US special envoy for the Western Balkans, Gabriel Escobar reiterated the US’s position on immediately addressing the Kosovo Central Bank, CBK, regulation on cash operations, describing it as “an emergent humanitarian issue”. Escobar’s comments came after a two hour meeting with Kosovo PM Albin Kurti on Thursday, March 14th. 

Escobar told the media that “the treatment” of the Kosovo Serb community has caused “challenges” in the relation between the US and Kosovo, explaining that “it is unfortunate that we have to go the CBK decision (on the euro-only policy which led to the ban of dinar for transactions) has caused real hardship for some of the citizens of this country and we are very concerned”.

The US special envoy emphasized that Kurti promised to consider some proposals that were made to him.

However, in an interview for Radio Free Europe, RFE, on Friday, March 15, Escobar announced that he was not able to convince Kurti to suspend the decision.

“I asked the Prime Minister to suspend the decision while we, together with the European Union, the United States and the Government of Kosovo, work on a longer term solution that suits your (Kosovo’s) needs,” Escobar told RFE, mentioning that a potential solution could have involved “electronic transfers of Euro through the Kosovo system. But right now we have to do something urgently”. 

“Unfortunately I was not successful in convincing him (PM Kurti) on that,” Escobar added.

An announcement by the Kosovo Prime Minister’s Office on Thursday, March 14 after the meeting between Kurti and Escobar, claimed that the discussions on the CBK regulation were substantive and focused on “addressing common concerns”.

“Due to the impact of the regulation on the Kosovo Serb community, the government has taken steps to ensure that the transition is quick and easy for the citizens of Kosovo from the Serbian community”, the announcement read.

The Central Bank regulation, which entered into force on February 1 despite international calls for a postponement, aims to fight counterfeit money. It enforces a euro-only policy, and thus bans transactions in Serbia’s currency, the dinar. Dinars are still used daily by Kosovo Serbs, especially in the Serb-majority north.

Escobar also told RFE on Friday that PM Kurti has not made any move yet to send the draft statute to the Constitutional Court for constitutional review.

The absence of the Association and the dinar issue, according to Escobar, means that the United States is having a hard time lobbying countries which do not recognise Kosovo’s independence,  who’s support is critical regarding Kosovo’s candidacy for NATO and for the European Union.

The European Union confirmed on Friday, March 15, that the Special Representative, Miroslav Lajcak, has invited the chief negotiators from Kosovo and Serbia for a meeting on Tuesday, March 19,  within the framework of the EU dialogue.

The EU spokesperson, Peter Stano, said that the discussions regarding the CBK decision will continue and the issue, which is among the most urgent in the EU dialogue, will be discussed between Kosovo and Serbia’s chief negotiators. Other topics of discussion, which have been raised at the negotiating table, include the Association of Serb Majority municipalities and Ohrid February 2023 deal.

On February 27, representatives of Kosovo and Serbia, Kosovo’s Central Bank Governor Ahmet Ismajli and the chief negotiator of Serbia, Petar Petkovic, met in Brussels regarding the decision of the Central Bank of Kosovo on the dinar currency, but there was no result. The envoy of the European Union for the Kosovo-Serbia dialogue, Miroslav Lajcak, stated that many political questions still remain unanswered.