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Think tank: EU sanctions have cost Kosovo 600 million euros in unpaid funds

According to a GAP Institute report, Kosovo has been denied more than 600 millions of euros in external funding for environmental protection projects and energy projects, among others, ever since the European Union implemented sanctions in 2023.

Kosovo's Government disputes the amount, but a report by a local organization gives one of first independent assessments on the impact of sanctions on one of Europe’s poorest country for its role in inflaming ethnic tensions in the north of its Serb majority.

The GAP Institute reported that "the measures... have had significant financial and development consequences, costing Kosovo approximately 613.4 millions euros in projects suspended or indefinitely deferred."

The funds affected are related to various financial instruments which have contributed to Kosovo's growth since its independence from Serbia.

According to the report, environment and energy are the most affected sectors, with more than 460 millions of euros stalled. This is a major blow to a country which desperately needs to reduce the reliance it has on coal-fired energy generation.

In the first half of this year, at least 150 millions euros were identified as funds that had been stalled. The EU hasn't publicly stated how much money is being delayed.

The Kosovo government disputes these figures. A spokesperson said that aside from the 7.1 million euro it claims to have lost due expiration of contracts, these funds are "neither lost nor at risk", because they will be resumed when sanctions are lifted.

Kaja Kallas, the EU's chief of foreign policy, said that the bloc will begin lifting sanctions "gradually", on condition that tensions between Kosovo and the north are de-escalated.

Senior diplomats told reporters that EU funded projects would receive technical assistance in the coming weeks, but there is no plan at this time to distribute funds.

Some EU members do not recognise Kosovo as a country, making lifting sanctions difficult.

The diplomat stated that "the gradual lifting is not very substantial" and that it was unlikely the EU could move forward in funding.

Kosovo is aspiring to be a member of the EU. Albin Kurti, the Prime Minister, has played a role in stifling the process by raising tensions and closing Serb institutions in the north, as well as by banning the Serbian dinar inside its borders and by stifling trade. Reporting by Edward McAllister, Fatos Bytyci and Sophie Walker

(source: Reuters)