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Kosovo Watch: From ballots to bargains, Kosovo's coalition building begins

Kosovo held its general elections on February 9, and with over 99% of the votes counted, Prime Minister Albin Kurti's Lëvizja Vetëvendosje leads with 40.8%, though diaspora votes could boost this figure. Despite this, Vetëvendosje will need coalition partners to govern. Potential government options include forming alliances with minority parties or negotiating with larger opposition parties like PDK or LDK, each scenario presenting its own challenges and implications for Kosovo's political stability and dialogue with Serbia.

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Kurti's Party Hits a Speed Bump, But Overseas Votes Might Give It a Boost!

Kosovo held its general elections on February 9, marking the ninth elections since the 1998-1999 conflict ended by NATO intervention, and the first ones that were regularly scheduled. Voter turnout is estimated to have been circa 45% (including Kosovo citizens living abroad), a decline from the 48.8% participation rate in the 2021 elections, reflecting a decrease in voter engagement compared to previous elections.

Once again, Kosovo's elections were conducted in a free and fair manner, highlighting the country's commitment to democratic principles. Unlike its neighboring countries such as Serbia and Albania, where opposition parties have boycotted some elections, Kosovo's recent electoral process was smooth, with all parties accepting the results. This acceptance underscores Kosovo's status as a maturing democracy, where the will of the voters is respected. In the context of the Western Balkans, Kosovo stands out for its adherence to democratic norms and the peaceful transition of power, setting a positive example for the region.

With over 99% of the votes counted in Kosovo, Prime Minister Albin Kurti's Lëvizja Vetëvendosje has emerged as the leading party with 40.8% of the votes, a significant drop from their more than 50.3% share in the 2021 elections. However, this result does not yet include the votes cast abroad, where Vetëvendosje has strong support and could potentially gain a few additional percentage points. The Democratic Party of Kosovo garnered 22.2% of the votes, positioning them as the second-largest party, while the Democratic League of Kosovo (LDK) received 17.6%, making them the third largest. The Alliance for the Future of Kosovo obtained 7.5%, and Lista Srpska, a party supported by Serbia, secured 4.4%, capturing the majority of the guaranteed seats for the Serbian community. According to the constitution, 20 seats are reserved for minorities, with 10 of them allocated to the Serbian community.

Vote distribution by main parties
Source: KQZ, RBI/Raiffeisen Research

Kosovo's Post-Election Political Landscape Calls for Governing Coalitions

The final seat allocation, pending the count of diaspora votes, could slightly alter the distribution of seats and affect coalition dynamics. In previous parliamentary elections, the diaspora favored Vetëvendosje. Nevertheless, despite a potential 3-4pp increase due to diaspora votes, Vetëvendosje is unlikely to govern alone. Despite leading, Vetëvendosje cannot form a government independently with the current results and must seek coalition partners. The party's refusal to form post-election coalitions with traditional opposition parties further complicates the process. The Serbian community, represented primarily by Lista Srpska, is likely to take all 10 guaranteed seats, but their participation in the government remains uncertain due to strained relations with Vetëvendosje.

Vetëvendosje may attempt to form a government with minority parties, but this could result in a fragile coalition with just over the required 61 seats. If opposition parties unite, they might form a government, but it would likely be unstable and short-lived. A more stable government could emerge if Vetëvendosje and a larger opposition party, such as PDK or LDK, decide to form a coalition, requiring significant compromises. Albin Kurti expressed confidence in continuing to govern, potentially with small coalition partners. Leaders of PDK and LDK have acknowledged the results but remain non-vocal regarding coalition possibilities. Ramush Haradinaj of AAK indicated a willingness to collaborate with opposition parties to form a government.

Kosovo's Political Future: Pivotal for Balkan Stability and EU Aspirations

Kosovo's political stability is crucial for the broader Balkan region. Prolonged political uncertainty could exacerbate regional tensions and impact relationships with neighboring countries. Political stability is also key for Kosovo's aspirations for European Union integration, as effective governance and the ability to implement reforms are essential for advancing this agenda. The involvement of international actors, including the EU and the US, is significant in Kosovo's political processes, and their support and mediation could be crucial in facilitating coalition-building and ensuring political stability.

The election results and the subsequent formation of the government will have significant implications for Kosovo's dialogue with Serbia. If Vetëvendosje forms a government, Albin Kurti's administration may continue its firm stance towards Serbia, potentially leading to heightened tensions and stalled negotiations. A coalition government involving PDK or LDK might adopt a more pragmatic approach towards dialogue with Serbia, potentially reviving the process with a focus on reaching a comprehensive agreement. The role of Lista Srpska in the government will be crucial, as their involvement could facilitate a more inclusive dialogue process. However, if they are excluded, it might lead to increased tensions and a lack of representation for the Serbian community in the negotiations. International actors, particularly the EU and the US, will continue to play a pivotal role in mediating the dialogue between Kosovo and Serbia. Their support and pressure will be essential in ensuring that both parties remain committed to the negotiation process.

Conclusion

Kosovo's post-election political landscape is marked by uncertainty and the need for coalition-building. The formation of the new government will significantly impact the prospects for dialogue with Serbia, with the political dynamics and composition of the coalition determining the approach and willingness to engage in meaningful negotiations. The broader context, including regional stability, EU integration, and international mediation, will also influence the dialogue process and the potential for reaching a lasting agreement. The final results, including diaspora votes, will be crucial in determining the exact composition of the new parliament and the feasibility of various coalition scenarios.

Forming the next government in Kosovo presents several alternatives, each with its own set of challenges and implications for both local and international stakeholders. One potential route is for the current Prime Minister, Albin Kurti, to form a coalition with opposition parties, which could leverage the upcoming presidential vacancy as a bargaining chip. This coalition could help stabilize the political landscape and facilitate more constructive dialogue with both the EU and Serbia. However, the EU must be prepared to reset its relationship with Kosovo, offering robust support to any government willing to engage in a predictable and constructive dialogue. The EU's role becomes even more crucial given the potential shifts in US policy under President Donald Trump, who could either disengage from the region or adopt a more active role that challenges the EU’s approach. This uncertainty adds another layer of complexity to the already intricate political scenario in Kosovo.

The challenges ahead are multifaceted. The ethnically Serb minority in Kosovo, at circa 5% of the population, remains a significant obstacle due to their loyalty to Belgrade and concentrated presence in the northern part of Mitrovica. Kurti's previous efforts to integrate this region by deploying police and enforcing the use of the euro have been steps towards greater control, but these measures could face resistance under a new administration. Additionally, the political instability in Serbia, with President Aleksandar Vučić possibly facing new parliamentary elections, adds another variable to the equation. The West, particularly the EU and the US, could leverage this instability to restart talks between Pristina and Belgrade, but this requires a delicate balance of diplomacy and strategic support. The situation is fluid, and any shift in government could either pave the way for renewed dialogue or exacerbate existing tensions, making international support and a cohesive strategy more critical than ever.

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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.