Kosovo-Serbia dinar meeting in Brussels ends with no progress

Meetings between Kosovo and Serbia in Brussels on Monday over the use of the Serbian dinar in the country yielded no results, with Kosovo’s Deputy Prime Minister Besnik Bislimi stating he hopes the EU envoy for Kosovo-Serbia dialogue, Miroslav Lajcak, will schedule another meeting for next week.

Tripartite meetings were held between Bislimi and Serbia’s chief negotiator, Petar Petrovic, in the presence of Lajack. Later in the day, Lajcak held bilateral meetings with both sides, but still, there was no progress.

“My opinion is that these proposals are still very far from each other. We tried to get closer, but it seems that an additional meeting is needed, maybe Lajcak will offer to hold it next week”, Bislimi said.

He said that Kosovo put two proposals on the table during the meeting, but no further details were provided.

“We have two proposals. We know what each side’s focus is, but at this point, it would hurt the process more if we continued to present the details of the two proposals,”he said.

“I think that our side has issued a very constructive proposal that enables financial support to go to end users, but without injuring at any moment the regulations of the Central Bank of Kosovo and the legislative framework of our country”, Bislimi added.

On 1 February, the Kosovo Central Bank, an entity independent of the government, enforced a regulation stipulating that the euro is the sole currency for payment transactions in the country. This follows the euro being the country’s official currency since 2002, and the Constitution of 2008 stated that there is only one legal tender.

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.

Despite this, many Kosovo Serbs, who refuse to accept Kosovo’s 2008 declaration of independence, continue to use the dinar, shunning the euro.

Other currencies, including dollars, pounds, lek, and dinar, will still be allowed in exchanges, specific foreign currency accounts, and informal transactions between individuals.

However, all official payments must be made in dinar, preventing large amounts of physical cash from being brought into Kosovo across the border, leading to concerns about organised crime and traceability of funds.

Meanwhile, in a bid to allow Kosovo Serbs to adjust, the Kosovo government has enforced a three-month transition period for the rules to take effect.

Serbia sets up dinar ATMs near Kosovo border

The Post Office Bank of Serbia has opened four makeshift bank branches, Jarinje, Bernjak, Konculj, and Merdare border crossing points, where it says Kosovo Serbs can withdraw payments from the Serbian government, such as salaries and pensions, in dinar.

Last week, Kosovo and Serbia were told to prepare proposals for using the Serbian dinar in Kosovo prior to the meeting in Brussels. The Serbian side insisted that the establishment of the Association of Serb-Majority Municipalities in Kosovo would solve the issue, along with allowing the Serbian bank, Savings Bank, and Post Office to continue operating.

Kosovo argues that Serbia should make the payments in euro, or exchange them to euro before making them through the existing and fully functional banking system, something Serbia refuses to do as it does not recognise Kosovo’s independence.

Kosovo Prime Minister Albin Kurti has clarified that the dinar is not prohibited, despite Serbia’s claims and many incorrect media reports, and has encouraged Serbs to join the country’s banking system.

He said the central bank has offered the People’s Bank of Serbia facilities for converting dinars into euros and has assured free euro bank accounts for any Kosovo Serbs. Dinars can be paid into these accounts and then withdrawn in euros, the official legal tender, the government said.

“Aid to the Serbian community, sent by the government of Belgrade, received in euros and registered through the bank account can be received for transparency and establishing legality. In this way, the amount of money sent from Belgrade will exactly match the money you receive in Kosovo,” he said in mid-February.

“Belgrade’s hysteria over the central bank regulation stems from the imminent halt to its illegal cash pipeline into Kosovo, not concerns for Serbian citizens’ welfare,” he added.

The Speaker of the Assembly of Kosovo, Glauk Konjufca, has stated that the decision on the dinar issue belongs to Kosovo and it is a decision that cannot be reversed, as such a decision was necessary.

Kosovo PM debunks 'fearmongering', clarifies key points of euro-only policy

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.

(Alice Taylor | Euractiv.com)