A UN envoy urged Serbia and Kosovo on Thursday to engage in "good faith" amid a currency crisis involving the two countries.
"I reaffirmed the importance of upholding the rule of law free from political influence and reiterated that all related actions must be anchored in the principles of human rights," the Special Representative and head of the UN Interim Administration Mission in Kosovo (UNMIK), Caroline Ziadeh, told a UN Security Council meeting.
"I will continue to call on both Pristina and Belgrade to engage actively, and in good faith, in the EU-facilitated Dialogue, the proper venue for tackling the most sensitive policy issues that affect the communities," Ziadeh added.
Serbia requested the Council meeting to discuss rising tensions in Kosovo following Pristina's decision to make the euro the only valid currency for conducting cash payment transactions.
"Recently, on 27 December 2023, the Central Bank Board of Kosovo adopted a regulation and announced that, as of 1 February 2024, the only currency allowed for cash transactions in Kosovo will be the euro," Ziadeh said.
"Limited public explanation was offered, despite the fact that, since 1999, the dinar has served as the de facto primary currency for cash and commercial transactions in Kosovo-Serb majority areas. Tens of thousands of individuals are affected, as is the economy, which depends upon their purchasing power."
The regulation interrupts payments to individuals employed by Serbian-funded institutions in Kosovo, certain agricultural and social welfare subsidies and recipients of Serbian and Yugoslav pensions, she said.
"Small and medium-scale businesses and health and education services, including childcare, will also be severely affected as they have for long also used to receive their funds from Serbia," she added.
On Feb. 1, Kosovo adopted the euro for cash payment transactions, despite concerns expressed by ethnic Serbians living in the country's north.
The Central Bank announced the decision on Jan. 18, saying currencies other than the euro can only be used in Kosovo for physical safekeeping or bank accounts.
Kosovo's decision sparked outrage because until now, ethnic Serbian communities in Kosovo have been using the dinar, the official currency of neighboring Serbia, at both state and commercial institutions. Many local Serbs have an attachment or even allegiance to Serbia.
Western countries including the US, France, Italy, Germany and the UK have urged Kosovo to halt implementation of the currency regulation.
Serbian President Aleksandar Vucic told the Council the dinar is legal tender in Serbia and cannot be banned in Kosovo.
"We emphasize once again that the decision to abolish the circulation of the dinar, i.e. the abolition of the dinar as a legal means of payment in the territory...is only one in a series of planned, well organized, long implemented and systematic measures of Pristina which attack the Serbian population above all," he said.
He added that Pristina aims to create "unbearable" living conditions and expel Serbs from the territory.
Vucic also called on the Council to take "urgent and decisive" measures with the aim of normalizing the situation in Kosovo and Metohija and creating conditions for the resumption of a meaningful dialogue between Belgrade and Pristina.
Kosovo Prime Minister Albin Kurti said the regulation does nothing to prohibit or prevent Serbia from providing financial support to Kosovo Serbs.
"The regulation seeks merely to ensure the transparency and legality of cash imported into Kosovo, in line with both our Constitution and European Union monetary policies," he said, adding the Central Bank of Kosovo is committed to ensuring that Kosovo Serbs are able to continue receiving financial support from Serbia "uninterrupted and unimpeded."
"Our government is fully committed to ensuring a smooth transition with sufficient time invested in education and information, instead of imposing penalties for non-compliance," he added.
