Kosovo police closed six branches of a Serbia-licensed bank as part of a decision to ban the use of the Serbian dinar currency in the country, leading to tension with neighboring Serbia. The branches of the Postal Savings Bank were closed based on financial institutions’ claims of illegitimacy and authorized by the prosecutor’s office. The government had required areas dominated by the ethnic Serb minority in Kosovo to adopt the euro currency starting on February 1, prompting concerns from the European Union and the United States about the impact on the ethnic Serb minority in northern Kosovo.
Despite most of Kosovo using the euro, parts of the north, populated by ethnic Serbs, continue to use the dinar. The ethnic Serbs in these areas often rely on financial support from the government of Serbia, typically delivered in dinars in cash. The EU and the US are urging both countries to implement agreements reached by Serbian President Aleksandar Vučić and Kosovo Prime Minister Albin Kurti in early 2021. However, progress in the EU-facilitated normalization talks has been minimal, particularly after a shootout in September 2021 between masked Serb gunmen and Kosovo police that resulted in four deaths and exacerbated tensions.
Serbia and Kosovo have expressed their desires to join the EU, but the bloc’s foreign policy chief, Josep Borrell, has warned that their unwillingness to compromise is jeopardizing their chances of EU accession. The history between Serbia and Kosovo stems from a war in 1998-99 between Serbian forces and ethnic Albanian separatists in Kosovo, resulting in approximately 13,000 deaths, mainly among ethnic Albanians. A 78-day NATO bombing campaign pushed Serbian forces out of Kosovo, which subsequently declared independence in 2008, a move that Belgrade does not recognize.
The closure of the Serbian bank branches in Kosovo follows a series of decisions made by the government to transition areas dominated by ethnic Serbs to the euro currency and ban the use of the Serbian dinar. This move has exacerbated tensions with neighboring Serbia and drawn concerns from the EU and the US about the potential impact on the ethnic Serb minority in northern Kosovo. Progress in EU-facilitated normalization talks between Serbia and Kosovo has been slow, with a violent incident in September 2021 further straining relations between the two sides. Both Serbia and Kosovo aspire to join the EU, but their current lack of compromise is seen as a hindrance to their accession prospects.
The history of conflict between Serbia and Kosovo dates back to the late 1990s, when Serbian forces engaged in a war with ethnic Albanian separatists in Kosovo, resulting in thousands of deaths, primarily among ethnic Albanians. The subsequent NATO bombing campaign forced Serbian forces out of Kosovo, which declared independence in 2008, a move not recognized by Belgrade. The ongoing dispute over Kosovo’s status continues to impact relations between Serbia and Kosovo, with both sides facing pressure to reach agreements and address long-standing issues in order to progress towards EU membership.
