Todorovic: There is a high risk that Kosovo could lose certain funds from the EU Growth Plan

Marko Todorovic, a researcher at the Center for European Policies in Belgrade, says that Kosovo is significantly behind in implementing reforms and drawing funds from the Growth Plan for the Western Balkans, and that after receiving pre-financing funds, there is a high risk it could lose money intended for reform steps that were supposed to be implemented by June 2025.

After the Assembly of Kosovo ratified the agreements with the European Commission, Todorovic explains, Kosovo currently meets the conditions only for pre-financing, although even for that several additional procedural steps are required concerning the establishment of an institutional structure for implementing the reform agenda, namely appointing a national coordinator for the process and a supervisory board for implementation.

“Once all that is completed, which should happen very quickly because these are procedural matters, Kosovo can receive seven percent of the total amount available to it, which is 882 million in total. Those seven percent amount to 62 million, and that is what Kosovo will certainly receive. Everything afterward is linked to specific reforms stemming from the reform agenda, and we are talking about millions of euros that could be lost in the coming period,” Todorovic told Kosovo Online.

As he explains, Kosovo must now implement reform steps not only from this semester, but also those whose deadlines were December 2024, then June 2025, and December 2025. The most problematic, he assesses, are the reform steps whose deadline was June 2025.

“Kosovo currently needs to work on reforms from four semesters, which is of course an extremely difficult task, and there is a high risk of losing funds. For each semester there is a certain grace period during which a country may delay implementation but still eventually withdraw the funds. For reform steps with a December 2024 deadline, the grace period is two years, so Kosovo can implement them by the end of this year. However, for all later reform steps the grace period lasts one year, which means that reform steps from June 2025 have a grace period until the end of June this year. Therefore, it is only a matter of a few months, and it is quite likely that certain funds will be lost,” he points out.

If Kosovo implements the planned reforms after the grace period, he adds, the planned funds should not be disbursed, which should apply as a rule to all in the Western Balkans if they find themselves in such a situation, and the “missed” funds should then be redistributed to neighboring countries.

“Then the neighbors receive a larger sum of money available for their reform steps that are being implemented. That is essentially the logic of the entire Growth Plan for the Western Balkans. We have not yet faced a situation in which any actor in the Western Balkans has exceeded that grace period, and we will see whether the European Commission, when that happens, will try to find a way to make the payment, or perhaps grant an additional period. However, that would require amendments to the signed agreements on one hand, and I would say it would actually mean changing the entire logic of the Growth Plan, which is meant to link reforms with funding, and I would assess that as something negative because funds should not be disbursed at any cost if reforms have not been implemented,” Todorovic emphasizes.

He recalls that, in the case of Kosovo, a specific prerequisite for drawing funds is the normalization of relations with Belgrade, just as normalization with Pristina is a condition for Belgrade.

“It is important that this financial incentive be significant also for issues concerning normalization and minority rights in Kosovo in general. It is very possible that concrete demands will be made of Pristina regarding normalization of relations. I would not go into details about what the European Commission will request, but it definitely will not remain only on paper,” our interlocutor believes.

When Serbia received funds from the first tranche, he notes, it was also assessed whether Serbia had been a constructive partner in normalization, which has at this point been confirmed, but it will again be assessed for each subsequent tranche.