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Kosovo Watch: Unilateral actions, unforeseen consequences

The Kosovo government’s unilateral move to close nine Serbian Post branches and open the Ibar Bridge has drawn serious backlash. Prime Minister Albin Kurti’s administration claims these steps aim to assert control over northern Kosovo, which has a significant ethnic Serb population. Serbia, however, sees this as a direct attack on Serb autonomy, disrupting vital services and potentially inciting unrest. With criticism from the EU and the U.S. and looming threats of sanctions, can Kosovo navigate this contentious path without further destabilising the region?

Crossing Bridges, Closing Posts: Kosovo’s Unilateral Moves Stir Controversy

The Kosovo government has made the unilateral decision to close nine branches of the Serbian Post in northern Kosovo and to proceed with the opening of the Ibar Bridge. Prime Minister Albin Kurti’s administration has taken these steps ostensibly to assert greater governmental control and sovereignty over the northern regions, which have a significant ethnic Serb population.

From the Serbian perspective, these actions are seen as a direct attack on the rights and autonomy of the ethnic Serb community in Kosovo. The closure of Serbian Post offices disrupts vital services for the Serb population, who rely on these branches for payments and other essential services. Moreover, the opening of the Ibar Bridge, a symbolic divide in the ethnically split city of Mitrovica, is perceived as an encroachment on the Serb community’s autonomy. Such measures are viewed as provocative and unilateral moves designed to weaken Serbian influence and control in northern Kosovo, aggravating an already volatile situation and potentially inciting protests among the Serb community.

Adding further to the tension are unresolved issues, such as Kosovo’s decision to prohibit payments in Serbian dinars (denar) within its territory. This move has been met with strong resistance from the Serb community, who view it as another attempt to marginalize their presence and economic influence. Another critical unresolved issue is the creation of the Association of Serb-majority Municipalities, a topic that has been a significant point of contention in the EU-mediated dialogue. While the establishment of these municipalities was agreed upon in the Brussels Agreement, its implementation remains stalled, causing frustration and deepening the divide between the two communities. Meanwhile, the EU-mediated dialogue between Serbia and Kosovo remains in a state of stagnation, with mutual distrust and unmet obligations hindering progress. Efforts to normalize relations have been fraught with challenges, including disagreements over territorial integrity, the status of Serb-majority municipalities, and basic governance issues.

Source: Eurostat

Kosovo on Thin Ice: EU Measures and US Disappointment Loom

The international reaction has been overwhelmingly critical. The European Union has voiced strong concerns over Kosovo’s unilateral actions. EU spokesperson Peter Stano has indicated that existing EU measures against Kosovo, initially established to prevent escalation, could be intensified if the government continues with such uncoordinated decisions. Should the Kosovo government persist in its current course, it faces potential sanctions that could include targeted financial penalties, reductions in EU funding, and constraints on diplomatic engagement and cooperation programs. Furthermore, such measures could jeopardize Kosovo’s benefits from the EU Growth Plan for the Western Balkans, which aims to foster economic development and integration in the region.

The United States has also expressed deep disappointment over Kosovo’s actions. In a recent statement, the U.S. government criticized the unilateral, uncoordinated steps taken by the Kosovo administration, noting that these measures unnecessarily escalate regional tensions and put both Kosovar citizens and KFOR soldiers at greater risk. The U.S. has called on the Kosovo government to cease further unilateral actions and to re-engage in the EU-facilitated dialogue to resolve issues related to the normalization of relations with Serbia. The U.S. underscored that such unilateral steps undermine Kosovo’s reputation as a reliable international partner and could potentially strain its relations with major supporters.

Preparing for the Polls: Kosovo’s Assertive Actions Set the Stage for Elections

In our opinion, the government of Kosovo is considering a strategy that involves assertive measures as speculation grows regarding the possibility of early elections. These measures appear aimed at consolidating the government’s position. By demonstrating strong governance and the ability to control volatile areas, the government might be seeking to rally nationalist support. Such a strategy could help solidify the ruling party’s hold on power and paint a picture of stability and assertiveness, crucial facets in swaying public opinion in preparation for potential early elections.

As the political landscape continues to evolve, early elections could serve as a critical juncture for Kosovo. The government’s assertive actions might be a preemptive move to ensure that it is in the strongest possible position should such elections come to pass. This proactive approach is likely designed to show constituents that the ruling party is both capable and ready to handle the nation’s challenges, particularly in areas fraught with ethnic tensions. By doing so, the government not only secures its current standing but also undermines the opposition, making it harder for critics to gain traction during the election period.

Taking decisive actions may be a calculated move by the Kosovo government to pressure the European Union into lifting existing measures that have hindered progress. Disagreements among EU member states have stymied advancements, causing frustration within the Kosovo administration. The strategic aim might be to illustrate Kosovo’s determination and push the EU towards a more favourable stance. However, such an approach risks being counterproductive if perceived as too aggressive, potentially leading to further isolation rather than rapprochement.

