Kosovo police reported the shutdown of six branches of a Serbian bank in northern Kosovo, according to Euractiv.
The closure of Serbian bank branches in the Serb-majority north of Kosovo took place on Sunday (May 20), almost four months after Pristina implemented the law. Under the legislation, the euro is the only legal tender affecting northern Serbs who still receive payments from Belgrade in dinars.
Serbia spends tens of millions of dollars annually to fund Kosovo’s Serb minority. Belgrade immediately criticised the move, accusing Pristina of “terrorising” ethnic Serbs.
On February 1, Kosovo’s Central Bank introduced a regulation making the euro the only currency for payment transactions in the country. This follows the fact that the euro has been the country’s official currency since 2002. The 2008 Constitution, however, states that there is only one legal tender.
As a result, Serbs who refused to use the euro and instead relied on illegal payments in dinars from Serbia found themselves in a difficult situation. Other currencies, including dollars, pounds, lek, and dinar, will still be allowed for exchange, in certain foreign currency accounts and in unofficial transactions between individuals.
Kosovo Prime Minister Albin Kurti clarified that the dinar remained unbanned, despite Serbian statements and many incorrect media reports. He urged Serbs to join the country’s banking system.
Kurti stated that the central bank had offered the People’s Bank of Serbia services to convert dinars into euros and provided free euro bank accounts for all Kosovo Serbs. According to the government, dinars can be deposited into these accounts and then withdrawn in euros, the official legal tender. However, thousands of residents, students, employees, and pensioners who rely on dinar payments must now cross the border to receive them.
Actions of law enforcers
Kosovo police stated on Monday that they closed six branches of Postal Savings Bank, licensed by the BRRB. The branches were operating “illegally,” the police added. Interior Minister Xhelal Svecla made the announcement. Police also removed the signboard of the Serbian Finance Ministry hanging over the main entrance of the six offices.
The rule of law and order, service to all citizens without any distinction will continue to be our goal to which we have continuously pledged.
Members of both the NATO-led peacekeeping force KFOR and the European Union’s rule-of-law mission EULEX arrived in the town of Mitrovica to monitor the situation around Serbian bank.
Belgrade spends about 120 million euros a year to fund a system of “parallel” institutions in Kosovo for the Serb minority. The institutions provide public services as well as ensure the loyalty of Kosovo Serbs.
Currency issue
Serbian Interior Minister Ivica Dačić criticised the closure of banks on Monday. He argued that Kurti “continues with the terror against the Serbian people in Kosovo.”
If the international community does not come to its senses, all this leads to new conflicts in the Balkans with unforeseeable consequences.
Kosovo unilaterally adopted the euro as its currency in 2002, despite not being a formal member of the euro zone or the European Union. Kurti stated that the move was aimed at protecting “all citizens of every ethnic community from the threats of organised crime, arms trafficking, and money laundering.”
However, Serbian Prime Minister Milos Vučević called the move “a new act of savagery that directly threatens the survival of the Serbian people in Kosovo.”
Kosovo and Serbia have held seven rounds of talks on the currency issue, but all have failed. Kosovo declared independence from Serbia in 2008 and Belgrade has yet to recognise the move. EU members Greece, Spain, Cyprus, Slovakia, and Romania also do not recognise Kosovo as an independent state.
Ethnic Albanians make up about 90 per cent of Kosovo’s population of 1.8 million. However, ethnic Serbs constitute a majority in several northern municipalities.
