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Kosovo adopts euro, allows 'transitional period' for Serbian dinar

Kosovo's Central Bank suggested the Serbian dinar would not be used in the country from February onwards but the government said it will allow a transitional period after the US, UK and other countries raised concerns.

AP

Kosovo's official currency is the euro, but the majority of its 5 percent Serb minority community also uses the dinar as part of their refusal to recognise Kosovo's statehood. / Photo: AP

Kosovo has adopted the euro for cash and payment transactions, effectively eliminating the Serbian dinar, despite concerns expressed by ethnic Serbs living in the country's north.

But Kosovo Serbs in the ethnically divided town of Mitrovica carried on using Serbian dinars on Thursday after the government said it would allow a transitional phase before the currency is fully outlawed.

The Central Bank announced the decision on January 18, saying currencies other than the euro can only be used in Kosovo for physical safekeeping or bank accounts from February 1.

The move sparked outrage because, until now, ethnic Serb communities in Kosovo had used the dinar, the official currency of neighbouring Serbia, in both state and commercial institutions.

Many local Serbs have an attachment or even allegiance to Serbia.

"No one tells us anything about this. We only hear about it through the media. Nobody tells us what will happen. I anticipate that it will be resolved quickly, as we need to receive our pension within 10 days,” Stanica Trajkovic, a local Serb living near the capital Pristina, told Anadolu Agency.

Kosovo urged to postpone decision to replace Serbian dinar with euro

Rising tensions

Earlier on Wednesday, Kosovo's First Deputy Prime Minister Besnik Bislimi said at a press conference that the government will focus entirely on informing businesses and citizens in the process, which he called the “transitional phase.”

"We will not implement punitive measures immediately, however we will invest time in informing Serb citizens" about the ban, Bislimi told a press conference.

"The government of the Republic of Kosovo is committed to eventual transitional periods so that citizens can adapt as quickly as possible, as easily as possible and with minimum damage done."

Western countries, including the US, France, Italy, Germany, and UK, have already urged Kosovo to halt implementation of the currency regulation.

A European Union spokesperson said in statement on Thursday the EU is concerned about the consequences that the decision to ban the dinar "might have on the daily lives of Kosovo Serbs... in particular on its impact on schools and hospitals."

Serbia still does not recognise Kosovo's 2008 independence, and the northern region where half of the 100,000 Serb minority lives has witnessed frequent ethnic violence.

The worst violence culminated in September last year when Serb gunmen attacked Kosovo police in the north village of Banjska, resulting in the death of one police officer and three gunmen.

After 25 years since the war ended the country of 1.8 million is still guarded by NATO troops which reinforced their presence with another 1,000 troops after last year's violence.