Security Council debates Kosovo’s new rules on Serbian currency

Trust building, not unilateral actions, are the linchpin in forging a peaceful path forward for Belgrade and Pristina, the UN’s top official in Kosovo told the Security Council on Thursday, as the body called an urgent meeting at Serbia’s request to debate new banking regulations that have triggered fresh tensions.

The Prime Minister of Kosovo and Serbia’s President joined Council members in a heated discussion centred on new rules, which came into force on 1 February.

The Central Bank of Kosovo regulation made the Euro, not the Serbian dinar, the only currency allowed for cash transactions. Kosovo declared independence in 2008, but it is not recognized by Serbia.

Briefing the Council, Caroline Ziadeh, the Special Representative of the Secretary-General and head of the UN Interim Administration Mission in Kosovo (UNMIK), said the new regulations will affect tens of thousands of Kosovo-Serbs living in four northern municipalities and, more broadly, the economy, which depends on their purchasing power.

She said limited public explanation was offered, despite the fact that, since 1999, the dinar has served as the de facto primary currency for cash and commercial transactions in Kosovo-Serb majority areas.

“Regardless which side takes them and what justifications are provided, and in the absence of unambiguous public communications, such actions predictably exacerbate an environment of insecurity and mistrust,” she said, adding that unilateral actions are “cause for great concern”.

Recent incidents

Despite positive momentum at the end of 2023, from an energy road map to customs documentation, she raised concerns about recent incidents.

On Thursday, a cash-transfer truck was prevented entry into Kosovo, while some four million dinars confiscated by the Kosovo police on 3 February in the Pejë/Peć municipality still await judicial and administrative action, she said.

Tensions between authorities in Kosovo and Serbia have periodically erupted in recent years, including differences over vehicle licence plates and anti-smuggling operations alongside spates of violence.

“Neither the Central Bank of Kosovo’s new regulation, nor these recent Kosovo police operations, have contributed to de-escalation, as repeatedly called for by international interlocutors,” she said.

Belgrade and Pristina talks

Kosovo and Serbia have been involved in European Union-led talks for more than a decade with a view to normalizing relations, but negotiations stalled last September following a shootout between a Serbian man and Kosovo police that left four dead.

Calling on Pristina and Belgrade to continue their dialogue, the Special Representative said that upholding the rule of law is critical, and all related actions must be anchored in the principle of human rights.

“It is crucial that efforts towards negotiated and mutually accepted solutions do not falter,” she said. “Continuous effort to build greater mutual trust and respect are the only viable path to stability, prosperity and security.”

For a full summary of this and other meetings, visit UN Meetings Coverage in English and French.