Kosovo continues to lose millions, so much money can be jeopardised if agreement with IMF is terminated

Due to the lack of programmes of the International Monetary Fund (FMN), resulting from the failure of the new agreement, Kosovo risks losing even 50m euros from the European Union.

European Union Office in Kosovo, through written response, has told Radio Free Europe that performance under the IMF programme is of central importance in the EU assessment of macro-fiscal stability in Kosovo.

Therefore, according to them, the adoption and implementation of EU programmes will have to be assessed in this context.

“The EU, currently is preparing two budget support programmes to support the Public Administration Reform and Public Finance Management in Kosovo, worth 50m euros. To benefit support from the EU Budget Sector, a necessary criterion is macro-fiscal stability”, the Kosovo EU office's response to REL, says.

Agreements with the IMF have consistently helped Kosovo get loans under very convenient conditions, both from the World Bank and other international financial institutions, whose value has reached 400m euros.

Meanwhile, projects that cannot be addressed, in the event of the failure of the International Monetary Fund agreement, generally concern the improvement and economic development of Kosovo.

By the time the agreement was signed, Kosovo authorities had declared that these tools would focus projects on agriculture, irrigation of land, railway infrastructure and other projects in education and health.

The economic agreement, worth 185m euros between Kosovo and the IMF, reached in 2015 at a length of 22 months, expires in August of this year.

Kosovo authorities have stated that there are also 16m euros from this agreement that cannot be obtained loans, without having a fourth review of the agreement, from the IMF mission.

But that this mission, due to early parliamentary elections and the political situation created in the country, had not held meetings.

In Kosovo, early parliamentary elections had been held on 11 June, but since now new institutions in the country have not been achieved. The Kosovo Assembly Constituent hearing is scheduled to be held on August 3rd.

The 185m-euro economic agreement between Kosovo and the IMF was at risk of being interrupted even in 2016, when Kosovo's draft budget was at risk of disapproval.

The International Monetary Fund, of which Kosovo has been a member since 2009 in 2011, had cut off the Stand By Arangment Agreement with the Government of Kosovo, because the latter had deviated from the programme, respectively, due to the public sector's salary increase, without the mission's consent.