Dinar issue puts Kosovo-United States relationship to the test

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The risk of disrupting the partnership between Kosovo and the United States has troubled a portion of the public opinion, which considers the relationship between the two countries as “existential”.

“Anyone who doesn’t understand this doesn’t deserve to lead institutions,” said Avdullah Hoti, an opposition member in the Kosovo Assembly.

Government officials, however, attempted to alleviate concerns, insisting that they “consult and coordinate with allies”. Prime Minister Albin Kurti stated that Kosovo “doesn’t have a partner, ally, and friend as important as the United States”.

The reactions came after U.S. Secretary of State assistant James O’Brien stated that the U.S. is “very concerned with the decision of the Kosovo Government not to allow the use of the Serbian dinar” in Kosovo.

In an interview with Voice of America, he said that Kosovo should withdraw from this decision that “calls into question its partnership with the United States”.

However, Prime Minister Albin Kurti, speaking on Wednesday at an event in Prizren, said that the Central Bank of Kosovo (CBK) has already presented its plan for implementing the regulation.

The 10-point plan envisages, among other things, easing conditions for opening bank accounts and temporarily suspending the CBK fee for opening bank branches.

The Government “does not supersede independent state institutions, such as the Central Bank of Kosovo”, said Kurti, adding that Kosovo’s partnership with the United States is not at risk.

“The Republic of Kosovo doesn’t have a partner, ally, and friend as important as the United States. This is how I perceive it and cooperate as Prime Minister of Kosovo,” he said.

What does the opposition say?

For Ariana Musliu Shoshi, a member of the Democratic Party of Kosovo in the opposition, the partnership with the United States is by no means to be shaken.

According to her, this partnership is much more valuable than any decision regarding Kosovo’s rights.

“… because, only in partnership with the United States, can we strengthen international subjectivity, but also internal politics,” she told Radio Free Europe.

Musliu Shoshi adds that none of Kosovo’s allies, including the United States, has stated that Kosovo doesn’t have the right to make decisions that are in line with the law, but to find implementation, “they must be coordinated with the allies”.

Avdullah Hoti, from the Democratic League of Kosovo, also in the opposition, said that the statements of U.S. Secretary of State assistant O’Brien should be taken very seriously.

“Kosovo’s relations with the U.S. are existential. Anyone who doesn’t understand this doesn’t deserve to lead institutions. The bearers of the country’s institutions are obliged to maintain these unshakable relations,” Hoti wrote in a Facebook post.

“The actions of the Kosovo Government should be in harmony with the positions of its international allies,” insisted another opposition member of parliament, Time Kadrijaj, from the Alliance for Kosovo’s Future.

What do analysts say?

While opposition representatives do not directly state whether the Government should withdraw the decision or not, some analysts are more decisive.

“The Kosovo Government needs to reflect and withdraw from the decision to ban the dinar,” said Agon Maliqi to Radio Free Europe.

According to him, O’Brien’s statements contain “threatening tones” and “are accompanied by a kind of disappointment” with Prime Minister Kurti.

“[Withdrawal] may be problematic internally, to justify this, but I think with political will, there is room for withdrawal from this decision,” says Maliqi.

According to him, the Kosovo Government should be careful about how it builds its relationships with a strategic partner like the United States.

David Kanin, a professor of European Studies at Johns Hopkins University in Washington, does not rule out the possibility that the United States will impose sanctions against Kosovo, but emphasizes that it “will not go so far and simply cut off relations with Kosovo”.

Speaking to Radio Free Europe, he said that Kosovo should postpone the implementation of the dinar decision as much as possible or revoke it altogether.

“The Americans do not want Kurti to do things that stir up trouble in a region that the West truly wants to be calm, as it deals with everything else happening in the world,” says Kanin.

According to him, Kurti’s actions “help Serbia” and “make everyone forget about Banjska” – the village in north Kosovo where a group of armed Serbs attacked the Kosovo Police in September last year, killing a policeman.

Kanin says that the United States, which supported Kosovo’s declaration of independence 16 years ago, “protects Kosovo”.

How do dinars enter Kosovo?

Article 11 of the Kosovo Constitution defines “a single currency” as the valid means of payment in Kosovo.

However, for years, dinars entered Kosovo through the National Bank of Serbia, which has a branch in the municipality of Leposavic, in north Kosovo. Those funds were then transported by the money transport company Henderson.

Some blame the Kosovo Customs for allowing such a practice, as the CBK is the only authorized institution for the import and export of euros and other currencies in Kosovo.

The head of the CBK, Ahmet Ismaili, mentioned financial integrity as the main reason for implementing the new regulation.

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