Kosovo’s Prime Minister Albin Kurti has published a statement clarifying the decision to enforce Article 11 of the constitution regarding a single official currency in the face of increasing criticism from the EU and the US after Serbia claimed it amounts to a ‘ban’ on the Serbian dinar, still used illegally in Kosovo’s Serb-majority north.
A recent Central Bank decision to allow only the euro for formal cash and digital payments in the country means that other currencies, such as the Albanian lek, Serbian dinar, or the US dollar, can no longer be used. The exception is with casual peer-to-peer payments, certain types of foreign currency bank accounts, or in exchanges.
The decision resulted in outrage from Belgrade, which has said it amounts to an attempt to cleanse the country of Serbs despite the fact the rules have de facto been in place for over 16 years. The EU and the US have called on Kosovo’s politicians to halt or postpone the decision and include it in the ongoing EU-backed dialogue.
Serbia unhappy over Kosovo enforcing euro-only currency policy, EU seeks answers
Kosovo will only accept the euro within its borders, a decision that has sparked fears of renewed flare-ups with Serbia as Serbs in the north of the country insist on using Serbian dinars, while the EU called on both sides to avoid any further escalation.
In his statement, Kurti said, “The Office of the Prime Minister fully supports the independence of the Central Bank of Kosova and the professionalism with which it carries out its duties…At the end of last year, the Central Bank issued its regulation on cash operations. Regulating how foreign currencies operate in a country is naturally a core competence of the Central Bank.”
Following the 1998-1999 war between Kosovo and Serbia, Pristina declared independence in 2008, the same year its constitution was signed. But as of 2002, the euro was used in the country, with the support of the European Central Bank.
Article 11 of the constitution states that only one currency can be used in the country, while other provisions relate to ensuring the political independence and autonomy of the Central Bank.
Despite this, Serbs in the north, which do not recognise Kosovo’s independence, insist on using the dinar while others get payments from Belgrade in the currency.
“This regulation does not target the Serbian dinar. The Central Bank has rightfully sought that the informal transactions happening in Serbian dinar be formalised. Therefore, their existence and continuation had been illegal.”
Kurti added, “Kosova’s official currency is the euro, and the regulation comes 16 years after our declaration of independence.”
He said the decision is the responsibility of the Central Bank and it is needed to prevent money laundering, terrorist financing and other criminal activities.
The prime minister clarified that the new rules simply mean that payments received by Kosovo Serbs will still be allowed but will just be deposited into euro-denominated accounts.
“Naturally, private possession of foreign currencies remains permissible,” he added.
Kurti noted that many Kosovo Serbs already have euro bank accounts as they have received public money from Pristina, such as subsidies and social protection benefits, in the currency. He also noted that even if they do not have or want euro bank accounts, they can still receive pensions from Serbia in one of the fifteen financial institutions in the region.
Those who wish to open a euro account can do so free of charge and with a streamlined process, making the transition as swift and smooth as possible, he added.
Addressing critics who have not understood the nuances of the situation, Kurti said, “A period of transition should never be construed as an attack or deepened divide,” adding that this moment of brief uncertainty should not be used for “political gain” or “fearmongering”.
However, Kurti conceded that the way the changes were communicated could have been clearer and, therefore, a “period of transition is needed”, during which time the government will provide all assistance and information needed while fostering communication campaigns.
“An action that seeks to strengthen democracy while enforcing the law should be read for what it is. As our country levels up in its democratic strength, it will likely require some adjustment,” Kurti said.
Albanian prime minister defends Kosovo's right to uphold constitution in dinar row
Albanian Prime Minister Edi Rama has jumped to the defence of Kosovo, noting its right to enforce its own constitution in relation to new rules from the Central Bank, reinforcing that the euro is the only legal tender in the country.
(Alice Taylor | Euractiv.com)
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Source: euractiv.com
