May 15, 2024 - Brussels witnessed another round of unsuccessful negotiations between Kosovo and Serbia regarding the usage of the Serbian dinar for cash transactions. Despite efforts by Miroslav Lajčák, the EU envoy, to broker a compromise, details remain elusive, leaving both sides pointing fingers at each other for the impasse.
The sticking point revolves around a recent regulation by the Central Bank of Kosovo, mandating the euro as the sole currency for cash payments within Kosovo since February 1st. Belgrade opposes the ban on the Serbian Dinar in northern Kosovo because it’s an essential economic tool for local Serbs, represents political resistance to Kosovo’s independence, and supports parallel services funded by Serbia. The sudden ban could disrupt essential services and escalate ethnic tensions, as it was implemented without adequate consultation or transition time. Western diplomats expressed concerns about the impact on Kosovo Serbs, who rely on financial support from Serbia.
Diplomats have urged Kosovo to reconsider the regulation to provide affected citizens time to adapt. However, the issue has become a sticking point, highlighting broader tensions between Kosovo and the west.
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