Kosovo will ban the use of Serbian currency from Thursday, threatening to set off a new crisis in the region.
Ethnic Serbs in northern Kosovo have long used the Serbian dinar and often receive their salaries and pensions in the neighbouring nation’s tender.
But the Kosovo government has insisted that from tomorrow, the tens of thousands of ethnic Serbs who live in the north must fall into line with the rest of the country and use euros.
Western diplomats have warned that the government’s insistence that ethnic Serbs adopt the euro could lead to a renewal of clashes.
But the government is determined to push ahead, with the Central Bank saying that as of Thursday, “the only currency allowed to be used... in the Republic of Kosovo is the euro”.
Kosovo unilaterally adopted the euro as its currency in 2002, despite not being a member of the eurozone or the EU.
Severe ‘diplomatic and political consequences’
The currency dispute risks plunging the Balkan nation back into unrest, just months after a shootout between Kosovo police and masked Serb gunmen at a monastery close to the Serbian border left four people dead.
There are parallels between a two-year battle over car licence plates, in which thousands of ethnic Serbs continued to drive with Serbian-issued registration plates rather than those issued by Kosovo. Ethnic Serbs had resisted the change, sometimes resorting to violence.
The crackdown on the use of the dinar will help the fight against money laundering and corruption and is also a matter of national sovereignty, the Kosovo authorities say.
Zoran Ilic, a Serb living in the divided northern city of Mitrovica, told Agence France-Presse: “It seems to me that everyone is playing with us. Nobody tells us anything. I am fed up with politics.”
Bosko Jaksic, a political analyst in Belgrade, said that the “diplomatic and political consequences” of the move “will be far more severe than monetary ones”.
Serbia refuses to acknowledge Kosovo’s declaration of independence in 2008 and tensions between the two neighbours are one of the most serious flash points in the Balkans.
“We are concerned about the impact of the regulation in particular on schools and hospitals, for which no alternative process seems viable at the moment,” the US embassy in Pristina said in a joint statement issued by the US, Britain, Germany, Italy and France.
NATO countries call for transition period
“The regulation will also have a direct impact on the everyday lives of the overwhelming majority of Kosovo Serbs who receive payments/financial assistance from Serbia.”
The five NATO countries said the demand that ethnic Serbs switch to euros should be suspended to allow a longer period of transition.
But the request for a more gradual approach was met with anger on social media, with many Kosovars saying there should be no question that the country should use just one currency – the euro.
“Dear ambassador, would you allow Russian rubles to be used in Alaska?” one Kosovar man asked on X, formerly Twitter.
Another commented: “No country in the world has licence plates from two countries. No country in the world pays with two different monetary units.”
Vjosa Osmani, the president of Kosovo, said on Wednesday that she was in favour of “full implementation” of the currency regulation and that it was a constitutional right for the country to have just one currency.
But Ana Brnabic, the prime minister of Serbia, has warned that the enforcement of the regulation could damage the peace process with Kosovo beyond repair, derailing EU-sponsored talks between Belgrade and Pristina “once and for all.”
Kosovo fought a war of independence against Serbia in the late 1990s. It was brought to an end after a 78-day NATO bombing campaign forced Serbian forces to withdraw from Kosovo.
Amid continuing tensions, Serbia has raised the combat readiness of its military forces along the border several times in the last year.