BELGRADE (Serbia), October 14 (SeeNews) – Kosovo must step up efforts against corruption and organised crime and develop market economy to speed up progress in building closer ties with the European Union, the European Commission said on Wednesday.
“Kosovo faces major challenges, including ensuring the rule of law, the fight against corruption and organised crime, the strengthening of administrative capacity, and the protection of the Serb and other minorities,” the European Union executive said in a statement summarising key findings of its progress report on Kosovo.
The southern Serbian province, where 90% of the population is ethnic Albanian, declared its secession from Serbia in February 2008. Kosovo's independence has been recognized by more than 60 countries so far, including the U.S. and most EU member states. Serbia, backed by its historical ally Russia, has said it would never recognise Kosovo's independence.
"Ensuring the participation of Kosovo Serbs in public life, including local elections, remains a major challenge. Further efforts are needed to build confidence and promote dialogue," the Commission said.
While Kosovo has made some progress in meeting the political criteria for joining the bloc, in particular by strengthening the legal framework, it has made very little progress towards establishing a functioning market economy, the Commission said.
“Substantial reforms and major investments are needed to enable Kosovo's economy to cope over the long term with competitive pressure and market forces within the Union,” the statement said, adding that the already large trade deficit has continued to widen. Kosovo’s August trade deficit narrowed by 2.9% year-on-year to 160.21 million euro ($238.4 million) as exports recorded an annual rise for the first time this year, while imports continued falling, the Kosovo Statistics Office said earlier this month.
“Exports fell sharply in 2009, from an already very low base. The cost of finance remained high, as banks continued to attach high risk premiums. The weak rule of law, widespread corruption, and uncertainty over property rights continued to be major impediments to economic development,” the Commission said, adding that unemployment remains very high.
Kosovo’s economy, mostly based on consumption and public investment, grew 5.5% last year versus 4.4% growth in 2007 and the banking sector remained sound.
In a separate statement the European Commission proposed on Wednesday to launch a process aimed at scrapping visas for Kosovo citizens and start preparations for a trade deal with Kosovo.
“In its communication 'Kosovo - Fulfilling its European Perspective', the Commission proposes to start a process that should lead to visa-free travel for Kosovo citizens and to begin preparations for a comprehensive trade agreement once Kosovo meets the requirements,” the Commission said.
"This initiative is part of the Commission's 2009 Enlargement Strategy, which also includes the 2009 Progress Report for Kosovo," it added.
EU Commissioner for Enlargement Olli Rehn said in that statement that the Commission proposed a series of practical measures to help improve the lives of Kosovo citizens.
“These measures will show Kosovo that EU approximation is not something abstract, but that it is about real, tangible benefits for all. We now call on EU Member States to agree to our proposals and to ensure Kosovo keeps pace with developments in the rest of the Western Balkans,” Rehn said in the statement.
The Commission's proposals do not prejudge EU Member States' position on Kosovo's status, he added.
In December 2008, the EU deployed in Kosovo a civilian rule of law mission, EULEX, which includes a 2,200-strong force of international judges and prosecutors, as well as police and customs officers. Its primary task is to assist and support Kosovo's law and justice institutions in developing their capacities.
The mission reached full operational capacity in April and in February, the EUl renewed for 12 months the mandate of the EU Special Representative.
