EU funds suspension costs Kosovo over 613m euros, damages affected energy, environment and businesses

The EU imposed punitive measures against Kosovo in response to the government's actions in northern municipalities, where the situation escalated following elections boycotted by local Serbs. The measures include the temporary suspension of some funds, the ban on high-level visits and the interruption of Kosovo's participation in regional EU meetings.

GAP Research Co-ordinator Jouron, last show “Pilla”, says 7.1m euros have been finally lost, as some IPA 2020 projects failed to contract before the deadline expired. According to her, the most affected projects are those in the environment, energy, digitalisation and culture.

“Since June 2023, The EU has set several measures for Kosovo, one of which has been the suspension of funds under two key instruments. So the IPA instrument, and the investment framework for the Western Balkans. According to our estimates, the total value of projects suspended during this two-year period -- by May 2025 -- was 613.4m euros -- of these 218m euros have been from the IPA instrument, while 395m euros from the Western Balkans' investment framework. Of these, about 7.1m euros have been completely lost. These 7.1m euros included several agreement projects The IPA 2020, which has expired and has not had time to contract these projects. These projects, worth 7.1m euros, are in some areas, about 3m euros, have been in the area of competitiveness and innovation, about 1.3m euros have been in the area of rule of law, and three projects worth 2.8m euros belong to the agriculture and rural tourism sectors... on suspended funds, energy is one of the sectors affected most, while the environment is the sector that has been affected at the highest, projects worth 350m euros, in energy are affected about 117m euros, in the 56m euros digitisation and culture of around 151m euros, it says.

In addition to financial damage, the measures and political stalemate are hitting Kosovo's legitimacy on the international stage.

According to GLPS researcher Besar Grogi, the risk is not only economic but institutional and strategic.

When we talk about EU measures towards our country they have an undeniable financial cost, but they carry a political and diplomatic cost to our country. Our country is represented as a country that is defacto under EU sanctions, and this Serbia uses for its campaign against our country ... Another damage is done to Kosovo's European integration. At the end of 2022, we have submitted an application for EU membership, and we only know that our path to membership is very difficult because of the five non-recognitional countries, but with the introduction of these measures, it has become impossible to discuss the application without removing these measures at once. These are serving as an additional barrier on Kosovo's road towards European integration. The damage done to Kosovo is strategic, long-term, and must be removed as soon as possible”, he says.

On the other hand, Klisman Kadiu, deputy prime minister in charge of European Integration Besnik Bislimi, in a written response to the “show. Pilla”, states Kosovo has met the requirements for removing measures from the beginning, citing the Bratislava Agreement.

Kosovo has met the steps required by the EU for removing measures at the very top of the occasion (the Bratislava Agreement), but such agreement by the union had come only last year through the recommendation of the then senior EU representative Josep Borrell to remove them. The measures since they were decided have been specified by the EU that they are returnable and not permanent. Therefore, even funds that still remain suspended are irreversible and are expected to be released following, as the removal of gradual measures started by July. So far they have resumed holding subcommittee meetings within the SAA, as well as releasing Kosovo projects and applications within the framework of the Investigative Framework for the Western Balkans (WBIF)”, the written answer is said.

He stresses that tensions in the north are not caused by Kosovo.

In your question that ;A is due to tensions in the north of the country, it should be specified and specified, that Kosovo has never raised or provoked tensions, either in the north or in any corner of the country. The cases where our institutions and our country have been attacked (attacks against municipal buildings May 2023, the kidnapping of our police officials, Banjska, the several-time deployment of barricades in the north in 2022) have been produced, created and organised by Serbia through groups and criminal structures conducted by official Belgrade”, Cadiu notes.

show “Pillar” has also asked questions to the European Commission, to better understand which measures have begun to be removed and how much Kosovo has lost, but the same have not returned.

However, European Union diplomacy chief Kaya Kallas had declared that the gradual removal of the measures towards Kosovo, imposed in June two thousandths, but had not explained when it started and what measures could have been removed so far.

That these measures have caused damage to the country's private sector and development, says Kosovo Chamber of Commerce and Industry Chairman Skender Krasniqi.

