Kosovo risks losing EU funds due to delays in setting up institutions. The lack of institutions also hinders the implementation of reforms, increasing the risk that funds from the Growth Plan will be lost by 2027. Analysts say Kosovo's relations with the EU are at their lowest level in at least a decade - with coordination and communication minimized.
Delaying the process of constituting the Assembly and creating a new Government could cost Kosovo the loss of funds from the European Union's Growth Plan for the Western Balkans, warn experts on European integration.
The Growth Plan, covering the period 2024-2027, contains a package of 6 billion euros, approved by the EU at the end of 2023, to support the approximation of the economies of the six Western Balkan countries to European standards.
To benefit from these funds, countries must complete reforms required by the EU, which include the private sector, green transition, and digitalization.
From this package, Kosovo can benefit from over 880 million euros, of which over 250 million as a non-repayable grant, while the rest in the form of a loan with favorable terms.
However, the country has not benefited from the part of the pre-financing - of 61 million euros - that has already been allocated to Albania, Montenegro, North Macedonia and Serbia.
These countries were also allocated new funds last week.
Bosnia and Herzegovina, which has not adopted the reform agenda and Growth Plan on time, is also left out of the benefits.
Kosovo was among the first to adopt the reform agenda, but funds remain blocked due to the lack of institutions to ratify the formal agreement with the EU.
"This sends a negative signal to Brussels, where the frustration of institutions and member states continues to grow, due to the behavior of the Kosovar political elite," Donika Emini, a researcher at the Balkan Policy Advisory Group in Europe (BiEPAG), tells Radio Free Europe.
The Kosovo Assembly was declared constituted on October 10, but, in the meantime, the process was contested in the Constitutional Court by the Serbian List.
The country also still remains with an incumbent government, even though the leader of the Vetëvendosje Movement, Albin Kurti, has received the mandate to form the new executive.
EU funds for Kosovo “could be redistributed”
According to Bekim Salihu, from the Institute for Advanced Research - GAP, delays in the constitution of institutions block not only funds, but also the implementation of reforms.
"Kosovo's inability to receive the funds should be translated as Kosovo's inability to carry out reforms. Reforms can of course be carried out in a certain period, but it is evident that their dynamics will be late, slow," he says.
Donika Emini is also in the same line.
She explains that not receiving funds from the Growth Plan does not mean that the money dedicated to Kosovo will automatically be lost. However, if Kosovo fails to attract and use these funds throughout the program period, the risk of loss is very high.
According to Emini, due to delays in the approval of the agreement by the Parliament and the lack of a Government with a full mandate, the implementation of the reform plan in Kosovo will begin much later than in some other countries in the Western Balkans.
"... and this penalizes it a lot. The country must gain access to funds by implementing the reforms of the agenda that has been approved by the EU. So, these are funds for which specific reforms must be worked for and implemented. Kosovo has already lost a lot of time," says Emini.
In the wake of this, she warns that the lack of reforms could block EU payments, leaving large sums unused until 2027.
“... and if at the end of the programming period the funds have not been used or the conditions have not been met, the EU can redistribute them [funds] to countries or projects that have met the conditions more quickly,” says Emini.
Emrush Ujkani, executive director of the European Investors Council, emphasizes that the Growth Plan is just one of the EU's tools in its agenda for the integration of the Western Balkans.
According to him, the EU will not stop the processes initiated due to delays by certain countries in meeting European criteria.
"In this regard, if the funds are not taken - this also applies to other instruments - they will be redistributed, which falls to them, not to us, but there will be redistribution to other countries that are in this process," says Ujkani.
According to him, the EU's planning regarding the implementation of the Growth Plan was to move forward consistently with all the countries of the Western Balkans.
"Therefore, there is no time to turn back a process that was planned at the right time. If [the designated country] has failed to take concrete actions, it will take responsibility itself," Ujkani tells Radio Free Europe.
He emphasizes that if Kosovo fails to attract EU funds for reforms, this does not mean that reforms will not be required - they will be financed later from Kosovo's own budget.
The European Commission announced in April 2024 that if Western Balkan partners do not meet the conditions, payments could be partially or fully suspended.
The European Commission also clarified that following such a suspension and “in case the Western Balkan partners do not fulfil the relevant conditions during a grace period of one year [or two years from the first year of implementation], the suspended amount will be withdrawn and may be redistributed among other beneficiaries in the following years”.
Kosovo-EU relations “at the lowest level”
Kosovo's delays in forming the new legislature and executive, since the parliamentary elections on February 9th until now, have made the situation more difficult in terms of official communication between Kosovo institutions and the European Union.
In August, EU officials announced that they would not hold meetings inside the Kosovo Government building until the country has a fully-fledged executive.
Emini emphasizes that this is a worrying message addressed to the Kosovo authorities regarding the lack of functional institutions.
"The channel of communication and coordination with the EU on reforms, as well as diplomatic relations between Kosovo and the EU, has been lost," she says.
Salihu sees these relations at their lowest level in the last decade.
According to him, in the absence of a government with a full mandate and a legally uncontested assembly, Kosovo finds it difficult to communicate with the EU on mutual relations and integration processes.
"You see, the possibility of Kosovo's membership in the Council of Europe is no longer mentioned, the possibility of lifting [punitive] measures against Kosovo is no longer mentioned. I consider Kosovo's relations with the European Union to be the lowest in the last 10 years, after the signing of the SAA [Stabilization and Association Agreement]," says Salihu.
Kosovo failed to join the Council of Europe in 2024.
The country continues to be under EU punitive measures, which were imposed in June 2023, due to rising tensions in the Serb-majority north of Kosovo.
Experts on European integration estimate that further delay in the formation of new institutions "maintains" the gap in relations between Kosovo and the EU.
According to them, it could deepen even further if the country eventually goes to early parliamentary elections, due to disagreements between political parties over the formation of new institutions./ REL
