EU Funds and the Kosovo Crisis: Millions on Hold

The first tranche of funding from the EU Growth Plan allocated to Kosovo is currently “on hold” and will not be disbursed until a new Assembly is constituted and a government is formed. This delay may mark the first tangible consequence of the institutional crisis. Experts interviewed by Kosovo Online warn that the current impasse is costing the economy around three million euros daily, and if the situation escalates into early elections, the effects will not be limited to the economic sphere.

Written by: Djordje Barovic

Following the elections in February, Kosovo was expected to receive €61 million as an initial pre-financing installment of the €880 million foreseen under the EU Growth Plan for the Western Balkans. However, the disbursement is on hold because the agreement must first be presented by the Government of Kosovo and subsequently ratified by a two-thirds majority in the Assembly.

According to European affairs experts, even in the event of swift institutional formation, the ratification procedures would take at least two to three months.

President of the Kosovo Chamber of Commerce, Lulzim Rafuna, stated that the political crisis and the failure to form institutions are having a detrimental impact on the economy, putting development projects at risk.

He emphasized that one of the most significant consequences of the lack of functional institutions is the inability to access EU funds, including those allocated through the EU Growth Plan.

“We are facing difficulties with EU funds, particularly those intended to arrive through the Growth Plan, which we cannot access without parliamentary ratification. This will inevitably affect the economy and foreign investment,” Rafuna noted.

Cooperation on Hold

Helena Ivanov, Research Fellow at the Henry Jackson Society, has no doubt that Kosovo’s engagement with the European Union—including the Growth Plan funding—will remain on pause until the Assembly and a stable government are established.

“As long as Kosovo lacks a functioning Assembly and government, we can expect its engagement with the EU to remain completely frozen. The EU has expressed its wish—and issued a call—for the government to be formed swiftly so that the country can resume operations and begin implementing the reforms the EU expects. Until the crisis is resolved, neither the awaited funds will be released, nor the reforms implemented, nor will Kosovo–EU relations function normally,” Ivanov told Kosovo Online.

A potential outcome of the institutional crisis could be early elections, which Ivanov sees as an increasingly likely scenario given the slim chances of forming a stable government.

“Even if a government is eventually formed, it is unlikely to be stable. I believe Kosovo is heading toward new elections. Whether they happen immediately, due to failure to form a government, or soon after a fragile government is formed remains to be seen. But unless a clear majority-backed government emerges, this crisis will only deepen,” she assessed.

Ivanov further affirmed that in the case of early elections, relations with the EU would remain on hold.

“If new elections are held now, everything Kosovo expects from the EU will be paused until those elections are completed and a new majority is able to form a government and resume negotiations and cooperation with EU institutions,” Ivanov stated.

She also emphasized that the same applies to the EU-facilitated dialogue between Belgrade and Pristina.

“The normalization process between Belgrade and Pristina has not been functioning properly for some time. More than a decade after the Brussels Agreement was signed, the Community of Serb Municipalities has yet to be established. Recent rounds of dialogue, including those in Brussels and Ohrid, have yielded little progress. Meanwhile, former Prime Minister Albin Kurti’s government undertook a number of unilateral actions that frustrated the EU and Kosovo’s Western partners, resulting in the imposition of certain measures,” Ivanov recalled.

In the absence of a formal government, Ivanov argued, Kosovo lacks the legitimacy or mandate to engage meaningfully in the normalization process, making progress in the dialogue unlikely.

The future of negotiations, she added, will largely depend on who is appointed as the next Prime Minister.

“Many analysts—myself included—believe that Kurti’s inability to secure a parliamentary majority stems largely from his approach to normalization. Many Kosovars were dissatisfied with his unilateral strategy, viewing it as too costly in terms of deteriorating relations with Western partners. Should Kurti return to office, the question will be whether he continues his previous policy or adapts to repair those ties. If a new leader emerges, their approach remains to be seen,” Ivanov explained.

Political Responsibility

President of the Kosovo Business Alliance, Agim Shahini, warned that the failure to form institutions and ratify the EU funding agreements is costing Kosovo €3 million per day, and that the decision to move toward elections risks losing everything.

“As you can see, everything in Kosovo is blocked—from the government to the parliament. The prevailing mentality is that if there is no government and no parliament, then nothing proceeds as planned. Each day of delay costs us around €3 million. When we consider the total €880 million waiting to be ratified in the Kosovo Assembly under the EU Growth Plan, the stakes are clear,” Shahini told Kosovo Online.

He placed responsibility on the newly elected MPs and political leaders for prioritizing personal and party interests over those of the state.

“Our parliamentarians and political party leaders—regardless of their affiliations—are responsible for the loss of these funds. They have failed to find a compromise to form the Assembly and the government. Their personal interests have been placed above the national interest, which should prevail,” Shahini stated.

He warned that if the impasse leads to snap elections, Kosovo risks forfeiting all available funds.

“The EU Growth Plan for the Western Balkans comes with clear criteria. Until these agreements are ratified by parliament, the delay will continue. If we head into new elections, we risk losing all access to these funds,” he cautioned.

Escalatory Politics

Dimitrije Milic, Program Director of the "New Third Way" organization, noted that while the delay in disbursing the first tranche of EU Growth Plan funds may be seen as a consequence of the institutional crisis, it is in fact more a reflection of the escalatory policies pursued by Pristina.

“I would argue that the more fundamental issue with the Growth Plan funds stems from the previous government’s escalatory policies. The majority of criticism directed at Kurti’s government centered around actions taken without coordination with Western partners, which disrupted interethnic relations,” Milic told Kosovo Online.

He emphasized that Brussels insists on financial accountability when it comes to disbursing EU funds.

“The institutional crisis creates uncertainty—who is representing the government in talks with the EU, who is implementing the programs, and who is managing the allocated funds? This unpredictability raises concerns in Brussels about whether the institutional capacity exists to use the funds effectively and for their intended purpose under the Growth Plan,” Milic explained.

Nonetheless, he believes the delay is more a symptom of the EU’s growing mistrust in the previous government’s ability to manage crises or avoid creating them—especially with respect to the failure to establish the Community of Serb Municipalities.

“This mistrust has forced Western partners to devote more time and attention to resolving the crisis, diverting resources from other global priorities like Gaza or Ukraine. The delay in disbursement reflects a deeper skepticism regarding the Pristina government's ability to govern responsibly,” he added.

Milic concluded by noting that the punitive measures against Pristina also reflect this skepticism.

“I would say the existing, albeit mild, isolation of the government in Pristina is a result of its escalatory stance—an approach Western powers do not support and one that is currently unhelpful in the broader international context and for regional stability in the Western Balkans,” Milic emphasized.