Tensions between Kosovo and the European Union underscore a complex relationship marred by differing priorities and internal EU divisions. The government’s strong actions reflect growing impatience with the stalled process, but the assertive stance may inadvertently alienate key EU members. Instead of fostering collaboration, these actions might deepen distrust and reluctance to engage. The Kosovo government must balance assertiveness with diplomacy to avoid exacerbating the situation and risking its goal of European integration.

As the EU Growth Plan for the Western Balkans progresses, there is a looming risk that Kosovo could be excluded if it is perceived as unstable or lacking effective collaboration. The EU’s criteria for inclusion in development programs often hinge on stability and cooperative governance. The current political manoeuvres and internal conflicts in Kosovo could be seen as red flags, potentially jeopardizing its eligibility for beneficial growth plans that could spur economic and social development.

Kosovo’s potential exclusion from the EU’s growth agenda would have significant repercussions. Being left out could slow economic progress, reduce foreign investment, and diminish opportunities for Kosovo’s population. It is imperative for Kosovo to project an image of stability and demonstrate a commitment to regional cooperation to secure its place in these vital programs. This involves addressing internal issues and fostering a political environment conducive to collaboration, which is critical not only for EU relations but also for the nation’s broader developmental trajectory.

Kosovo’s allies have voiced strong opposition to certain government moves, while Serbia stands ready to capitalize on the situation diplomatically. The current tensions provide Serbia with an opportunity to gather support among European Union members, potentially isolating Kosovo on the international stage. Given that relations are unlikely to improve before Kosovo’s elections, Serbia is poised to exploit this period to its diplomatic advantage, demonstrating a proactive stance in contrast to Kosovo’s controversial actions.

Serbia’s strategic patience could yield significant diplomatic gains. By positioning itself as the rational actor willing to engage with the EU, Serbia has the potential to shift international opinion, leveraging Kosovo’s internal turmoil. This approach helps Serbia consolidate its own position within the EU’s diplomatic landscape while Kosovo’s government, preoccupied with internal politics and controversial measures, risks losing valuable international support.

While potential demonstrations in Kosovo could turn violent, such escalation would likely require instigation and approval from Serbia. After the disastrous Banjska incident, Serbia’s image suffered, and it would be wary of further tarnishing its reputation by encouraging violence against KFOR or other international entities. Any violent outbreak inspired by Serbia might backfire diplomatically, undermining the recent gains achieved at Kosovo’s expense and eroding the diplomatic capital Serbia has carefully built.

Serbia’s recent experience suggests a strategic shift towards non-violent diplomatic manoeuvres, particularly as it seeks to maintain and expand support among EU members. Encouraging violent protests would risk damaging Serbia’s diplomatic standing, making it imperative for Kosovo to ensure that any national unrest is managed effectively. That would not only safeguard Kosovo’s internal stability but also prevent Serbia from exploiting the situation to its diplomatic advantage, thereby maintaining a critical balance in regional relations.

In conclusion, while the Kosovo government’s actions may be an attempt to assert sovereignty, they risk exacerbating ethnic tensions, straining international relations, and prompting increased EU measures. From the Serbian perspective, these moves are viewed as provocations that undermine the rights and autonomy of the Serb community in Kosovo. The international community, including the EU and the U.S., has urged Kosovo to heed calls for constructive dialogue to mitigate these risks, promote long-term stability, and maintain its path toward European integration. Resolving the longstanding issues, including the establishment of Serb-majority municipalities and restoring the stalled dialogue between Serbia and Kosovo, is crucial for the stability and prosperity of the entire region. Kosovo’s leadership must carefully consider the domestic and international implications of its decisions to ensure the country’s continued growth and stability. Further unilateral decisions could result in intensified international sanctions, isolating Kosovo and complicating its efforts for long-term stability and integration.

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Fjorent RRUSHI

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Fjorent is the head of ALM & Research for Raiffeisen Bank Albania. After a MSc in International Business from the University of Trieste and an MBA from MIB School of Management in Italy he started as an Investor Relations financial analyst at the aerospace & defense company Leonardo in Rome. After that he moved to the Italian Stock Exchange in Milan promoting blue chip companies through roadshows with institutional investors and after the merger with London Stock Exchange was in charge of primary markets of potential to be listed companies in Eastern Europe. In 2011 moved back to his native country to join Raiffeisen Bank in ALM & Research team in charge of fund transfer pricing, liquidity management and IRRBB. After a period at Intesa Sanpaolo Bank Albania as Head of pricing starting from 2021 he is heading the ALM & Research of Raiffeisen Bank Albania. Apart from macroeconomic analysis of particular interest for him is the disruptive technological transformation impacting the banking system. Fjorent’s hobby is football and he enjoys theatre and has been an amateur player as a teenager.

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Valbona GJEKA

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Valbona is a financial analyst in Raiffeisen Bank Albania and looks back on more than 15 years of analytical experience in the bank. As now, she is the responsible for macroeconomic research for Albania and Kosovo market and covers developments of the foreign currency in the local market. Prior to that, she worked in National Institute of Statistics as methodology specialist. She holds a diploma in Mathematics and a master’s degree in Marketing from Tirana University. She enjoys traveling, artistic activities and volunteering.