Kosovo’s decision to accept only the euro within its borders sparked concerns over escalating relations with Serbia, as Serbs in the north of the country insist on using Serbian dinars, Euractiv reported.
Last week, the Central Bank of Kosovo announced that a Regulation of Cash Operations would come into force on February 1. In order to combat counterfeit money and other forms of financial crime, the document states that the euro is the only currency allowed for cash and digital payments in the country.
The regulation states that other non-euro currencies can only be used as valuables to be held in physical form, in non-euro bank accounts, or for foreign exchange purposes.
Kosovo adopted the euro back in 2002, with the constitution stressing that the country has “one single currency,” but some Serb-majority municipalities use dinars. In addition, Serbian banks in Kosovo, Kosovo Serbs receiving pensions from Serbia, and employees of institutions that are still part of the Serbian system, such as schools and hospitals, use only dinars. In Serb-majority neighbourhoods, payments in shops and cafes are also made in dinars.
Serb List, the country’s main Serbian political party, whose former deputy leader Milan Radojičić recently resigned after admitting to involvement in clashes in the village of Banjska, has opposed the decision to use only the euro in Kosovo. Party members claim this amounts to “expulsion of Serbs without the use of weapons” and “directly threatens the physical survival of the Serbian people.”
EU spokesman Peter Stano stated that the European Commission was analysing Kosovo’s decision and seeking clarification.
“We are still analysing and seeking explanations about this decision, the reasons for its adoption, motivations, and possible implications. In general, Kosovo and Serbia are expected to avoid uncoordinated actions that are not conducive to the normalisation of relations, and that could have a negative impact on stability on the ground.”
The Central Bank explained that voluntary transactions between parties using currencies other than the euro are outside the scope of the regulation, and the exclusive use of the euro is enshrined in Kosovo’s constitution. Therefore, the regulation simply establishes its compliance.
Serbian President Aleksandar Vučić also condemned the decision:
We will use all available means against the banning of the dinar in Kosovo.
Vučić also called on EU Commission President Ursula von der Leyen to use her powers to prevent the implementation of the new rule.
Germany announced at the weekend that it was increasing its KFOR (the Kosovo Force) military presence in northern Kosovo amid a deteriorating security situation. The number of German soldiers stationed in Kosovo will increase from 80 to 300, including support personnel.
