Kosovo to Adopt Euro as Sole Currency Amid Potential Controversy

In a significant move that could spark controversy, Kosovo is set to adopt the euro as its sole currency for cash transactions and payment operations starting February 1. A decree issued by the country's Central Bank will put into effect this change, a departure from a dual-currency system where predominantly Serbian communities within Kosovo have been using the Serbian dinar to conduct various institutional and commercial activities, reflecting their cultural ties and loyalty to Serbia.

Repercussions of the Monetary Transition

Given the history of unrest following similar decisions, such as the ban on Serbian license plates in September 2021, this monetary transition is likely to stir controversy. The Serbian dinar flows into Kosovo through a vault located in Leposavic, close to the border with Serbia, supplied by the National Bank of Serbia. Thousands of families receiving salaries and pensions in dinars might face implications due to this change, and the healthcare and education systems in Serbian institutions could also be affected.

Serbian Concerns and International Silence

Expressing concern over this shift away from the dinar, Serbian President Aleksandar Vucic suggested it could negatively impact the ongoing normalization and dialogue processes between Kosovo and Serbia. The decision has sparked tensions and raised concerns about the potential expulsion of Serbs from the north of Kosovo. Criticisms have also been levied against the international community for their silence and inaction to prevent this situation.

Kosovo's Path to Independence

Kosovo, predominantly inhabited by ethnic Albanians with a minority Serbian population near the northern border, proclaimed independence from Serbia in 2008. While most UN member states, including significant powers, recognize Kosovo's independence, Serbia continues to claim it as part of its sovereign territory. This adoption of the euro as the only currency is a further step in Kosovo's assertion of its autonomy.

After the euro's adoption, other currencies will be permitted only for safekeeping in physical form or within bank accounts, according to the new regulation of the Central Bank of Kosovo. This regulation repeals all other provisions that are contrary to it, reinforcing the euro's dominance in the country's monetary system.