The EU Growth Plan and Kosovo - Money on the Table without the Community of Serb-majority Municipalities?

The first disbursements from the European instrument "Growth Plan for the Western Balkans," offering six billion euros in aid to the region from 2024 to 2027, could start in just a few months. However, besides the generalized formulation defining a specific precondition for Kosovo and Serbia to access these funds, which relates to constructive engagement in the normalization process, it is not specified what such constructiveness would entail for Kosovo.

The formation of the Association/Community of Serb-majority Municipalities (CSM) has been speculated about, but no one takes seriously the scenario where the EU imposes tangible conditions on Kosovo regarding the CSM. Even for membership in the Council of Europe, they received support in the Parliamentary Assembly despite the CSM being the primary condition.

If the "constructiveness" of the Kosovar side in the normalization process isn't fulfilling the obligation accepted in the dialogue eleven years ago and ratified in the Kosovo Assembly, then what would it represent?

Things will likely become clearer after the European Parliament's final plenary session next week, where the Growth Plan will be voted on. Common preconditions for all Western Balkan states include macrofinancial stability and good public financial management, which will be assessed before each disbursement, scheduled to occur twice a year.

"In case payment conditions are not met, the Commission will suspend or refuse the corresponding amount. The Western Balkans partner will have one to two years to meet the conditions, or else the amount will be redistributed among others in the following years," as defined by the European Commission.

Given this proposition warning that the money may change its intended destination, Safet Grxhaliu, former president of the Kosovo Chamber of Commerce, says it would be a great loss if those who have projects, political stability, and guarantee European perspective end up receiving aid due to the unresolved Belgrade-Pristina issues.

Regarding what progress in the normalization process would mean for Kosovo, Grxhaliu told Kosovo Online that we are all witnessing numerous signed agreements between Kosovo and Serbia, with the main problem being their implementation, as in the case of the Association/Community of Serb-majority Municipalities (CSM).

"The more this is delayed, we will certainly be hostages to not having the opportunity to absorb all those funds. Dialogue has no alternative, the longer this prolongs, the more we all lose, and that does not contribute to the future in the European family. Resolving this open issue surely opens a new perspective not only for Kosovo but for all citizens of Kosovo and even for Serbia. It should be understood that compromises and sacrifices are needed for significant projects and decisions, and people must start thinking much more about citizens and the state, not just about parties and government," Grxhaliu said.

He emphasizes that the summit in Tirana, where a budget of 6 billion euros for the Western Balkans until 2027 was presented as part of the EU Growth Plan, was of great importance. Additionally, there is another dimension of support for the region until 2030, within which around 20 billion euros will be distributed.

"We all need to understand how important dialogue is in reaching final decisions or solutions. It would be a shame to miss this opportunity because there are several dimensions from which not only Kosovo and Serbia but the entire Western Balkans would benefit. This includes education, digitalization, infrastructure..." Grxhaliu says.

Helena Ivanov, a research associate at the Henry Jackson Society, believes it's absolutely necessary for Kosovo to form the Association/Community of Serb-majority Municipalities (CSM), which has been awaited for 11 years. She argues that it would be fair and responsible for the European Union to insist that the Western Balkans Growth Plan, which includes funds for Kosovo, be used as a "carrot and stick" mechanism.

"I hope these packages, as the EU has envisaged, will be used somehow as a carrot and stick mechanism for Serbia and Kosovo to fulfill what they agreed upon. A significant reason why the situation in Kosovo is as it is lies in the fact that the EU, as a mediator in the normalization process, did not do its job properly. The CSM is a key stumbling block in the normalization process. The fact that agreements are constantly signed or verbally accepted but not implemented in practice, and that the EU should bear responsibility for implementation, with nothing having been done, is a problem for the EU. I hope we will finally see the EU take action when parties refuse to implement what they agreed upon," Ivanov tells Kosovo Online.

Asked whether economic reasons would prompt Pristina to start implementing the CSM agreement if it were a precondition for Kosovo's access to European funds from the Growth Plan, Ivanov says she cannot assert whether that would be a sufficient motivation for Kosovo.

"But if we look at the practice, not only in the case of Serbia and Kosovo but generally, we can see that the economic factor as motivation to implement something that needs to be implemented has generally been effective. I can only hope that conditioning these packages on the normalization process progressing as it should, and finally being completed, will be enough for Kosovo to form the CSM and for both sides to implement what they accepted in Brussels eleven years ago and last year in Brussels and Ohrid," Ivanov notes.

Political scientist Ognjen Gogic does not believe in the effectiveness of the "carrot and stick" mechanism in this specific case. In his view, it is apparent that the EU will continue to promote the Growth Plan despite not all reforms being implemented in the countries of the region, and regardless of someone breaking their promises, such as Kosovo's formation of the Association/Community of Serb-majority Municipalities.

"In October, it was said that a condition for Serbia and Kosovo to join the Growth Plan was to implement the Brussels-Ohrid Agreement, which meant that Serbia would de facto recognize Kosovo and Kosovo would form the CSM. Later, we had a summit in Skopje where this was no longer repeated, so it seems that the EU will not insist on any condition to the extent that it would jeopardize the realization of that Plan, and the process will continue regardless of someone breaking their promises, such as the formation of the CSM by Kosovo," Gogic tells Kosovo Online.

He believes that the Growth Plan initiative was not offered solely because of the needs of the countries in the region; rather, it reflects certain interests and priorities of the European Union, perhaps to consolidate this area in some way and to maintain influence in it in the context of global upheavals and divisions.

"So, the EU is accommodating and selective because it has its own interests in all of this. As for promises regarding the CSM, Kosovo has 'sold' it so many times. First, it was promised in 2013 in exchange for the integration of northern Kosovo, then in 2015 in exchange for a series of agreements, including telecommunications and dialing codes, in 2023 the promise was made again to form the CSM for Serbia to accept the Brussels-Ohrid Agreement, and now we have the CSM as a promise Kosovo gives in exchange for membership in the Council of Europe. So even if that condition is set for the Growth Plan, it will only be for Kosovo to promise to form the CSM once again, but it has no significance because no one realistically expects Kosovo to form the CSM to gain certain concessions," says Gogic.

He adds that it is very likely that the CSM will be 'sold' once again by Pristina, both for the Council of Europe and later for access to the Growth Plan, but no one will say that the CSM must be formed first before any benefits are received. Instead, it will be accepted as a promise that means nothing.

Regarding the Growth Plan, out of the six billion euros, two billion will be in the form of grants, and the remaining four billion in the form of loans with very favorable interest rates.

The European Commission has highlighted the goal of the Growth Plan for the Western Balkans to bring partners from this region closer to the EU by providing some of the benefits of EU membership to the region before accession, thus stimulating economic growth. The estimate is that the Growth Plan has the potential to double the size of the economies of the Western Balkans in the next ten years.