Krasniqi calls the suspension of funds and lack of functional governance as the main factors blocking economic development.

“is becoming more than two years since we're following sanctions and suffering for lack of these tools so necessary for the development of the country, and that sanctions are not even known when they will stop. So this is going to go on. This has greatly damaged our country, especially on large and regional projects, but also on its own state projects, so that as soon as it adapts to the European market, but also with legal infrastructure, the projects it has IA. Failure to take these means, the loss of these hundreds of millions is in this situation, where Kosovo is in a major crisis of lack of revenues, as a result of poor government policies. It's damaging our country, and stopping the country's development in an extraordinary way. A lot of projects that had to be carried out remained, and they don't know when to do it. The tremendous damage it's causing to business and state itself... Any cent missing from the business market is a loss for the country itself, loss for citizens, workers and businesses themselves. Lack of these tools, and not knowing when these tools will start taking over in the future is seriously damaging business, and the state itself, because it is not known when the aloation of the vehicles will begin from now on”, he said.

But besides lack of funds, the problem remains the lack of a functional government. Kosovo is the leader in the region for the lowest debt, unlike countries like Montenegro and Macedonia, which have levels of 3H4 times higher.

It also criticises the lack of co-operation with Government, especially with the Kurti cabinet, for failing to realise promises and the lack of support policies in crisis times such as pandemic and inflation.

“We unfortunately in recent years, especially with Kurti Government we are facing lack of communication, lack of co-operation, even when we have behind governments with full mandate. Their arrival has also been a hope for business and citizens, who will be able to postpone these projects. Unfortunately, most promises given by the Kurti Government have not been realized. Especially are we talking about COVID's time, when Kosovo and the world itself have to make changes in policy ways that suit my business to keep the jobs and to survive citizenship and business because of inflation. But even the citizen has suffered a lot because he has undergone emotional growth in spending, lack of income. A salary of 500 euros, while now with 800 euros is not enough due to inflation, as a result of failing to bring money into the market on the part of the government or investment as other countries have done... While our country has done the opposite, has reduced public debt. We are now in a government shortage, almost a year ready, it is not known when there will be, there will be a lack of means, no investment and no knowledge on the part of business when there will be a change, because it is not known how long this political stalemate will continue”, Krasniqi says.

According to him, while Kosovo faces a lack of political stability, the economic consequences are also gathering in terms of worsening the trade deficit.

Because we from 2020 through the end of 2024 have doubled import, which is the tragedy of our country, means rising prices and increasing costs on the part of citizens and businesses, and lowering profits, which postpones investors' failure. We don't even have a request, there are after demands and arrivals, during this time we don't even have the request of foreign investors to come to Kosovo, as a result of this situation. We out of 3.2 billion have gone by 6.5 billion at the end of the year. This year we have even more deficit growth, import, which means citizens' poverty, while export is very small compared to import”, Krasniqi underlines.

In the end, Krasniqi appealed state institutions to reform fiscal policies to do business.

The request is that the first-ever party create institutions, take seriously the dire state of citizens and workers, business, boost cooperation with citizens, businesses, with those establishing incomes for citizens and the state, which is business. Make real strategies how to develop. Let's create a internal trade law so that every 50 meters no gasoline pumps can be created or any 5m, 10m a cafe or market, but stop this, so that this money can go, it can be guided to politics, offers, increased domestic production, export growth. Because money is coming in, but in the wrong place and the state for lack of laws is harming citizens who are investing in allowing the opening of a market or construction. It should be urgent to stop construction, because construction is in disproportionate with need and no state allows investment where there is surplus... the city, the business, or the one who is willing to invest in investment somewhere, where the profit opportunity will be greater”, he says.

Otherwise, Klisman Cadiu, deputy prime minister in charge of European Integration, Besnik Bislimi, said the EU would soon begin with the functioning and holding of SAA subcommittee meetings with Kosovo and the Investment Framework Technical Assistance projects for the Western Balkans (WBIF), affecting areas like energy, other infrastructure.