Gogic: In Kosovo, two de facto currencies; the EU tolerates the use of the euro outside of agreements

The intention of Pristina to abolish the dinar in Kosovo has raised the question of the basis on which Kosovo uses the euro as its currency, and political scientist Ognjen Gogic tells Kosovo Online that Kosovo and Montenegro are the only two areas where the euro is used as a de facto currency, outside of agreements with the European Central Bank.

"In Kosovo, two currencies are de facto used in parallel - the dinar and the euro - and there is no clear legal basis for either of them in terms of laws regulating this. The Constitution of Kosovo states that there will be one currency in Kosovo, but it does not specify which one, and the law regarding the Central Bank of Kosovo states that the currency will be determined by law, but that law has never been enacted," Gogic says.

He also says that the situation regarding the use of currencies in Kosovo was most succinctly explained by the head of UNMIK, Caroline Ziadeh, during her address to the UN Security Council, stating that there were two de facto currencies and that this situation had persisted for the past 25 years.

Gogic points out that Kosovo is in a specific situation regarding the use of the euro because only EU members can use the euro after meeting convergence criteria and becoming a part of the eurozone.

"Even not all EU members can use the euro if they do not meet all the criteria. They are obliged to switch to the euro once they meet them. The best example is Croatia, which entered the eurozone nine years after becoming an EU member. In some earlier situations, countries on the path to the EU - Croatia, Bulgaria, or Bosnia and Herzegovina, also considered unilaterally adopting the euro as their currency, but the EU threatened them with sanctions or hinted at suspending the European integration process if they introduced the euro before being ready to do so. This did not happen in the case of Kosovo and Montenegro, which unilaterally use the euro, and the EU tolerates the use of the euro here. It is not about a large amount of money that could disrupt monetary stability in the eurozone, but it is primarily about political reasons related to the dissolution process of the state union of Serbia and Montenegro and later with the unilateral declaration of independence of Kosovo," Gogic explains.

However, he says that in relations between the EU and Kosovo, sooner or later, the issue of the euro will become a problem if Kosovo continues to move towards EU membership because it will find itself in a situation where it began using the euro before it was ready for it.

"That is indeed a question that everyone avoids and turns a blind eye to, but the problem arises because the euro, unilaterally introduced in Kosovo, is now being used as a means to oppress a minority and exert pressure on a non-majority community in Kosovo that uses dinars. This has now become a question for the European Central Bank and the EU - how is it even possible for their currency to be used for such purposes? Also, if there was no reason before to question whether Kosovo could use the euro, now is the time, because it is being used as a means to violate human rights. So, the question now is actually about dialogue in Brussels not between Belgrade and Pristina on how to technically resolve the issue of payment transactions, but between Brussels and Pristina on whether the euro can be used as a means to pressure an ethnic community," Gogic says.

He says that the CBK Regulation abolishing the use of dinar is not based on law because the CBK cannot determine by its regulation which currency is used in Kosovo; only the parliament can do so through legislation, as both Serbian and Albanian legal experts in Kosovo have already pointed out.

"Kosovo has opted for this 'trick' where the supposedly independent CBK makes such a decision, and it is said that the authorities are not responsible for it because they cannot influence the work of an independent institution. This was a shortcut because if Kosovo wanted to establish a single currency, namely the euro, the right way would be through legislation, but that would take much longer and raise many other questions. So, here we see hypocrisy because it appeals to the rule of law and says that the executive branch cannot influence the work of the CBK, but on the other hand, we have the CBK making decisions outside the law, and even the police taking measures based on a CBK decision that is not legal. This is selective invocation of the rule of law," Gogic says.