Kosovo is on the brink of a new crisis as the government has prohibited the use of Serbian currency, despite Western nations expressing concern that this action might trigger a major conflict.
The decision posed a risk of inciting the most recent in a protracted sequence of disputes with Kosovo’s Serb minority.
The Serbian population, consisting of around 120,000 individuals, has maintained the use of the dinar currency since the violent conflict in the late 1990s, which saw Serbian military and government officials withdrawing from Kosovo after a devastating battle with ethnic Albanian militants.
A significant number of Serbs in Kosovo are employed by Serbian institutions and get their wages, pensions, and conduct other financial transactions in dinars, the official currency of Serbia, rather than the euro, which is the official currency of Kosovo.
Starting from Thursday, the Central Bank of Kosovo has mandated the exclusive use of the euro currency.
However, just before the scheduled implementation of the ban on the dinar, Pristina seemed to delay the process due to pressure from Western countries.
“While we will not promptly enforce punitive actions, we will dedicate our efforts to educating the Serbian population,” said deputy prime minister Besnik Bislimi at a news conference.
The level of misunderstanding was so high that many banks in Serbian settlements around northern Kosovo started closing down their activities.
“We are being engaged by everyone.” We are consistently uninformed… “I am disillusioned with politics,” said Zoran Ilic, a 45-year-old Serbian resident residing in the politically split city of Mitrovica.
Aleksandra Jovanovic, aged 37, said AFP that the shutdown of her bank will probably result in extended journeys to another branch located in the southern region of Serbia.
“Nothing is ordinary, everything is extraordinary,” Jovanovic said.
Serbia has consistently refused to recognise Kosovo’s declaration of independence in 2008, leading to ongoing and intense disputes between the two parties. These conflicts extend even to minor administrative issues, as shown by a recent conflict about licence plates.
The Belgrade government has had a significant influence on the surviving Serbs in Kosovo, partly via the provision of substantial financial and job incentives.
Serbia’s budget allocates around 120 million euros ($132 million) every year for expenditures related to Kosovo, while some believe that the actual value may be far higher due to informal transactions.
The new laws are expected to exert further pressure on that connection, thereby excluding Serbs who use dinars from Kosovo’s banking system.
“The Kosovo Serbs will have the most significant impact,” said Bosko Jaksic, a political analyst based in Belgrade, in an interview with AFP. The diplomatic and political repercussions will surpass the monetary ones in severity.
The Western nations have strongly criticised the action as provocative, cautioning that the law is likely to further disrupt the already strained ties between Serbs and the Pristina administration.
The US embassy in Pristina, in a joint statement released by the Quint countries, expressed worry over the specific effect of the legislation on schools and hospitals, since there now seems to be no feasible alternative method.
The Quint, consisting of France, Germany, Italy, the United Kingdom, and the United States, is a group of five NATO nations with a specific emphasis on the Western Balkans.
The statement emphasised that the law would directly affect the daily life of the vast majority of Kosovo Serbs who now receive financial aid from Serbia.
The Quint nations have requested the delay of the execution of the legislation in order to provide an ample opportunity of transition.
Kosovo, while not a member of the eurozone or the European Union, accepted the euro in 2002. The decision to replace the dinar with the euro is aimed at combating corruption, money laundering, and the circulation of counterfeit currencies.
Deputy Premier Bislimi emphasised that the measure will effectively stop the transfer of unregulated funds from Serbia. He said that money is still being transported over national borders in bags and private vehicles, and thereafter dispersed via unregistered and unauthorised establishments.
The Serbian government strongly criticised the action, with Prime Minister Ana Brnabic stating that the measures are likely to disrupt EU-supported negotiations aimed at permanently normalising relations between Belgrade and Kosovo.
The legislation is a response to a tumultuous year in Kosovo, marked by a confrontation between armed Serb militants and police at a monastery near the Serbian border in September, resulting in the death of at least four individuals.
The violence ensued as a result of the protests that occurred earlier in the year, triggered by the government’s appointment of ethnic Albanian mayors in Serbian northern regions, after the boycott of elections.
The Serb List, the biggest ethnic Serb party in Kosovo, expressed concern over the targeting of the dinar and cautioned that this action may lead to an escalation. They said that the new laws put the physical life of the Serbian people at risk.
