with Western officials on Wednesday to discuss the issue.

“I informed Ambassador (Alexander) Botsan-Kharchenko about the latest unilateral move by Pristina, clearly directed against the Serbian people in Kosovo and Metohija (traditional Serb name for the province), as well as about the possible consequences of this irresponsible act of (the Kosovo) regime,” Vucic wrote on Instagram.

An EU statement expressed concern “about the consequences … on the daily lives of Kosovo Serbs and other communities throughout Kosovo due to absence of prior consultation, in particular on its impact on schools and hospitals, given the apparent absence of alternatives at this moment.”

The U.S. ambassador in Pristina also expressed “concerns and reservations,” fearing that the move would “potentially escalate ethnic tensions and prove problematic for the daily life of a number of citizens of Kosovo.”

“We think this issue really deserves more careful consideration, but also a discussion within the EU-facilitated Dialogue,” U.S. Ambassador Jeffrey Hovenier said after meeting with Kosovar Prime Minister Albin Kurti in Pristina.

Kosovo told the EU that it would ensure “the new rules do not have a negative impact or penalize the citizens,” according to Deputy Prime Minister Besnik Bislimi.

The Central Bank reported on Wednesday that Serbian bank Komercijalna Banka AD Beograd closed its branches in Kosovo.

Serbian forces fought a 1998-99 war with ethnic Albanian separatists in what was then the province of Kosovo. About 13,000 people, mostly ethnic Albanians, died until a 78-day NATO bombing campaign pushed Serbian forces away. Kosovo eventually declared independence in 2008, but the government in Belgrade doesn’t recognize its neighbor as a separate country.

Brussels urged Kosovo to extend the currency transition period and “to find a negotiated solution to this issue in the framework of the EU-facilitated Dialogue.”

The European Union and the United States are pressing both countries to implement agreements that Vučić and Kosovo Prime Minister Albin Kurti reached in February and March.

The EU-facilitated normalization talks have failed to make progress, especially following a shootout last September between masked Serb gunmen and Kosovo police that left four people dead and ratcheted up tensions.

Earlier this week, Miroslav Lajčák, the EU envoy for the Western Balkans, said that the two sides have implemented deals on payment for the energy consumed in Kosovo’s north, and on recognizing each others’ car license plates.

Serbia and Kosovo have both said they want to join the EU, but the bloc’s foreign policy chief, Josep Borrell, has warned that their refusal to compromise is jeopardizing their chances for membership.

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