Dinar ban will damage EU-led Kosovo-Serbia dialogue

Significance

A Central Bank regulation reaffirming the euro as sole legal tender has alarmed Kosovo’s Serbs who see it as a direct threat to their existence and is jeopardising already complex relations between Prime Minister Albin Kurti and key Western capitals.

Impacts

• The dinar issue will disrupt implementation of other agreements within the dialogue, including establishing the ASM.
• Reintegrating Serbs into Kosovo’s institutions will remain a major challenge.
• Vucic will use Kosovo Serbs’ hardships to shift attention from the upcoming repetition of local elections in Belgrade.
• If the crisis lasts, there may be renewed calls for the partition of Kosovo, an idea Belgrade and Prishtina discussed in the 2010s.