The European Union issued a reprimand to Kosovo for unilaterally closing six branches of a Serbia-licensed bank, citing negative impacts on the ethnic Serb minority living in northern Kosovo and potential harm to Kosovo-Serbia normalization talks. Kosovo police closed the branches of the Postal Saving Bank as part of a decision to ban the use of the Serbian dinar currency in the country, which has been in effect since February 1. The move was postponed for three months due to pressure from the EU and the United States.
The State Department expressed disappointment over Kosovo’s lack of coordination with international partners in implementing the ban on the Serbian dinar, fearing that it would escalate tensions. The British embassy in Pristina also warned that the move could escalate tensions and make a long-term solution to the currency issue more difficult. The Postal Saving Bank assured clients that their deposits were safe and that ethnic Serb clients could still access services at other branches or offices.
Serbian Prime Minister Milos Vucevic condemned Kosovo’s actions, accusing Prime Minister Albin Kurti of endangering the survival of the ethnic Serb minority in Kosovo. Kosovo’s Finance Minister Hekuran Murati defended the move, stating that it was done in accordance with the law and aimed at addressing illegal financial activities. Both Brussels and Washington are urging Kosovo and Serbia to implement agreements reached between their leaders in February and March of last year.
The EU-facilitated normalization talks between Kosovo and Serbia have faced challenges, especially following a shootout between Serb gunmen and Kosovo police last September that left four people dead. Most of Kosovo uses the euro, while parts of the north, populated mostly by ethnic Serbs, continue to use the dinar. The EU expressed concerns about the negative effects on the daily lives of Kosovo Serbs and other communities reliant on financial support from Serbia. Both countries’ chances of joining the EU are at risk due to their refusal to compromise.
The EU called on Kosovo and Serbia to return to the negotiating table to address their differences. The history of conflict between Serbian forces and ethnic Albanian separatists in Kosovo, culminating in a NATO bombing campaign in 1999 and Kosovo’s declaration of independence in 2008, continues to impact relations between the two countries. The EU emphasized the importance of dialogue and compromise in resolving the longstanding issues between Kosovo and Serbia and urged both parties to work towards sustainable solutions.
