Kosovo, Serbia fail to compromise on dinar issue – EU

The delegations agreed on the establishment of a new business entity under Kosovo law to temporarily distribute financial assistance for Serbs in Kosovo, the EU’s diplomatic service said in a press release earlier this week. However, the two parties could not compromise on several key points related to this business entity, including the extent of its operations and the scope of its beneficiaries.

The EU believes that there is currently no willingness to reach a compromise agreement, as per the press release

“The absence of an agreed way forward has negative consequences on the daily lives of Kosovo Serbs and other communities throughout Kosovo and is a continued source of concerns,” the EU's diplomatic service stated.

Kosovo’s central bank approved the new currency regulation in January, saying that other currencies could be still used in saving accounts, non-euro bank accounts and international non-euro payments. However, the United States, United Kingdom, Germany, Italy and France called for suspension of the regulation, citing concern on the impact it might have on the Serb-majority communities in Kosovo who receive financial assistance from Serbia in dinars.

In response, Kosovo’s central bank unveiled a three-month plan for a swift transition to the euro involving easing the conditions for opening bank accounts, a suspension of the central bank fees for establishing branches and offices, and boosting mobile banking services and services via ATM.

The transition period terminated at the end of last week, and the regulation is now fully in force, with penalties for those who use other currencies in cash transactions.